MAL39:20 | Page 89

Sometimes , small discounts are enough to speed up collections in economic hardship . Provide your customers with short-term relief in exchange for prompt payments . This could work for customers in temporary financial distress ( i . e . " Fair " accounts ). An example of short-term relief you can give is suspending interest and late fees .

Work out payment plans with your customers . This could work for customers having cash flow problems or liquidity issues , and therefore , not being able to pay in full . Accepting what can be collected in the short term through payment plans is better than having to write the accounts receivable off in the event that Covid-19 worsens the economic downturn .

Streamline your accounts receivable process

Minor hiccups in your accounts receivable process in normal times can become inherent inefficiencies in coronavirus times . Ironing them out would help you save precious time and working capital that your company badly needs to weather the storm .

Adjust collections operation to the availability of your

workforce . Think of a review of your operations !

Depending on each company ' s circumstances regarding Covid-19 , their collections staff may conduct only part of their collections activities or have to suspend them all . If your company finds itself in this situation , to make sure that critical accounts receivable tasks are fulfilled , you may need to establish a strategic partnership with a collections agency where collections efficiency and capacity are assured .

A comprehensive analysis of policy , insight , people , processes , tools , technology , data , management information and data and analytics and strategy will deliver the path from current state to desired state .

One of the best examples of operational negation is when analytics insight is ignored in order to gain operational efficiency - for example , ignoring the risk segmentation of accounts to build a larger dialing campaign ! There are many common areas of poor practice because few organizations really have sight of policy , process and execution from data to insights , through workflow into operational execution and performance measurement .

Given the cost of bad debt on the balance sheet , it is still surprising how many organizations do not do a full annual assessment of their customer capabilities and actual vs . potential performance to plan and forecast .

All said and done , think of how a collections partner can help you ; adapt your collections approaches to the development of the pandemic and changes in your customers ' circumstances ; accelerate your internal efforts to collect outstanding accounts receivable ; and aid the execution of your company ' s contingency plans to minimize cash flow risks .

Accounts receivable are often the biggest asset on your company ' s balance sheet . By optimizing collections according to the progress of Covid-19 , you help enhance the much needed cash inflows that bring financial flexibility and resilience to your company during downturns .

Wasilwa Miriongi is a Certified Credit Professional currently working as the Managing Director , Del Creder Credit Management Limited . You can engage him on this or related matters via email at : WMiriongi @ gmail . com .

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