This week’s question from our portal “Ask Us Anything” comes from John:
I’ve heard you talk about going after accounts receivable. We’re considering hiring a collections company to go after anyone who owes us money—we have an 87% collections rate we want to raise. And separately, we just made a mistake and I’m returning $3,000 to someone rather than fighting it, on the thinking that the abundance will come back. Am I correct? And why do you recommend not following up on AR?
That’s the way my mentor taught me. Number one, it’s cheaper and it’s less energy to go after a new client than to struggle, fight, and chase one for money. I did that for years and never really had a problem—if somebody wasn’t happy, just give them the money.
Then I met somebody who kept drilling in my head that I should get a collections company and go after people. So I tried it. It was a disaster. It created negative energy in the company. So we sat down and looked at how to be more responsible—and the idea came up that the second they stop paying, the coaching stops. That way we don’t get into a situation where they owe us a ton of money.
It really comes down to the personal responsibility you’re willing to accept for the quality of the client you’re going after. And the energy is so much cleaner. It feels so much better than chasing people who don’t have it. There will always be somebody trying to con you—but again, that comes down to the quality of the client.
You can mathematically adjust that data so it’s worth it. But you’re not able to draw a line with the energy. Somebody’s got to chase that, there’s going to be bad feelings directed toward you and toward them. I don’t want any of that in my business. I just want clean energy coming in. If you tested both side by side, I’ll bet the energy side wins.
There’s also something to be said for the energy of debt forgiveness as a cause-and-effect idea. I’m not in business to hurt anybody. I know what it was like to be up to my eyeballs in debt and have to call people and tell them I couldn’t pay. I don’t wish that on anybody. Now, the con person who cons me—I’m going to send every lawyer I’ve got after you, that’s totally different. But if it’s an honest person in a bad situation, I want to see you get on the right foot as fast as you can.
