Business relations just like any other relation requires mutual respect, effort and most importantly clarity. When entering in any business relationship, it’s important to ensure that the terms and conditions are clear and well understood by both parties, otherwise, it might result in unintended consequences.
Here is a story to illustrate
You remember the article I wrote on leveraging? ( if not read it here). As I ventured in a new business, I met someone who offered me to leverage off her established business and customer base. This was because she was struggling to meet the demands of her customers due to limited capital and a result, we pooled our resources.
Typical of an accountant, I always want to ensure things are recorded. I bought a book where we will record all money deposited and money withdrawn so that it easier at any point in time to reconcile the numbers. I used the book for a week before I left for an out of town job.
Less than a week in my absence, the numbers were not reconciling. My friend whom I left the task to record everything thought it would be easier to remember hence she did not record anything in my absence. Long story short , they could not reconcile money to the value of N$500. The money was not the issue but how they handled the situation what was surprised me a little.
This is what transpired:
- My friend whom I left the responsibility tried to convince me why it was not her problem
- She then demanded that other party ( who has an established business ) to pay up for the short fall
- The other party then gave back our machine and thought its best if we kept it and just call us if she is short.
I then had to intervene. This situation taught me a few things:
- It’s important that things are recorded to ensure that there is if there are disputes, facts can be presented on the table and solution can be reached.
- In an event that there is a problem, every party must take responsibility of their action. Both parties were wrong in this case. One failed to record the money and the other failed to account for the money.
- Find a workable solution to the problem, a dispute should not end a productive and potentially good business deal. I ended up asking the two to split the cost so that they cover the shortage.
- They agreed to start recording the new amounts and continue the business arrangement.
The lesson here, please avoid dispute by having clear recording all money received and handed over and when you are in a dispute, settle it in a more calming way to avoid damaging what could assist your business grow.
Love and Peace