The business world has changed significantly in the matter of days. NACM Heartland members are reaching out asking a range of questions from whether others are experiencing customers already looking to extend terms to are there any tips about working from home. The bottom line: Right now it might feel a little lonely in the credit department, but you are not alone.
A webinar hosted by Blakeley, LLP is a reminder there a wide number of resources available to credit professionals. Their webinar “Collection Strategies in the Face of Coronavirus” touched on a number of topics that can help credit professionals think through not only collection strategies, but the extension of credit. Some takeaways:
- The federal government’s stimulus package isn’t going to impact us as quickly or exactly as we want. So, we as credit professionals are going to have different classifications of customers. Tier 1 might be those who are proactive and actively communicating. Another tier might be customers who were already in trouble and remain quiet. We need to create both credit and collection strategies around those tiers that are both short and long-term.
- Look at your portfolio and divide the delinquencies and invoices between Before Coronavirus and After Coronavirus. The date mentioned is March 13. Those on and before March 13 will be held to the existing credit policy and terms. Those after that date will likely have different terms and policies.
- Be as flexible with a customer as they are being to you.
- Force Majeure is a phrase that likely be used by a number of businesses struggling with reduced or lack of income streams. Essentially, this means the customer could not have foreseen the business disruption and isn’t responsible for the money owed to you. Most contracts don’t currently have this clause because this is a complicated concept. You will need to work with your attorneys to navigate these claims.
- A supplier pact is worth looking into as you look at new collection strategies. This is teaming up with other suppliers to find a pathway to payment with a shared client. It does not violate the Sherman Acts as it deals with collections and not terms of extending credit.
Click here to view the entire 30 minute presentation “Collection Strategies in the Face of Coronavirus.” The PowerPoint is available here. We appreciate Blakeley LLP for allowing us to provide NACM Heartland members with this link at no cost. This webinar was originally written and posted byNACM Heartland.