Address Delays in Processes
In recent articles, I have discussed improving our sales processes. In my last article, I moved my focus to a non-sales area, addressing those points where we allow profit to leak out of our business.
“Delays in our systems and processes compromise our business. They affect our cash flow, our reputation, and our profitability.”
This article will look at four areas where delays in our systems and processes compromise our business: delays that affect our cash flow, our reputation, and our profitability
Prompt Installation. It’s not unusual for a customer to call us to ask when their flooring will be installed. It should be the other way around; our salespeople should know when product has been delivered so they can promptly book the installation. The longer the product sits in our warehouse, the longer it takes to invoice the project and turn it into cash in the bank. The more product we have sitting in the warehouse waiting on installation, the more our cash flow is harmed.
Invoicing. Similarly, how quickly are we getting our invoices out? Are we waiting to get invoices from suppliers and installers? If so, invoicing might be delayed for days. Our process should be that the invoice is sent on confirmation that the job has been completed. Again, delays in the invoicing process impact our cash flow.
Slow payers. How stringently do we enforce our terms of trade? Friendly phone calls to our slow payers will get the money into our bank account faster than waiting for them to pay us. Some of us are reluctant to make calls on debtors, but they can be made easier if we preface the first call by asking them if they are happy with their new flooring. I know some clients call all their clients to ask if they are happy and then to let them know the invoice is on the way.
“How quickly are we addressing faults with the installation? ”
Installation issues. Finally, how quickly are we addressing faults with the installation? I know from experience that if we don’t have a process for rapidly remediating these issues, they can grow to a daunting number, with a corresponding amount of ageing debtors. This has a further detrimental effect on our cash flow and, for customers with genuine complaints, a knock-on effect on our reputation.
It's worth talking about jobs that require remedial action. In my experience, many of the issues in our business resulted from misaligned expectations. Our salespeople can prevent these by talking to clients about seam placement and watermarking. What are the common complaints in your business, and how can you cut them off before installation?
“If we don’t drive problem resolution ourselves, it can drag on for months, and we will be left with ageing debt. ”
Then, there are product faults, poor installation, and property damage. These are time-consuming and, inevitably, costly. In my experience, again, the resolution of these has to be driven by the retailer because clients are often happy to live with the problem so long as they haven’t paid, and suppliers have their own processes for inspecting product problems and arriving at a resolution. If we don’t drive it ourselves, it can drag on for months, and we will be left with ageing debt. I also know that the longer a problem is unresolved, the less willing the client will be to pay the full amount owed.
There is often some minor damage when installing flooring. Again, our salespeople can help us by reminding clients that some touch-up painting might be required upon completion of the installation. Then, there is accidental damage that goes beyond what we would expect. Our installers know when they cause damage; they need to let us know so we can go on the front foot with the client. We need to fix the damage and, behind the scenes, work out an arrangement fair to the installer.
Finally, there is pre-existing damage. In these days of mobile phones, none of us have an excuse for not taking pictures of pre-existing damage, either when we are on site for the measure or when the installers first arrive. If we haven’t taken photos, we will likely get stuck with the cost of repairing damage we didn’t cause. When we are on the end of a losing argument, don’t drag out the pain; learn from it, move on, and take steps to prevent it in the future.
“The key to minimising delays is a good business management system.”
The key to minimising delays is a good business management system. RFMS is the solution for flooring people designed by flooring people and provides a single integrated solution for all aspects of your flooring business, including those mentioned in this article. If you are curious how RFMS might improve your business, we would be happy to show you in a no-obligation online meeting.
Chris Ogden is a consultant and Managing Director of RFMS Australasia (RFMSanz.com), a supplier of IT solutions for the flooring industry. Chris has an extensive background in all aspects of the flooring industry, and he can be contacted at cogden@rfmsanz.com.