There is something I always tell my team, “A sale is not complete until money is in the bank.” Many salespeople may not agree with me, but we, the accountants know that debtors, if not well managed, can bring big companies down, and it’s even worse for startups.

Selling on credit can have a serious negative impact on your cash flows. Just ask yourself-: If a customer buys on credit, the stock is gone and you have no cash! How do you replenish? You either must get goods on credit yourself, go for your savings or borrow from somewhere. Is that wise? Only if you have excess cash or can access loans and credits to replenish.

Many of us do not have clear terms of debt repayment. The result of this is that you and your debtors will start playing a cat and mouse game. Many Kenyans I have observed, are poor paymasters. They smile when they are buying. And funny enough you smile back. When it is time to pay, it’s all tears. And just like that, your money goes. Never to be seen again.

What follows thereafter! You can’t pay your overheads, replenish your stock nor pay self. Eventually, you will end up closing down. So let’s be wise. Sell on credit wisely -if you must-. Better still, forget the debts-approach method of selling.

One of my fans told me this -; Sales is vanity, profit is sanity and cash (liquidity) is reality. Can’t agree more. Share with me your experience or thoughts on this issue. Remember a sale is not complete until money gets to the bank. It is better to have low sales with money in the bank than high sales with no cash in the bank. Over to you my great people. GMMM way is the way to go. Debtors can hinder you from getting to the top.