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  #41  
Old 08-13-2013, 07:14 PM
GOATMAN GEORGE GOATMAN GEORGE is offline
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Join Date: Jun 2013
Location: North Carolina
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I was having serious cash flow problems at certain prime growth situations in my business. I was struggling because certain customers constantly did and still don't pay on time. This is a fight you will never win. Especially if your business consists of mainly medium income residential maintenance.

To avoid this problem I just decided I needed to have 1.5 month's business expenses set aside when I wanted to add an additional employee. As the owner I can wait on some checks, my employees living paycheck to paycheck cannot. Having this cash on the side that I always reimburse solved my cash flow issues immediately.
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  #42  
Old 08-13-2013, 07:17 PM
newguy123 newguy123 is online now
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Quote:
Originally Posted by Mark Oomkes View Post
Wasting monitor ink.

I'm done until something intelligent comes along.
LOL...okay sir. Have a great evening.
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  #43  
Old 08-13-2013, 08:00 PM
seabee24 seabee24 is offline
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Quote:
Originally Posted by newguy123 View Post
Trying to get 500 customers to pay on time, every time is a lot more difficult than 5 customers; that speaks a lot to cash flow.

I have more answers if you want Mark.

I would disagree with that statement. Change you billing terms and getting 500 auto charged to a credit card is easy. Odds are the "5" large accounts are commercial, or town homes and you would jump though their hoops. One of the board members is out of town, or they have to have a meeting. I have heard a whole list. Besides. you could collect 4 of 5 and you still would have 20% out on the books.
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  #44  
Old 08-13-2013, 08:24 PM
newguy123 newguy123 is online now
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Quote:
Originally Posted by seabee24 View Post
I would disagree with that statement. Change you billing terms and getting 500 auto charged to a credit card is easy. Odds are the "5" large accounts are commercial, or town homes and you would jump though their hoops. One of the board members is out of town, or they have to have a meeting. I have heard a whole list. Besides. you could collect 4 of 5 and you still would have 20% out on the books.
Okay...but sheer numbers would prove 500 is harder than 5. And your example of using a credit card would solve the "cash flow" problem. But try and get commercial on credit card...not sure but I would think most commercial would cut checks. My commercials pay on time...like clock work. So...your experience must be different than mine.
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  #45  
Old 08-13-2013, 10:10 PM
seabee24 seabee24 is offline
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Quote:
Originally Posted by newguy123 View Post
Okay...but sheer numbers would prove 500 is harder than 5. And your example of using a credit card would solve the "cash flow" problem. But try and get commercial on credit card...not sure but I would think most commercial would cut checks. My commercials pay on time...like clock work. So...your experience must be different than mine.
Mine is not much different. This was a hypothetical situation. In my experience anyone with 500 commercial accounts probably doesn't have a cash flow issue. 80% of my commercial accounts pay on time. 20% are slightly late. It changed every month and I've heard every reason. The ones that do pay "on time" use every bit of net 30 to pay or greater. Sometimes we sign their contract and its net 45 or 60. They do pay "on-time". 59 days after they got the invoice which was 1-4 weeks after I did the work.

Speaking in terms of residential, getting 500 customers to agree to an auto payment where you would be paid with in 5-7 days after completing your service--- that's easy

What I will agree with you on.

Tracking 5 is easier than 500
Invoicing, printing,folding, stamping, mailing 5 is much quicker and easier than 500
Inputting 5 payments in QB is easier than 500

But none of those really have anything to do with cash flow other than the cost of stamps and the half day it takes to produce those invoices.
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  #46  
Old 08-13-2013, 10:20 PM
Southern Heritage Southern Heritage is offline
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I'd take 5 large company's over500 all day
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  #47  
Old 08-13-2013, 10:57 PM
seabee24 seabee24 is offline
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I wouldn't take either. I'd rather have a combination of the two, as to not place all my eggs in one basket. Each has an advantage and a dis-advantage. If you know those and how to take advantage I those an avoid the dis advantages you can build a pretty reliable income
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  #48  
Old 08-14-2013, 07:19 AM
Mark Oomkes Mark Oomkes is online now
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Some popcorn sure would be nice about now.
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  #49  
Old 08-14-2013, 08:05 AM
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grassmonkey0311 grassmonkey0311 is offline
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Quote:
Originally Posted by Southern Heritage View Post
I'd take 5 large company's over500 all day
No way. If one of those 5 dumps you, thats a huge dent in your pocket. 500 is more of a headache, but more of a steady income.
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  #50  
Old 08-14-2013, 08:56 AM
Mark Oomkes Mark Oomkes is online now
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Originally Posted by grassmonkey0311 View Post
No way. If one of those 5 dumps you, thats a huge dent in your pocket. 500 is more of a headache, but more of a steady income.
Now this ^^^^^^ is a very intelligent post.

Not your fault as newguy totally missed the point, but you are absolutely correct and this thread is now off topic. Sort of.

Lose 20% of your business in one customer getting rid of you and you will have cash flow issues. So I guess we are back on track now............sort of.

seabee continues to give great advice, but until the OP answers some questions, this thread is going nowhere.
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