An invoice is not money until it is paid. Know who makes sure it is, and the three words ORIGIN uses for money, so you read every report correctly.
Collection
Collection means making sure an invoice is paid. PMO owns it, because the Team Lead holds the relationship with the client.
Three steps, in this order
- 1Before a payment is dueThe Team Lead reminds the client.
- 2If the date passesThe Team Lead asks for a new date in writing.
- 3If the payment is still missingThe Cashflow Team takes over the matter and keeps Management informed.
The Team Lead stays the warm voice throughout. When firmness is needed, it comes from the Cashflow Team, so the working relationship is protected.
What you do about a payment
You will rarely chase a payment yourself. You help by never promising a client more time to pay, and by telling your Team Lead if a client mentions a payment problem in passing.
A client says on a call, "our finance team is slow this quarter". What do you do?
More time to pay is never yours to promise.
A remark like that sounds like small talk. Pass it to your Team Lead the same day: it is an early warning.
PMO collects, and the Cashflow Team steps in when needed.
Three words for money
- On signatureNew business
What clients have signed.
- When the invoice is issuedRevenue
What we have invoiced.
- When the money arrivesCollected
What has been paid into the bank.
They are three different numbers, and they never match on the same day.
These are ORIGIN's meanings: here, revenue means invoiced, even if another firm uses the word differently.
A colleague asks you, "how much did we make this month?" What do you do first?
Each of the three counts at a different moment.
When someone asks "how much did we make?", ask which of the three they mean.
Signed, invoiced and paid are three different things.
Before you move on
Three questions before you move on. Type your answer, send it, then check it.
Your answers stay on this device.1Who owns collection, and why?
The answerPMO, because the Team Lead holds the relationship with the client.
2A payment is still missing after the Team Lead asked for a new date. What happens next?
The answerThe Cashflow Team takes over the matter and keeps Management informed.
3What do new business, revenue and collected each mean?
The answerWhat clients have signed, what we have invoiced, and what has been paid into the bank.
Signed, invoiced, paid. Three numbers.
Next: what is not healthy.