Boundaries with Money in Business

Money is always a touchy subject. It is hard for many of us to set boundaries with money just with ourselves, so it is much harder to set them with others, but if we don’t learn to set boundaries, we are going to end up “shortchanged” in the end.

If we are in business, it’s imperative we set good boundaries with money, which means being careful in regards to extending credit and making loans. We may actually be better at saying, “No” to people in our personal lives—friends or family members—about lending money, but we have a harder time doing it with clients or business partners.

For example, we may own a company where we allow payment plans. Many a company has gotten itself into trouble with “Buy now, pay later” plans or simply offering services with monthly payments, which can result in clients falling behind on their payments. Customers may default on payments, often for understandable reasons such as illness or a lost job, but other times, people do so because they overspend and don’t have control over their own finances. In these cases, we do not have to make those people’s problems our problems.

A fine line exists in these cases between kindness and cruelty. We can extend credit and payment plans, but we need to be clear upfront that if the bill isn’t paid off in a reasonable time based on the payment plan set up, that we will send the customer to collections or shut the power off, or the person’s business will no longer be wanted. Customers who repeatedly abuse a good situation by paying a little to string you along and then wanting not to pay the next month or paying less than they owe is not fair for the company. As a business owner, we have to think about our employees and our own time and wages that are affected if not hurt by such behaviors from clients.

In time, we should learn not to put ourselves into situations where we will end up extending credit and where our own financial welfare will be at the mercy of a client who fails to be financially responsible.

We must be careful upfront who we do business with, whether it is partnering with another company, having a business partner when we begin the company, or dealing with clients who will not pay cash upfront. Too often, a business partner ends up paying all the bills because another partner failed to be responsible, or spent more than he had, or just walked out on a commitment.

We hear people say things like, “It’s just money” or “Money isn’t everything” or “Don’t let money ruin a friendship,” but the truth is that money is a lot to people. It is what keeps food in their stomachs and a roof over their heads, and it is something we all fear not having. Don’t let the fear of making someone angry keep you from making a good business decision around money. If the other person can’t understand why you need to set financial boundaries with him and he gets angry, then he isn’t a person you would have been fortunate to do business with anyway. And if you had done business with him and had a problem with him, then down the road, neither of you would have been happy.

I am not advocating holding the purse strings tightly. I am saying that you need to use your best judgment before you open them. Setting boundaries upfront regarding money with yourself and your clients and customers will save you numerous headaches in the long run.