Page 64 - Paulisms: Gold Nuggets for Small Business

Recently, a person said to me, ‘Paul, I lost $20,000 last month.’ And I asked, ‘Why do you think that? How could you possibly do that?’ They said, ‘Well, part of the problem was I paid $30,000 in GST.’
This is not a loss; it’s a thing called cash flow. GST: you must pay it, but it’s not really going to affect your profitability. The only change is how much you pay, as it reflects money received and payments. The more GST you have to pay, the better it is because you’re making more money.
3.1.4 Invoicing
Why compromise people’s time by sending an invoice weeks or months after the invoice would have been due, which sometimes happens? For a client, there’s nothing more frustrating than thinking a job has been finished and closed off, and then weeks (or months) later, they receive another invoice. When a tradesperson goes to a home, why do they send an invoice later? They should ‘do it now’. If you have already quoted the job, try and get payment that day.
Recently I was working with a business and I asked the question: ‘Is your invoicing up to date?’ He said yes. Then a few minutes later he admitted he hadn’t sent them out for three weeks. He also said he couldn’t afford to pay himself a market salary. The business had a positive cash flow, money in the bank and no overdraft. I said, ‘If you send your invoices out when they should be going out, you will be able to pay yourself what you deserve!’
Businesses often have jobs that run over more than one month, which means that work has been incurred and stock used in each month. This is