One thing is for certain. We read about it every day, in all fields: tomorrow’s world will not be that of today. Tomorrow, everything will be more thoughtful, reasoned, “slower”. In the field of cash management, there are good reasons to apply these precepts now.
Now that most companies have reorganized (as much as possible) to absorb the crisis, it’s easy to forget that a fortnight ago, most of them were still in what could be called the ‘problem solving’ phase. For many it was necessary to digitize at lightning pace, in order to safeguard productivity as much as possible. At that precise moment, heads were still turned towards the world of the past, and many strategies were poorly adapted to the challenges.
Anticipate the next move
We have now entered a phase of resilience: organisations are have restructured, the teams have found their cruising speed, and the companies will seek to perpetuate this new organization. But, fortunately, it is undeniable that we will emerge from this crisis one day or another, and that we will enter a new work environment, which is difficult to anticipate.
The most agile, far-sighted organizations, with the most meticulously prepared and timed continuity plans, are already in the next round. In this economic game of chess, the ability to anticipate the future is key. If there is one thing we learn from crises, it is the virtue of anticipation.
What state will we be in, into what environment will we evolve? It is impossible today to answer these questions with certainty, and definitely not universally, given the huge disparities between industries. On the other hand, it is essential to start planting the seeds of success by adopting a long-term vision, and an adapted posture.
Slow down, understand, negotiate
Let’s start by taking the time to better observe, listen and negotiate.
The companies best suited to the present situation have embraced the care philosophy. They wish to bring a message of support and backing to their partners. The urgent need is to understand customers in detail in order to adapt their recovery strategy… or even to put it on hold.
“We pay large amounts by cheque only, but we are unable to obtain the required signature…”
If a partner reports a problem, it is essential for the credit manager to adapt his or her response. Rather than being urgent, the first objective should be to understand, possibly suggest solutions and plan: “Do you have the possibility of adapting your process? Have you started discussions with your bank to switch to another payment method? And if so, by when?”
For example, embarking on a campaign to collect invoices older than 90 days is probably not the right approach! On the contrary, a winning strategy is based on a systematic negotiation approach, and the creation of adapted payment schedules in order to quickly secure the cash that can be collected.
Similarly, in a negotiated approach, it is essential, until further notice, to set aside the resolution of disputes. Temporarily putting the collection of a disputed invoice on hold is another way of taking into account the customer’s problems, who will be more inclined to consider the possibility of other payments.
Virtues of the phone
Tactically, the most efficient teams have reinforced their outbound telephone contact activity.
This may seem paradoxical in a world where digital seems to be a one-size-fits-all solution. It is undeniable that digitalization saves time and gives autonomy. At Sidetrade, for example, the digital letter perfectly meets this objective. The platform automatically triggers the sending of an interactive digital letter via email, which is a relief for the credit manager. From the digital letter, the customer can connect to and view the status of his or her invoices and fill-in payment information at will.
However, at a time when mailboxes are overflowing and generic messages are piling up, maybe it is time to pick up the phone again!
This method offers a smaller coverage capacity, which means that customers must be segmented even more finely, be more qualitative, establish tailor-made strategies in order to uncover pockets of available cash and optimize results even more intelligently.
If you’re fortunate to have automation and AI like Sidetrade, you can set that system to work on the bulk of customers who might be more straightforward to process.
But the first virtue of the outgoing telephone call is that it allows us to maintain proximity to customers. Understanding how the customer is organized, what his or her challenges are, and gathering as much information as possible is the most rational way to approach collections today.
Understanding and empathy allow one to answer what should be the N°1 concern of all cash collectors: Maintaining the link with the customer, at all costs, to prepare for… the world after!