It is no surprise small-business owners adopt different styles when it comes to the task of collecting an account receivable. They have one persona when addressing their customer (‘collaborative’, perhaps), and another persona for the accounts payable department.
Each of us grows up attaching a different value to money. Our ideas take shape at an early age, and we carry these views through into the businesses we start.
Start-ups are not generally founded by individuals with finance backgrounds. Unless the start-up has a finance focus, the individuals are more likely to be from a sales, marketing or technology background. That means a founder’s skills and interests do not lie in the areas of accounting and finance.
Whatever their business background, however, almost every one of them must eventually deal with the task of collecting accounts.
Let’s explore seven personality types at work when it comes to seeking payment. Accounts payable departments, be on your guard!
The recluseAs soon as the subject of finance is raised, the recluse fades from the scene ? either struck down by an ailment or called to attend the bedside of a sick or dying relative.
The recluse dreads opening emails from the accounts payable department, preferring to ponder for hours on what the content may be, even when the chances are it will be nothing more than a simple request to amend an inaccurate invoice. This individual postpones financial decisions to the last possible moment and is often the recipient of court summons from tax authorities.
Quote: ‘This conversation is now over.’
The overlordThe overlord makes a business out of collecting debts, swiftly deploying any action that will impress peers and colleagues. This person sparks the fight and watches from a safe distance as the minions wage battle.
The overlord is amused by those who are slow to pay. At the press of a button, the overlord wields influence beyond the four walls of the accounts payable department.
Quote: ‘Release the hounds.’
The complicatorThe complicator structures deals so convoluted that no party can understand when payment is due. Invoices are attached to incorrect correspondence and sent at inappropriate times ? maybe even at midnight on a Saturday.
The accounts department, genuinely keen to pay this supplier, is baffled. A forensics team works through the night, unravelling and dissecting piles of paperwork, and cobbling together what resembles an invoice.
Feeling smugly satisfied, the complicator continues to drive accounts payable departments around the bend by refusing to change poor business practices.
Quote: ‘There’s just one question remaining.’
The blufferThe bluffer deals with late payments by promising court action. Threatening to stop work on the client’s current projects or to tear down already completed ones, the bluffer draws an alarming picture of the consequences, if demands are not met within 24 hours.
The bluffer’s shouts and screams amount to little. Without the means for taking action, the bluffer switches to damage-control mode and begins mending relations in order to get paid.
The bluffer aspires to be an overlord but, alas, lacks the necessary experience and finesse.
Quote: ‘Without prejudice.’
The struggling artistHaving painted a sixteenth chapel ceiling for their client, the struggling artist views the act of invoicing and collecting payment as unworthy. The struggling artist might be up a year late issuing invoices, but nevertheless feels insulted when the accounts payable department cannot locate the corresponding purchase order.
The accounts payable department is called on to remind the struggling artist that the end of the financial year is approaching and to invoice if payment seems like a good idea. Even when insolvency looms and the liquidators are carting away the furniture and computer, the struggling artist will continue to work for the greater good.
Quote: ‘Can’t you people see I’m busy?’
The Pontius PilateThis individual believes collection takes place by divine intervention. This business owner washes their hands of overdue debts and moves onto subjects of higher academic distinction. Debt collection is left to staff, who, frightened that their salary will not be paid, begrudgingly accept responsibility for this unsavoury problem.
Quote: ‘It’s in God’s hands now.’
The terminatorBy whatever means necessary, the terminator collects not only the original amount shown on the invoice, but also penalty fees, court fees and any other fees hidden in the terms and conditions. This player loves a late payer. Invoice due dates are judiciously marked in the terminator’s diary and demand letters issued promptly thereafter.
Quote: ‘I need your keys, your boots and the invoice paid.’
Perhaps there is a little bit of these people in each of us or maybe you’d like a little more of one than the other.
About the authorAnthony Coundouris brings his passion for financial technology and branding to his position as a trade finance evangelist for ApexPeak. A speaker and writer on the subject of business finance for five years, he was co-founder and director of Futurebooks, a firm providing financial services to technology startups across the Asia-Pacific region. With more than two decades of online experience, he consults for businesses on how to create digital supply chain finance and invoice discounting workflows, and how to monetise e-invoice platforms. Anthony is a startup mentor for the Founders Institution, Singapore, IdeasInc.sg and Startup Weekend. He has been invited to guest speak for various accelerators and chambers of commerce across the Asia-Pacific. He is an active blogger on design theory and was the founder of digital marketing agency Firestarter, acquired in 2010.
Company descriptionApexPeak eases cash-flow problems faced by SMEs and MNCs by buying e-invoices before they fall due. Founded in 2012, the firm provides in excess of USD 1.3 billion trade finance to businesses located in 25 countries worldwide. Visit www.ApexPeak.com to find out more.
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