WHY YOUR CUSTOMERS ARE PAYING LATE
(7 REASONS - how to rectify them)
The Covid-19 pandemic is set to reach another grim milestone, with India on the verge of becoming the third country in the world to record 8 million cases.
When it hits the Eight million mark, many small & medium size business owners are worried about what the next few months will bring, including whether they will receive payment on time.
With the global economic uncertainty surrounding COVID-19, CASH FLOW is more important to survive the business. You might be looking for cash to help keep your business afloat, but your customer wants more time to pay , to help them manage their own cash flow.
We're committed to making sure we can do everything we can to help small & medium size business through this turbulent time.
First have you found out why your customers are regularly missing your payment deadlines? In this Pandemic.
Have you answered to their Excuses for not paid invoice on due date?
Whether it's a Government or Private company, it can be a useful exercise to analyze the excuses they are making in order to spot any notable trends.
If your customers are in an industry heavily affected by the Coronavirus, you should contact your customers now to remind them of your invoice and discuss whether they'll be able to pay on time.
Unfortunately when there is the smallest delay can turn a positive cash flow into a negative one, and then you might find time to improve your credit control process. A disputed invoice, not revealed earlier, could well be the reason for delaying payment.
When it comes to invoicing disputes, the best thing to do is try to improve your invoice process. Here we look at some of the most common excuses and offer tips on how your business can overcome them.
Reason 1. “Financial Crisis- awaiting for funds”
Financial Crisis
Before 2020, Coronavirus hit the whole country, Manufacturing Industry already had a reputation for late payments, although the pandemic has affected businesses of all sizes.
All Businesses began looking for ways to save money, some have chosen to delay paying their suppliers, contractors, vendors, and other small businesses they work with.
When cash flow is tight some businesses will put off making payments until they are in a better financial position. In the current situation, Company often priorities their vendor payments and if you find yourself at the bottom of that list you could find yourself waiting a long time to be paid.
We want to maintain a good relationship with customers and constantly keep in touch by putting in frequent courtesy calls and ensure that you remain at the top of their vendor payment list.Plus, if they are really experiencing cash flow difficulties this dialogue could allow you to find this out ahead of the payment date. Extend Credit Terms, We do not believe this is acceptable or appropriate - we chose these terms to survive businesses particularly at this time of great stress.
Reason 2: "Authorize Signatory not available."
At the end of 2019, the industry was experiencing a period of growth and projections were for this growth to continue throughout 2020 and into 2021. Working from home is really awesome… right up until your child throws up something on your laptop.
For many modern professionals, working from home every once in a while is a luxury that our respective companies afford us.
But my question is which environment actually allows us to be more productive: The Home office or The Office office.
Believe it or not, with the disruption created by the ongoing Covid-19 pandemic, many company owners and employees will be feeling more pressure than usual and may be struggling to adjust to an entirely new way of working. For many modern professionals and large companies, working from home every day and once in a while, they visit the office workplace.
However, I find that it's easy for you to become your own worst enemy. This could cause issues when it comes to communication and the verification of payments.
Whilst it does talk a lot about the opportunities to authorize signatory not available due to lockdown.
Reason 3: “Awaiting for Invoice accounting in System”
We found some companies, particularly above 1corer turnover business, have strict payment procedures and accountancy in order to get paid on time.
Learning these processes before it gets to the invoice due date will ensure that you never hear this excuse again. By showing which invoices have and haven't been paid against Po, it will help our customer or client to get paid when a large business refused to acknowledge the debt or current overdue invoice payment status.
Reason 4: “Importance of Terms & Condition.”
Especially when dealing with Customers, it's not uncommon to experience poor payment practices as a result of weaker cash flow.
One of the best ways to safeguard your cash flow against these practices is to make sure you and your client are on the same page from the beginning to clear terms and conditions.
If the finished work was completed, might not have produced the results they hoped for, If a piece of work didn't come out as the customer imagined, remind the customer that you were contracted to supply the service and not the results. Probe with questions about what they specifically don't like or would like to see different and do your best to work with them, offer to make revisions.
Reason 5: “Invoice Dispute”
Unfortunately, there will always be occasions when a customer might dispute an invoice.
Whatever the reasons for the complaint or error, the way handled a dispute can impact the speed at which you get paid.
If your research indicates they're a riskier customer, adopt your payment terms to protect your business.
For example, you should also consider reminding me about upcoming payments. If an unusually high valued amount invoice not paid on time and customers are saying they never received an invoice or bill yet, it could be time to start e-invoicing / e-billing or to make courtesy calls to confirm receipt of the invoice.
Reason 6: “Invoice Miss-placed / Required Copy of the Invoice”
Receipt of invoice by the customer is a vital element of getting paid on time, it's more important to send the invoice on time to the customer or receipt of invoice after dispatch.
What happens after you send the invoice will be secondary important.
Bitterly, I found Government customers arguing they didn't receive the invoice or that they lost it, or Person required another copy to accounting. Whether your customer says they never received the invoice, or that they lost it, it's important that you discover this as soon as possible to prevent late payments. Putting in a courtesy call on the day you expect the invoice to arrive to check that it did will ensure it got there on time. Or, you will switch to e-invoicing so that you don't have to worry about invoices getting lost in the post.
Here are Who is the credit control specialist: How they work? & is there career right for you! . Is your business required a Credit Controller Specialist?
Reason 7: “Can't afford to pay or forgot to pay on due date”
In these instances, it can be beneficial to set up a payment plan so that you get paid even if it's over a longer period of time.
Whether it's genuine or simply a stalling tactic to delay paying your bills, if your customers are repeatedly coming up with this excuse it could red signal that you need to interact with them more throughout the credit control process.
As well as calling to check that invoice has been received, you could try putting in a courtesy call a few days before the invoice is due to remind them of the upcoming deadline and confirm methods of payment.
This will keep your invoice in front of mind and ensure that they don't forget about making payment.
WHY YOUR CUSTOMERS ARE PAYING LATE
(7 REASONS - how to rectify them)
The Covid-19 pandemic is set to reach another grim milestone, with India on the verge of becoming the third country in the world to record 8 million cases.
When it hits the Eight million mark, many small & medium size business owners are worried about what the next few months will bring, including whether they will receive payment on time.
You might be looking for cash to help keep your business afloat, but your customer wants more time to pay , to help them manage their own cash flow.
When it comes to invoicing disputes, the best thing to do is try to improve your invoice process. Here we look at some of the most common excuses and offer tips on how your business can overcome them.
Reason 1. “Financial Crisis- awaiting for funds”
 |
| Financial Crisis |
Before 2020, Coronavirus hit the whole country, Manufacturing Industry already had a reputation for late payments, although the pandemic has affected businesses of all sizes.
All Businesses began looking for ways to save money, some have chosen to delay paying their suppliers, contractors, vendors, and other small businesses they work with.
When cash flow is tight some businesses will put off making payments until they are in a better financial position. In the current situation, Company often priorities their vendor payments and if you find yourself at the bottom of that list you could find yourself waiting a long time to be paid.
Plus, if they are really experiencing cash flow difficulties this dialogue could allow you to find this out ahead of the payment date. Extend Credit Terms, We do not believe this is acceptable or appropriate - we chose these terms to survive businesses particularly at this time of great stress.
Reason 2: "Authorize Signatory not available."
But my question is which environment actually allows us to be more productive: The Home office or The Office office.
Reason 3: “Awaiting for Invoice accounting in System”
We found some companies, particularly above 1corer turnover business, have strict payment procedures and accountancy in order to get paid on time.
Learning these processes before it gets to the invoice due date will ensure that you never hear this excuse again. By showing which invoices have and haven't been paid against Po, it will help our customer or client to get paid when a large business refused to acknowledge the debt or current overdue invoice payment status.
Reason 4: “Importance of Terms & Condition.”
One of the best ways to safeguard your cash flow against these practices is to make sure you and your client are on the same page from the beginning to clear terms and conditions.
Reason 5: “Invoice Dispute”
Reason 6: “Invoice Miss-placed / Required Copy of the Invoice”
Bitterly, I found Government customers arguing they didn't receive the invoice or that they lost it, or Person required another copy to accounting. Whether your customer says they never received the invoice, or that they lost it, it's important that you discover this as soon as possible to prevent late payments. Putting in a courtesy call on the day you expect the invoice to arrive to check that it did will ensure it got there on time. Or, you will switch to e-invoicing so that you don't have to worry about invoices getting lost in the post.
Here are Who is the credit control specialist: How they work? & is there career right for you! . Is your business required a Credit Controller Specialist?
Reason 7: “Can't afford to pay or forgot to pay on due date”
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