How to Ask for Money Nicely

by Mark Latour
Vollmer Public Relations Houston

The scene is a workhouse in 19th century Britain. The camera focuses in on a group of poor, hungry boys drawing lots. Oliver is the loser. He picks up his bowl, anxiously approaches Mr. Bumble, the parish beadle, and says: “Please sir, I want some more.”

Some people have no trouble asking for what is rightfully theirs, and others are timid to the point of their own detriment. You might believe that talking to your clients about money will cause a mild case of angina, but my goal is to help you overcome your fears so you can ask for what is rightfully yours.

In this article, we are going to discuss how to ask for money nicely.

You come to work every day to earn a paycheck, and you work hard for that money. If your employer failed to issue your paycheck, you probably wouldn’t have any trouble saying: “Excuse me, but I think you forgot something.” Asking your clients to pay their past-due invoices is exactly the same.

Fortunately, I work for a great company that provides an extraordinarily high-quality product to its clients. When an invoice isn’t paid on time, I don’t have any hesitation in asking that our company be paid for its efforts. I’m sure you feel the same way. If you are the person at your firm who has that personal relationship with the client, then it may be your job to help make sure your firm’s invoices are paid in a timely manner.

Because most of our clients enjoy excellent reputations and have the highest level of integrity, the people I generally talk to are respectful and professional. They want to honor their contracts, and I try to make these conversations as painless as possible. In most situations, it can be distilled down to a few quick questions:

1. “Have you received our invoice for the month of (fill in the blank)?” It seems so simple, but clients cannot pay invoices they have never received. In my experience, most past-due accounts are the result of an invoice that went missing, so don’t be afraid to ask. After all, some invoices really do get lost in the mail, some wind up on the wrong person’s desk, and a few get buried under a stack of other things in a person’s inbox. If your clients don’t have a copy of the invoice, fax or email them another copy. Then call back and confirm they have received it.

2. “Do you have any questions or concerns regarding your invoice?” Maybe your client needs more information in order to feel comfortable approving the payment. Now is the time to uncover any obstacle. Address their concerns immediately and get their agreement that they will approve your invoice for payment. (Remember that only “approvals” equal payments.)

3. “Will you do me a favor?” Because your client contact is your friend on the inside, he or she may be in a position to help expedite a past-due invoice. Don’t hesitate to ask. Let your contact know that the folks in your finance department are pressuring you because the invoice is more than 30 days old. Explain that you’d like to tell them when the payment should arrive, and you need your contact’s help in getting an answer. It’s a reasonable question – the same sort of question you’d ask if your paycheck were unexpectedly late.

This three-step process is quick, non-confrontational and professional. The questions are very specific, and they generally achieve excellent results. When it is time to ask for money on behalf of your company, don’t hesitate to say: “More, please.”

In Control - You or Your Business?

by Duane Geyer, VOLLMER CFO

Do you control your business or does it control you?

Wall Street is down since the election. Unemployment is the highest it has been in ten years and rising. Japan has declared it is in a recession as has the United States. The Consumer Price Index and home values are dropping. Credit markets are tight. Everybody is asking the government for a bailout. Given all these conditions, how do a business owners/managers best control their operations? Prepare and work against a budget.

Begin with revenues – what you expect to come in. Be careful not to be too optimistic (you’ll see why in a minute). Start with what you know - existing clients who will continue with you in 2009. From there add potential new business (but again, don’t be too optimistic). Finally, add in a small portion of business which will come from “who knows where.” Add it all up and compare it to previous years for reasonableness. If it is more or less, how do you justify the change?

Next, plan the cost of running your operation. Spend a lot of time on employee costs (salaries, taxes and benefits); this is usually the urgent expense item. For other expense items, consider what you have done in the past and add in any changes you would like to make, such as new marketing initiatives.

Profit is revenue minus expenses. Calculate a Profit percentage (profit divided by revenue) and compare it to previous years and metrics published for your industry. This will tell you if revenues and/or expenses are out of line. Go back and adjust accordingly. Be careful not to spend all your expected revenue. If you plan revenues too optimistically, you may be tempted to pump up your expenses since you can still show a good profit. This could get you into trouble if you start spending too aggressively in the new year and the revenues you projected do not materialize.

Budget cash flow! Why? Because cash is king – no matter what the economy is doing, positive cash flow will keep your head above water. How? The simple answer is profits plus depreciation minus capital expenditure (computers or other equipment) minus loan payments. Too many small businesses only budget their profit and loss, only to wind up with not enough cash to pay their bills.

Budgets can be a lot of work, but they can also be an invaluable tool – especially in uncertain economic times. They are not an end all and be all; they are a guide. Comparing your actual results against your budget will keep you on track by revealing if your plans are realistic, or need to be modified. After all, it’s better to find out sooner than later what is happening to your business – it keeps you in control!

Trick, Treat or Transparency – No Financial Tricks This 4th Quarter

by Darren Horwitz, VOLLMER Dallas

Kids, put your costumes on and rush out to get your candy now; it is going to be a long, lean fourth quarter void of tricks and treats.

In the past few weeks we have seen our financial markets crumble as companies like Fannie Mae, Freddie Mac, Lehman Brothers and Merrill Lynch became prey to their own financial hocus pocus. Having purchased investments backed by suspect loans, these institutions lacked the cash to withstand the drop in mortgage investments when the housing market began its downward spiral.

To make matters worse, in just one week, the global markets saw stock losses of $3 trillion and the SEC placed a temporary ban on short selling. Hedge funds and investors have been spooked as government watchdogs are on high alert.
Economists believe that the housing and credit crisis could continue for at least two more years, and the government is struggling to keep our economy from falling into the abyss.

This is no trick.

Dracula has taken a big bite out of Wall Street and threatens to bite even deeper.

Now if that isn’t enough to scare you as we approach Halloween, nothing will.

Here is the quick take. Now is not a time for financial trickery and hocus pocus.

• Financial trickery leads to mistrust
• Mistrust leads to unrest
• Unrest leads to a loss in confidence
• A loss in confidence leads to…

While most organizations will take a wait and see approach, lock their doors, break out the holy water and pray that evil passes them by, thoughtful organizations will take a different path.

As retail and institutional shareholders, employees and clients now live with the specter of lies and mistrust in the financial markets, organizations that communicate consistently and effectively will survive the scare.

Companies that practice true transparency using vehicles to provide investors with greater access and availability to information have a unique opportunity to strengthen shareholder loyalty, when loyalty is hard to come by.

Here are a few things you can do keep your investors happy while you survive the scare.

• Create a perception survey to determine what your biggest institutional investors are thinking. You will be surprised what concerns may exist about your business and your ability to grow.
• Develop metrics and proof points to ensure your company’s strategy and performance are highly visible and accessible to investors.
• Take a proactive approach as we move from GAAP to international financial reporting standards (IFRS). IFRS promises to be the largest change in reporting since Sarbanes Oxley. Asking questions and preparing for these new standards will demonstrate an openness to these new requirements that will support customers, employees and shareholders.