There are two types of businesses: those that have had tough financial times already, and…
The Importance of Deadlines for Financial Success
Deadlines. We all love to hate them.
They are a necessary evil, however, if you want to succeed. I’ve identified three types of deadlines. They relate to all areas of business, but I’ll focus on each of them, from a financial perspective.
Type 1. Externally imposed deadlines.
Deadlines like the dreaded Business Activity Statement (BAS) lodgement and payment dates, income tax return lodgements, payment deadlines for bills to pay, credit card payment deadlines; you get the picture.
We have no control over these deadlines and whilst we make every effort to meet them, sometimes we fall short and are late. With externally imposed deadlines, there is often a known penalty if you are late, think interest on credit cards, late payment penalties with the Australian Taxation Office (ATO) and so on. Some of these penalties are harsh enough to encourage us to make sure we don’t have to pay the penalties, others less so.
There will be times when it is just impossible to meet the deadlines. This happens when you have cash flow challenges, and there simply isn’t enough money to go around. My recommendation to clients is to have a phone conversation with the supplier and advise when you will be able to make the payment with the reasons for the delay or agree on a payment plan with them. This doesn’t apply to credit cards, however, where you need to make sure you meet the minimum monthly payment.
Type 2. Self-imposed deadlines.
This is one of my favourite deadlines as I set myself up with challenges on when I’ll get work done so that I can invoice a client. A few months ago, one of my clients was negotiating a large contract, and it felt like the company was dragging the chain. The signing of the contract and payment of the deposit was necessary for the financial viability of my clients’ business.
He contacted his prospect and gave them a deadline by which to take up the contract and advised that if he didn’t have a decision by then, he could not guarantee that he would be able to fulfil the contract within the time period they had already agreed as he would be taking on another project.
Type 3. Accountability checks.
The key to making sure you are reviewing your numbers is to have accountability, whether that is an email, a phone call or a full mentoring or coaching session. It might even be a management meeting with yourself that my fellow Smallville Contributor, Rosemary Shapiro-Liu, talks about in her article, Become your own best manager.
The important component of self-imposed and accountability checks is treating them as though they are external deadlines. It’s really easy to let these types of deadlines go, finding all the various reasons why you can’t deal with it when you said you would.
I’ve recently been working with a client where we have a monthly accountability session booked in the diary six months in advance. The client pushed back the meeting one week, then another week, then another few days until we eventually had the meeting to review the previous months’ numbers 24 days after the end of the month. Whilst we did review the numbers, the meeting was mostly around what had gone wrong with the systems such that the figures weren’t ready when they should have been on the 5th.
When you are looking at historical numbers, it’s imperative that you see them as soon as possible after the end of the month so that if you need to change direction, focus on improving a key metric you can do so straight away and not allow the problem to continue for a few more weeks.
So, whilst we all dislike deadlines imposed on us, consider creating some self-imposed or accountability deadlines that will keep your eyes on the numbers in a timely manner.
“The opinions expressed by Smallville Contributors are their own, not those of www.smallville.com.au"
SHARE THIS ARTICLE WITH LIKE MINDED SMALL BUSINESS PEOPLE