In my practice, I mostly hire newly degreed accountants in order to avoid hiring the bad habits they might have learned at the last accounting job. While this strategy has worked for me, I’ve learned that there are two things every newly graduated accountant (or any professional) needs to learn – (1) How to act & (2) What is important. Upon reflection, as I look at the world around me, I’ve come to realize that dictum of knowing what is important effectively rules everything.
In the information age, we are drowned with information. Most of it has little or no value. Thus, the Wal-Mart employee votes for politicians against the “death tax,” although at their place on the economic ladder, such an issue has absolutely no relevance. News is no longer news, but instead it comes to us as a blather of meaningless gossip, titillating stories, etc. The television and the mobile phone deliver it 24/7. Thus, a ridiculous percentage of our population sits transfixed on the meaningless, wasting their time on unproductive “entertainment.” They simply don’t know what is important.
In the competitive world of business, the chaff is separated from the wheat with more efficiency. Thus, the entrepreneur (or employee) who can’t put the mobile phone down, stop surfing the web or resist playing games, quickly blurs into irrelevance.
For an entrepreneur to have “half a chance” of success, the productive use of his/her time requires that these issues of self-discipline be settled long before the concept of starting a business ever became a reality. Nonetheless, with his/her seat firmly in the saddle, he/she is confronted with a whole new set of choices (some obvious, some not so obvious), which could ultimately put him/her out of business.
All of us have our experience and belief set that we’ve developed through our formative years. Thus, as we set out to “do it our own way,” we embrace all of the risks that go with defying conventional wisdom. Granted, conventional wisdom isn’t always right, but who has all of the answers? Nonetheless, success or failure doesn’t hinge on every decision we make. Or does it?
In my 21 years in business, I’ve developed my own set of unique practices: I don’t keep secrets from my employees; When I negotiate a salary with a new hire, it usually ends with “I’m sorry, but the lowest salary I can pay you is more than that;” equal pay for equal work; I don’t make collection calls; I don’t do background checks; I don’t do drug tests; I comply with all labor labors; I don’t chisel my employees. I treat everyone (especially my employees) with respect. Perhaps not the golden rule and not totally “off the wall,” but a step apart from most of the employers I’ve worked for.
My favorite “unique” practice is the one about collection calls. No, I don’t make someone else do them. I simply don’t talk about unpaid bills with my clients. It seems I’ve somehow positioned myself so that the basic understanding that if the client doesn’t pay me, I simply don’t do additional work for them seems to be enough. This isn’t to say I don’t get “stiffed” by clients, but that’s simply a “cost” of doing business – dare I say an acceptable cost.
For most, payment for services is probably the most sensitive (If not emotional) issue. If the services provided are not paid for, the very existence my business is threatened. My very livelihood and the financial security of my family are at stake. Yes, I take such things very seriously.
The issue of “being taken advantage of,” though a painful element of principle, or the “feeling stupid” that goes with it energize us to “do something about it.” I confess I spent the better part of two years aggressively working to collect a heavy bill. When my efforts (and additional monetary expense) had clearly failed, I felt as if I had lost a family member. But I still had (what was left of) a business to run. In hindsight, the whole activity was a huge waste of productive time and energy – except for the lessons learned.
Ultimately it’s about the long term – and a few basic facts: A successful business is not built on clients who don’t pay their bills. It’s built on clients who do. Thus, the approach is straightforward enough. From the ashes of my collection action, I followed a process of letting my clients qualify themselves as worthy to be serviced by the practice. Thus, from that point, my practice was built around clients who paid their bills. The “unqualified” brought down other providers.
I like to think my practice is successful through the success of my clients. In that frame, clients who don’t pay their bills don’t succeed in business. Therefore, I simply chase the clients who want to pay me. The people who don’t want to pay me are not the “A” or the “B” clients. They’re the ones I never wanted. When I provide services to them, the opportunity cost is work I could be doing for the clients I want to work for.
Aside from the theoretical conceptual analysis, how has this worked for me? Between 1993 and 1997, culminating with my unsuccessful (if not unproductive) collection “action,” 37.38% of my fees went uncollected. Since then (1998-2012), my uncollected accounts have been 1.68%. Thus, I think I’m on to something.
I therefore have a new adage…”Don’t let the hole in your pocket turn into a hole in your head!12625 Frederick Street
Suite I5-300Moreno Valley CA 92553