Bonusode: How to Master MSP Cash Flow and Credit Management

Nicki Kinton is the founder of Confident Cashflow, a Wiltshire-based finance business. A credit management professional, Nicki works with companies of all sizes. She specialises in helping clients hit their growth goals, tackling cash flow issues and developing better credit management strategies. Here, she shares her advice on improving your MSP cash flow.

An Interview with Nicki KintonWhy Late Payments are a Symptom not the Cause of Your MSP Cash Flow Issues

Nicki explains that late payments happen for lots of different reasons and most of these are actually within the business’s control rather than their client’s control. She continues:

“Late payments are an indication that something hasn’t happened that should have earlier in the ‘order to cash’ process. That could be at any stage from receiving the enquiry right through to the expectation of getting paid.

“So maybe you didn’t ask the right questions at the beginning or do your due diligence. There’s been a breakdown somewhere in the process. So you have to look internally at the things you can control before you blame the client.”

Why You Need a Robust Credit Policy Regardless of the Size of Your MSP

Your credit policies management practices are all proportionate, says Nicki, and they grow and change as the business does. “But even if you’re a tiny business, you need a policy of some sort. It could be as simple as a checklist that maps the processes.

“Having this in place takes the emotion out of it. So if you’ve got a late payment, you can refer to the policy to see what you should be doing and when. It’s less personal that way, too. You’re following company policy.

“It makes conversations about payments less awkward, too. But the most important thing is that it enables you to be consistent. So if something goes wrong, instead of panicking and not taking action, you just refer to the policy for the next step.”

How Your Mindset Towards Payment Terms can Influence Your MSP Cash Flow

Everyone has their own particular feelings around money, which often stem from the way we’re brought up. Says Nicki: “Particularly in the UK, we’re brought up to believe that money is private and talking about it is crass or rude.

“And while that’s a personal mindset or belief, it leaks into our business, particularly if we’re the ones doing the payment chasing. So we feel uncomfortable talking about money, and we don’t put enough thought into credit control and management.

“We’re frightened of confrontation or we don’t want to upset a key client in our business. So we hold ourselves back from having the conversations that we really should do. Really, we should have these discussions right at the start of the working relationship.”

How MSP Owners can Avoid Frequent Late Payments

As Nicki said, have the conversation around your payment terms right at the start. “Don’t just present them in your contract and expect that they’ll be followed. Because the person who signs the contract might not be the person who approached you to help them.

“Whoever is responsible for finance is the person who pays the bills. And they won’t care if their payment terms don’t match yours. Maybe you want to be paid within seven days but they only pay at the end of the month. And you don’t realise that until you’re waiting for payment.

“So find out if you need a purchase order number. Clarify the process to have your invoice approved and added to the payment run. Establish what barriers there might be on you getting paid on your preferred terms. If there are any, then you have a conversation and start negotiating. But get all the information as soon as you can.”

How to Connect With Nicki KintonConfident CashflowLike Confident Cashflow on FacebookFollow Confident Cashflow on LinkedInFollow Confident Cashflow on TwitterConnect with Nicki on LinkedInni***@co***************.com” target=”_blank” rel=”noopener”>Email NickiHow to Connect With MeSubscribe to TubbTalk RSS feedSubscribe, rate, and review TubbTalk on iTunesSubscribe and rate TubbTalk on SpotifyFollow TubbTalk on iHeartRadioFollow @tubblog on TwitterMentioned in This EpisodeNicki’s workshopBook: Thomas Erikson: Surrounded by Idiots: The Four Types of Human Behaviour (or, How to Understand Those Who Cannot Be Understood) (Vermilion)Personality test: DiSC ProfileBook: Dr Andy Cope: The Art of Being BrilliantYou Might Also be Interested inHow to Get a Grip on Your Small Business Finances With a Weekly Financial ReportOntrees: Personal Finance DashboardWhy MSP Owners Should Schedule a Mid-Year Business Review