Kundun Consulting

Seasons greetings to you all. I hope that you have all taken time off to spend with you loved ones and to enjoy the end of a successful year.

This week brought an unexpected level of conflict to my world which I had never come across before.

I manage the cashflow forecasting for one of my clients who has a very good business although slightly bloated at the moment - but that is another story.

To cut a very long story short the model that I have created involves his staff doing a daily update and then I access the spreadsheet and manipulate the payments and sales predictions to ensure that we stay within the terms of our overdraft. It has worked very well for the last year and in last few months been very accurate.

Over the last week a sales promotion that was expected to do very well has been a flop and my sales predictions have been around 10% lower than expected. Coming into the Christmas period cash is obviously tight and this 10% has involved a little bit of manipulation to make ends meet. After performing a juggling act I managed to meet everything required except for a delay of a few days in making a scheduled tax payment.

Well here is where the fun started.

My client, through my almost flawless record over the last year, had expected my “predictions” to be closer to the mark. The fact that there were factors outside of my control seemed to bounce of his rather colourful description of my performance.

Thankfully we have managed to each understand each others issues with this process and have moved on - but it certainly has highlighted a fatal flaw that too many of us business owners make.

Communication is the single most critical factor in our client relationships and in managing their expectations.

The basic issue here was the fact that there was an expectation that everything was under control - but each of us were assuming different levels of control!

Your clients must receive regular feedback about how things are progressing to ensure that they are in the picture. With my experience in dealing with many different clients I had no issue with a delayed tax payment - but my client and his risk profile were not comfortable about the delay. His position was that he would have come up with the cash personally to ensure that it was met - if I had told him it would be late.

I did make the assumption that everything was OK - but didn’t check with my client to ensure that he was OK.

This also highlights the power of a clearly defined engagement specification. I had one that covered general engagement but not one covering the delivery of this specific service. That has now changed.

Every mistake is an opportunity to learn - just don’t make a habit of making mistakes.