We’ve all probably been watching the Olympics lately. Katie Ledecky won 5 gold medals and broke her own world record in the 800-meter freestyle. I’m fairly confident that what drove her achievement was a combination of talent and her dedication to training at a consistently high level. She may have been committed to being one percent better on a weekly or monthly basis.
We’re concluding a 4 part series on processes that affect your bottom line. We started with your sales process and then moved on to the production and delivery process. Today, we’ll be discussing your payment process. The goal here will be to look at ways to shorten cycle times, eliminate mistakes through improved processes and/or change your business model if you see a way to do things more efficiently.
We’re starting a four-part series today, on the four processes that affect your bottom line. They are The Sales Process, The Production Process, The Delivery Process and The Billing and Payment Process.
John D. Rockefeller was a famous industrialist and philanthropist. He founded Standard Oil Company and became the world’s richest man controlling 90% of all in the US at its peak. His fortune at his death was $23 billion in today’s dollars. He was also well known for his generosity and donated over $500 million to charities with medical and educational focus throughout his lifetime.
Last week we did a deeper dive in to Shortening Cycle Times. This week we’re going to talk about how to eliminate mistakes. No matter what type of business you’re in, we’ve all made mistakes in our sales cycle, production/delivery cycle or billing/payment cycle. As we try to shorten cycle times, that means we’re going faster. Often mistakes occur when that happens. Your sales person quotes the wrong price or doesn’t have updated costs in his quote. Your production people miss the specifications of the client’s product and you’ve created waste. You bill the client for the product but don’t include shipping or freight. All these things have a negative impact on profitability. So, how do we eliminate mistakes?
Last week, we had an overview of “3 Tips to Manage The Madness In Your Business.” The first tip was shortening cycle times. Depending on the type of business you’re in, all of us have a sales cycle, delivery cycle and a billing/payment cycle. If you’re a product, manufacturing or contracting company, you also have inventory or work in process, which is included in your production cycle. In theory, if you are able to reduce the amount it takes to sell, make, deliver or collect your business can do more in the same amount of time. Depending on your strategy and processes, you would choose to improve the cycle that has the most impact on your business either in financial or non-financial terms.