Late payment due to cash flow issues caused by the pandemic have increased, particularly in the industries hardest hit by the coronavirus. The economy has recovered somewhat, but it still has a long way to go to return to pre-pandemic levels, especially in the most vulnerable sectors.
To maintain your cash flow you will need to adapt to the situation. This means you will have to find ways to resolve customer late payment due to cash flow issues. Here are some suggestions on how to deal with customers with cash flow problems.
Work with Customers
Cash flow issues are a reality that have to be dealt with. It is better to work with customers with late payment problems if at all possible, than turn them over to collection. If you work with a customer, you may be able to obtain payments sooner, avoid collection fees, and salvage the customer relationship. Customers will remember the suppliers who worked with them when the economy recovers.
Offer Payment Plan Options
Give your collectors the authority to work out payment plan options with customers. They know what will work best with a given customer.
Be flexible about releasing new orders as long as the customer is making progress on the overall balance due and keeping payment commitments.
Adjust your email reminders to fit the payment plan, and increase the frequency of contacts so the customer knows you are on top of the situation.
Allow Partial Payments with Online Portal
Provide an online portal and allow customers to make partial payments. Self-service portals make it easier for customers to pay, and encourage payment. It is better to get a partial payment than nothing at all.
Encourage your team to use the positive relationships they’ve developed with the customer to get moved up in the payment queue whenever cash is available.
Resolving late payment due to cash flow issues takes time. Accounts receivable automation can free up your AR team to work with customers to maintain cash flow.
AR and AP issues are easier to deal with if you have automated systems. Cloud-based AR and AP solutions with self-service portals and automated processes keep vendors and customers connected no matter where they are located.
Automation can help to reduce or eliminate the reasons for getting paid late. Automation makes this possible by eliminating or reducing the road blocks and delays that can cause late payments. Automation increases efficiency, reduces costs and results in increased profits, cash flow and shareholder value.
Lockstep Collect, a leader in cloud-based credit and collection platforms, can help you collect cash in 4 ways:
- Cloud-based solutions
- Automated customer communications
- Customer self-service
- Collections Activity Management
Lockstep Collect is an experienced software partner that can help you maximize your collections and cash flow in the new normal.
If you would like to learn more about how you can benefit from AR automation, and improve cash flow 31% or more take our AR Automation Product Tour.