What’s next for your business? COVID-19: Three steps to take today for cash flow and operational efficiency.

Nicole Dwyer
What's Next Covid-19

Four months ago, we explored how Covid-19 impacted our teams and our businesses with the stay-at-home orders, and discussed ways to make this new work paradigm manageable, and maybe even fun.

Today, the truth is, we still don’t know how long this might last.  While some countries and various US states are in various stages of “re-opening”, others are issuing a second shut-down order. Organizations like healthdata.org are predicting a second round of the pandemic to hit in December. So we really don’t know when this “ends.”

It’s time now to consider that today IS the “new normal”. 

The pandemic situation will continue to evolve, and we can’t predict how, or how fast, things might change. But this doesn’t mean the future of your business is completely out of your hands. In fact, the uncertainty of the future is precisely why it’s important for you to take steps now to sustain and even increase your cash flow and operational efficiency. 

Today is the day to lead through uncertainty.

Here are three steps you should take to get started.

  1. Use the data. You have quite a bit of data available to you that can provide valuable insight into the health of your business and your customers’ businesses. Having visibility into the metrics behind your internal AR processes - aging invoices, invoice processing time, outstanding disputes, etc. - will highlight for you where you can benefit from operational improvements and automation. 

    Using available data about your customers’ payment histories and preferred payment channels can offer ideas into how to best manage the collections process and create flexible options that maintain the customer relationship. 

    If this information is spread across multiple systems, (ERP, CRM, billing software) then you’d be smart to look into an AR platform that pulls this together for you. In a time when your AR team is possible remote - or working restricted hours in the office - manual hunting of information is low value, high effort work. 

    But the data is important to collect. The time your team takes to analyze the information you already have will be time well-invested when you can turn it into actions that bring more cash into the business and preserve positive and long-standing customer connections.
  2. Re-evaluate your collections process. Four months ago, your collections process might have gone a little sideways with all the operational changes that were forced upon businesses. And since then, many businesses have given their customers quite a bit of latitude when it comes to collections, as we are all in this sea of unknown together.

    But if we consider today the “new normal”, then we need to adjust our collections process for an unstable market in which sudden and rapid change is possible. The three critical areas to evaluate are:

      • How is my team able to function? If your team is remote, then they need information and tools available in their work-from-home environment to be able to reach out to customers, update account information and process payments.  If your team is in the office, but on restricted or alternating hours due to the need for limited capacity in the office, then that limited access needs to be considered as you determine the productivity and new process flow of your collections efforts.
      • What is the new flexibility - and the new boundaries - needed in the collections process? Your customers’ business uncertainty has become your own business uncertainty. How can payment terms be adjusted to accommodate today’s market? Consider new payment channels to offer, as well. Flexibility for both you and your customers’ could mean you’re both helping each other thrive through challenging times. New flexibility in some areas of your collections process may mean tighter boundaries in others, however. By opening up a new payment channel, you may need to consider shortening the payment window, or shutting down another, less convenient or more expensive payment option. As you redefine your process, the focus is the health of your business, not just flexibility for struggling businesses. 
      • How can I communicate best with my customers? Collections is a process that requires high-touch.  When we’re talking about money, it’s best to have frequent, friendly and clear communication between all parties.  If the changes the pandemic brought made it more difficult for your teams to communicate regularly with customers, or if your customers were the ones who seemed to drop out of touch, now is the time to re-establish a friendly and consistent outreach program. Whether you’re communicating changes to your processes and policies, or just checking in, a consistent cadence of outreach builds trust, and increases the likelihood that your customer is going to work with you proactively to resolve any issues. Look at what tools your collections team has available to them to implement a consistent, high-touch communication program with your customers, and use this second half of 2020 to cultivate and grow your loyal customer base.
  3. Deploy cloud-based automation to manage your AR process.  If you don’t already have a smart AR platform to manage your credit-to-cash process, then you’re feeling the pain of failing processes, inconsistent communication and unhappy employees quite keenly right about now. In a remote workforce environment, it is difficult for even your most technically adept AR specialists to log into multiple systems to find customer information, process invoices, process payments, and follow up on collections tasks. Not to mention sharing their information with other remote team members.  A smart, cloud-based AR system can solve multiple challenges for your business and your teams:
    1. Data from various siloes (CRM, ERP, billing software) can be aggregated into one location and accessed through easy-to-read dashboards
    2. Typically manual processes like data entry and standard customer communications can be automated, freeing up your AR team’s time from low-value, repetitive tasks
    3. A thoughtful collections process can be implemented and managed through a single system so all parties have access to the data and any updates in real time.
    4. Daily tasks for the AR team can be prioritized and managed through the centralized system
    5. A customer portal can allow customers to access their account records and pay their invoices on their time and schedule, not during your (potentially limited) business hours, which can accelerate your cash flow and make the experience far more pleasant for your customers.

Taking these three steps can have a huge impact on your cash flow and your AR efficiency, not to mention your customer relationships. The longer businesses wait to “see how things pan out”, the more they put their cash flow at risk. And the longer you wait, the more likely you are to be in a reactive position to your customers’ failing businesses, rather than in a thriving position to support the ones who figured out what you did: how to lead through uncertainty. 

We can’t predict the future of Covid-19, but we can predict your business’ future when you take smart steps to ensure your cash flow and your operational efficiency are in peak condition, no matter what the economy throws at you.

Nicole Dwyer
About the Author

Nicole Dwyer is Chief Product Officer for YayPay, bringing more than 10 years’ experience in accounts payable and receivable technology to ensure YayPay continues to meet the needs of its customers. Having spent her entire career in commercial payments, Nicole understands high- and low-value payment systems, the complexities of how businesses pay and get paid, and has worked with distributed teams spanning the globe. She is a graduate of Worcester Polytechnic Institute. Residing in New Hampshire with her husband, daughter, and son, they spend their time outdoors and creating new adventures.

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