This revenue is meaningless if your bank account is empty and you cannot pay your bills.
Why do very profitable companies still encounter enormous cash-flow challenges? These are some of the downfalls of a poorly managed sales team that is operating in a wrong sales mindset:
- INVOICES vs PAID INVOICES. Salespeople are paid on total revenues generated, not on revenues that have been paid in full from the client.
- IT’S NOT MY JOB. Salespeople are not responsible for collecting the money. There is someone else inside the firm who is tasked with the job of “begging” for payments.
- BIGGER IS BETTER THAN FASTER. Salespeople prefer to close bigger deals (regardless of the payment plan) since they are not going to be paid any extra commissions for fast payments!
