How Your Paradigm Influences Your Cash Flow and Bad Debts

Today’s article is about how your paradigm influences your cash flow and bad debts. You might say how does that apply to me? Read on and you will learn how it does.

Athletes for years wanted to break the 4-minute mile. It was once thought to be impossible. Then on May 6, 1954, Roger Bannister Roger Bannister - Wikipedia, the free encyclopedia ran the mile in 3 min 59.4s. A challenge thought impossible by Bannister himself at one time. In fact after the devastation of his failure at the 1952 Olympics, Bannister spent two months deciding whether to give up running. He decided on a new goal: To be the first man to run a mile in under four minutes. Accordingly, he intensified his training. It all started with a decision. He asked himself the question, what do I really want?

When Wernher von Braun, considered by some the father of the space program Wernher von Braun - Wikipedia, the free encyclopedia was asked by President Kennedy what it would take to get to the moon. His response was, “the will to do it.” In fact one of Wernher von Braun’s other famous quotes is “I have learned to use the word 'impossible' with the greatest caution.”

Typically when we each of us set goals, we set our goal based on what we think we can do, or we base the goal on our past. This is our paradigm. It can also be called our belief system or our way of thinking. Our current paradigm is like a governor on our performance. We usually do not base our goal on what we really want. Additionally, we sometimes set our goal based on what others think we can do or on some study. We need to break these barriers of self-limitation. The truth is that all of us have infinite and unlimited potential and that all things are possible. Author Joel Barker writes “In order to change your future, you must be willing and able to change your paradigm.” Joel Barker -- Welcome So let’s look at a specific example.

My last article was titled “Accounts Receivable - How to Improve Cash Flow and Reduce Bad Debts.” I have worked with business owners for the past 36 years and one of the most challenging issues of every business is the collection of accounts receivable. In the article I made some recommendations that will improve cash flow and reduce bad debts for every business owner. One of those recommendations was to establish goals and standards.

One of those goals or standards might be the average collection period, usually expressed in day. That is the average number if days it takes for an invoice to be collected. In this example let’s say that our company collects its invoices within an average of 52 days. That is a long time considering the work has been done, employees and associated costs have been paid and that it is possible to have the average be zero days with today’s modern financial tools. These tools are credit cards, Paypal, automatic debit, etc.

So how would a business owner begin? That is, reduce the number of days from 52 to something dramatically shorter. It would start with the question, “What do I really want my average collection period to be?” Then the next step is to make a decision. Napoleon Hill wrote “God throws himself on the side of the individual who knows exactly what he wants, if he is determined to get just that.” The Napoleon Hill Foundation Then realize that for every result we want in our lives, there is a way of thinking and a way of acting. You have heard it said, “If you always do what you have always have done, you will always get what you have always gotten.” So you must change you thinking, your policies and your actions with regards to accounts receivable.

It is a simple as that. Success and decision are partners. If you have any questions or comments on this article, let me know. I would love to hear from you. Send me your success stories. Until next time, remember, have fun and create a great day.