Cash is king. A entrepreneurial wisdom that contains a great deal of truth, especially in times of crisis. It is companies with sufficient liquidity that keep their heads above water and even manage to turn crises to opportunities. Following up on invoices is crucial to get you company through this corona crisis.
Unpaid invoices cause a snowball effect. Companies with too many outstanding invoices threaten to no longer be able to pay their own creditors. In this way, one unpaid invoice takes care of another. One defaulter drags another.
Forty percent of all invoices sent by Belgian companies are still outstanding after the due date. About ten percent becomes an outright non-payment that happens too late of even not at all. Last year, the companies in our country together wrote off more than three percent of their turnover due to bad debts. Outstanding and unpaid invoices therefore put a brake on employment and economic growth.
A good cash flow is not only important today to be able to pay your own bills. It is also a condition to be able to rely on certain temporary corona measures. When you can demonstrate to your bank that the liquidity of your company is solid, you will gain easier access to support measures.
Follow up on invoices to monitor your cash flow
To monitor your cash flow, it is necessary to follow up on your invoices properly. That starts with timely invoicing. The longer you wait to send your invoices, the later the payment term starts and the longer you have to wait for your money. Clearly provide your customer with your invoice conditions from the start. In this way you already proactively avoid late payments.
Many companies still do not have a watertight system for following up on invoices. There are many digital tools on the market today that partly automate your credit management. Moreover, these tools are relatively easy to use and this for a limited cost price. For example, you can send a first reminder a few days after the payment term has expired. Outstanding invoices often do not indicate bad will. Usually, the customers lost sight of the invoice for a while or they are temporarily unable to pay. Especially for the first group, a simple reminder can already make a world of difference.
Go after unpaid invoices empathically and pragmatically
What do you do with that second group, with the customers wo cannot pay their invoices? Especially in times of crisis it is important to show empathy. The corona crisis affects thousands of companies. They are all in this together. Outstanding invoices create difficult dilemmas. Of course, you want to be paid for your work. You have to monitor your cash flow to survive the crisis yourself and to keep growing. But too harsh an approach can drive customers away for good, when you need every customer. Moreover, the crisis is finite: customers who cannot pay their invoices (on time) today may be able to do so again within a few months. That’s why it’s important to discuss interim solutions.
In times of crisis, it comes down to being empathetic and pragmatic when dealing with outstanding invoices. Sit down with your customer (now virtually) to work out a solution. Partial payments can be a golden mean. You will receive part of the amount due, so that you can at least meet your own financial obligations. Moreover, you do not blow up the customer relationship that way. The goodwill you show can be useful to you later. However, if you choose a tougher approach, you risk being left empty-handed. You risk losing both your money and your customer.
Following up on unpaid invoices is time consuming. It therefore pays to outsource your credit management. Go Solid ensures correct follow-up, tight timing and motivational wording that guarantee a customer-friendly attitude and efficient collection. On average, you will receive the money from your invoice within a month. The full amount. Because the services via Go Solid are free of charge. In this way you link a good reputation to a positive cash flow.
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