Getting paid during Coronavirus pandemic

As the uncertainty continues, one thing that you are able to affect and influence is how your business continues and, more importantly, survives.

These tips will hopefully provide food for thought, as everyone settles down into “the new normal”.

Shorten payment terms

By shortening your payment terms, you are reducing the risk for your own business of non-payment.  Shortening payment terms will also assist you with maintaining a regular cash-flow, rather than waiting 30 days before you receive payment.

To shorten your payment terms you need to have this conversation with your customers at the point of sale.  So, sales reps must be made aware of these changes so they can pass the information on to your customers.

Another way to reduce risk is to credit check all new customers and even monitor them to keep tabs on their credit rating over the current weeks and months.  Do this with your existing customers too!

Lengthening terms

Some people have suggested extending payment terms to their customers, however, as explained above, you are putting yourself at risk by doing this.  We suggest instead that you keep in touch with your clients, maintain regular contact and assess this on a case by case basis.

Perhaps for aged debtors you can compromise and offer formal and regular payment plan agreements.  Ensure you monitor payment plans regularly.

Keep track of your numbers

No-one likes surprises, particularly when it comes to business finances.  Track regularly, that way you can adjust things when required, not when too late!

Look at short term funding options:

  • Invoice Finance – this enables businesses to release funds against the value of their unpaid invoices.
  • Business Loans – quick access to money to use for any business purpose.
  • Asset Refinance – if you have money tied up in other assets, such as plant and machinery, you may want to consider asset refinancing to boost your cash flow.

Credit Control Measures:

Don’t presume that your customers are not busy with work or that they are self-isolating. One thing’s for sure, don’t feel guilty chasing for payments.  Stick to a credit control or debt recovery process that you have in place.

What to look out for:  If your customer stops responding to your requests for payments, then begin your formal process to recover any aged debts outstanding to you.  Don’t leave it too long before you chase for payment; more than 45-60 days with no-response from your customer means it’s time to act and start your debt recovery process.

For assistance with monthly outsourced credit control, for as little as two hours work per month, we help you reduce your business risk in these uncertain times and ensure your customers pay.

Our Credit Control service includes:

  • Pro-active calling to request payments from customers
  • Running full ledger reports via access to your cloud software
  • Statement runs
  • 1streminder notice letters
  • Letters Before Action/Claim/Demand
  • Statutory Demands
  • Payment plan letters & monitoring for aged debtors
  • Small Claims Court assistance
  • Bailiff instruction from our affiliate if necessary
  • Debtor Negotiation, ADR carried out by Qualified Civil and Commercial Mediators
  • Credit reporting, company monitoring, & land registry searches, plus general customer/ debtor research and address verification
  • Daily & Weekly report updates on progress
  • Monthly conference call to discuss collections
  • Advice and support from the FJCM team
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Government information:

  • As we’ve seen throughout all of this, Government guidelines are constantly changing. Further information in relation to Statutory Sick Pay, Coronavirus Job Retention Scheme and general business finance and support can be found here.

HMRC COVID-19 HELPLINE: 0800 0159 559


For advice and support for your business today, call us on 01494 422742

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