Cash has always been king, but it’s more important to your business now than ever. It’s a difficult time for businesses and their customers right now, and the way in which you go about asking for payment from debtors may need to be adjusted. Follow our strategies to ensure you continue getting paid in these uncertain times, while also ensuring your customers know you care.
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. E human and be understanding. Show your clients/customers that you have considered their situation.
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. Some people’s finances have been negatively impacted by the current situation, some positively, and some will be the same. Consider all your clients/customers, and spend time talking to those who are most negatively affected by the current situation.
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 hard to portray empathy in an email. Pick up the phone and show them you care and ensure you get the right message across.
4. When you call to discuss payment, first ask how they
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
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, and distress you may cause, by appearing to be behaving aggressively in these extreme times.
Contact us for phone scripts that will help you achieve better outcomes when phoning clients to discuss overdue accounts. We can also provide you with a Credit Management Guide to support you to manage your accounts receivable and ensure that you’re getting paid.