Small-business owners often struggle with accounts receivable because they're great at selling but hate collecting. Krista Walsh explains that the fix is simple: assign one person to handle collections, or outsource it entirely. Role separation and clear policies prevent AR from falling through the cracks.
Are the challenges with accounts receivable a process problem that people aren't asking for their money, or is it a systems issue that we haven't made it a driving policy, so now it's getting neglected? What is it? What's the source here?
First of all, when you're dealing with small businesses, it's usually, as you mentioned earlier, a small business person that has a really great trade or idea, and they're the salesperson. So it's really hard to go From being like the head person, the salesperson trying to get the business, and then like switch it to be the collection agent or the accounts receivable and ask for the money. Because it's like split personality, if you will, and it's hard to transition one from the other. And I often tell small businesses, husband and wife, you designate one of you to do each. My dad is extremely, really good at his trade, and he is the nicest man, but when it comes to collections, he I simply won't do it. He never has. It's my job, obviously. But we have that. We know what our roles are within the small business. And instead of everyone wearing many, many hats like entrepreneurs do— and if you don't have that resource, outsource it.
