Krzysiek Romaniak runs two companies. Flowmore is a marketing agency that builds outbound sales for its clients, and Energetyczny Projekt builds homes and carries out energy-efficiency retrofits across Poland. In their early years both companies ran into the same problem. At one point Krzysiek had about PLN 200,000 in invoices his customers had not paid. Some were simply stalling, some had cash flow problems of their own, and a few went bankrupt before anyone called them. The money owed by those customers was never recovered.
At a webinar, Krzysiek talked about what this taught him. We pulled out five lessons that apply to anyone who runs a company and chases payments themselves.
Good work doesn’t guarantee payment
For his first few years, Krzysiek assumed that a customer who received good service would pay on time, because that is what reasonable people do. When an invoice went overdue, he put it down to a one-off oversight and pushed the call to next week. Next week turned into next month, next month into next quarter, and some of those invoices became uncollectible because the customers went under.
The law is on the creditor’s side, but it won’t bring the money in by itself. Doing the work and getting paid for it are two separate processes, and each one needs a plan.
Collections will always lose to more urgent work
A small company founder’s calendar is full of sales calls, hiring, customer problems and team meetings. A call about last month’s invoice is somewhere on the list, but never at the top. It is easy to see why. A sales call might bring a new contract, while a call to a debtor is uncomfortable and nobody knows how it will end.
Each of those decisions makes sense on its own. Repeated every week for two years, they added up to about PLN 200,000 in overdue invoices for Krzysiek. If following up on payments depends on the founder finding time, sooner or later it stops happening. It has to run on fixed rules, whatever the founder’s calendar looks like.
Nobody likes calling people about money
When the problem grew, Krzysiek handed the calls at Energetyczny Projekt to the admin staff. It worked for a while, and then it turned out that nobody liked the job. Calls to customers were easy to put off, and the people in that role kept changing. In an interview for our customer story he put it like this.
“Chasing money is work most people simply aren’t built for, psychologically. You’re calling people who react badly and you have to stay assertive.”
Krzysiek Romaniak, founder of Flowmore and co-founder of Energetyczny Projekt
Handing manual collections to someone else only moves the problem to a person who will also put the work off.
The biggest costs aren’t in any budget
Krzysiek estimates that manual collections cost Energetyczny Projekt PLN 5,000 to 10,000 a month, counting the law firm, registry subscriptions and staff time. That cost can be counted. The bigger ones didn’t show up in any report.
- No cash for opportunities the company could have taken.
- The stress and time he spent as CEO watching for payments.
- Tension in the team whenever money for wages ran short.
- Worse relationships with suppliers once he started paying them late himself.
Every founder tracks gross profit and new revenue. Hardly anyone counts the cost of a payment mess, even though it comes back as exhaustion, postponed decisions and financing on worse terms. We show how to work it out in our post on what manual receivables really cost.
The fix was cheaper than he expected
When Krzysiek started looking for a solution, he expected a big IT project. A collections module for Enova, the ERP Energetyczny Projekt uses, would have cost around PLN 25,000 and taken months to roll out. In the end he chose Sunbay, which he pays for per invoice handled, so there was no large upfront cost. Today reminders and interest notes go out automatically, and collections, which used to cost the company PLN 5,000 to 10,000 a month, bring in a few thousand PLN a month from interest notes. The details are in the Energetyczny Projekt story.
Krzysiek’s conclusion is that founders tend to overestimate the cost and difficulty of fixing processes like this. What holds them back is more often their picture of the rollout than the budget.
Three things to do
- Don’t assume a customer will pay just because the work was done well. Plan what happens before the due date and after it.
- Take payment follow-up off your own to-do list and base it on fixed rules that work without you.
- Before deciding that fixing the process is too expensive, check what it would actually cost.
If you want to start with the reminders themselves, use our payment reminder email templates.
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