May 10, 2014 • By Dennis Beaver
Last time we told you about Dr. Tom, a busy dentist in Central California with “a monumental collections tooth ache, well on the way to needing a root canal,” in the opinion of one of our nations foremost business consultants, Gary Goldstick, based in Oregon’s beautiful Lake Oswego.
“One of the greatest threats to any enterprise or profession is failing to devote the same amount of attention-if not more—to getting paid as making more sales, or attracting new clients,” he observes.
A friend of this column, his comments came as a result of the email Dr. Tom’s gutsy receptionist, 22-year-old Traci, sent us, describing an employer who is dramatically incompetent when it comes to, “having the right person in one of the most important roles in any business, billing and collections,” Goldstick finds.
“It does not matter what business you are in. If money isn’t coming in when it should, the very existence of your company-and the jobs of all who work there-will be at risk. I can’t overstate how often a major contributing factor leading to business failure is having the wrong person in that crucial position.
“Cash flow is one of the first things a business consultant looks at; is there enough to keep the doors open, bills paid, the employees paid often we find the person in charge lacks the personality needed to deal with the challenges of getting customers to pay their bills.
“But, Dennis, you would be amazed at how that relatively obvious fact of financial life is completely ignored, from mom and pop small business owners all the way to some of America’s largest corporations, law firms and health care professionals.”
Hand holders and family friends need not apply
“When hiring for the ‘cash management’ position first consider who you don’t want to have in that position — and that’s a person with too much empathy — who cares too much. On a 0 -10 empathy scale, you want someone with not more than .5.
“In this job, you do not want a hand holder — someone who is so warm and has so much empathy that they make excuses for and emotionally identify with the person who is not paying their bills, believing their always sad stories.
“But, you don’t want a screaming, sociopathic monster, either,” Goldstick was quick to add.
Family friends – Best advice, don’t hire them
“When you’ve hired family friends for key positions in your company, if things go wrong and they can’t do the job, it is never easy to end the employment relationship.
“It’s an invitation for conflict with your own family; and the delay which often occurs before that plug is pulled causes further damage to the company.
“So, the safest bet is to retain your sanity and the friendship by not hiring a friend or relative in the first place.”
Look for these qualities
Goldstick feels that the right person in this critical job needs to have these personality qualities:
• Has good social skills as they are on the phone all the time and can send this message: “I’m here to help you. If it wasn’t for me, you would have been sued by this time.”
• Is highly motivated to prevent delinquent accounts turn to garbage. Sincerely cares about the welfare of the company. When hearing a problem from the customer, they can separate a legitimate reason that a payment is late from a meaningless excuse.
• Is able to obtain the debtor’s cooperation. For example, “I can understand why that would be a problem. How long will it take you to fix this so that you can start paying us?”
• Is mature, having years of life experience, such as married women 50 years with kids. Why? Middle-aged women tend to do very well in this job as they are natural helpers and often can see through a con job.
• Is soft spoken but firm, never insulting, never critical and always carries the flag of the company.
• Can be frank and is capable of confronting the customer when she detects they are playing her for a sucker.
• Has self-confidence. Is able to get the boss’s attention especially when the past due account is a “friend of the owners” and the tap needs to be turned off.
Goldstick summed up his “prescription” for business owners with this key observation:
“Asking for money is a fundamental skill to anyone who is working in accounts receivable, just like being to do the job of a plumber or auto mechanic. If there is someone who has that responsibility and cannot do the job-either lacks the skills, personality or motivation, replace them!
Gary Goldstick’s website is www.ghgoldstick.com
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.