Cash has always been king, but it’s more important to your business now than ever. Follow our strategies to ensure you continue getting paid in these uncertain times:
1. Continue to enforce your Terms of Trade, however, your approach must change.
Don’t adjust your expectation to receive what you are owed, but tread carefully with your request for payment or you could risk irreparable damage to your brand and reputation.
2. Triage your debtors.
Consider each customer’s likely financial position; how impacted will their cashflow be due to Covid-19? Those who are most at risk need to be treated differently, and with more empathy and flexibility, than those who have been minimally impacted.
3. A phone call is likely to be the most appropriate contact method.
Everyone is being inundated with emails right now, so an email may get missed or inadvertently deleted. Also, it’s had to portray empathy in an email.
4. When you call to discuss payment, first ask how they are.
Your initial triage assumptions may be wrong, and they may have been more impacted by Covid-19 than you expected. Be respectful and kind in your positioning. If your customer is really struggling right now, demanding payment within 48 hours is not appropriate.
5. Offer severely impacted customers options to resolve their balance.
Be honest and tell the customer you are calling to discuss their overdue account. Offer them some options, such as spreading payments across the next 6-12 months. Empathy, directness and professionalism are key.
6. Reach an agreement, record specific details and set a reminder to check when due again.
If payment doesn’t come through on the agreed date, follow up with the customer (again, with empathy, flexibility and options). Flexibility now will pay off in the future.
In reality, some customers may simply be unable to make any payment. In this case, it may be pointless referring their account to a debt collection agency. Consider the potential brand damage of appearing to be behaving aggressively in these extreme times.
Get our free Phone Scripts and Credit Management Guide that will help you achieve better outcomes when phoning clients to discuss overdue accounts and support you to manage your accounts receivable and ensure that you’re getting paid.