With all the economic challenges, our manufacturing partners have been seeing more late payments and unpaid invoices. Extended credit lines and delayed payment due dates benefit customers. Unfortunately, these accommodations make manufacturing cash flow challenges worse.
I’m seeing manufacturers pressured to extend payment dates out beyond 30 days to 60 or even 90 days. That’s a long time to carry debt on the books.
Manufacturers feel stuck between two competing goals:
What if you don’t have to choose?
Here’s how some companies are nurturing customer relationships while managing manufacturing cash flow challenges.
Companies we work with are increasingly embracing digital invoicing. When you automate invoice sending, you free employees to focus on customer relationship building.
Using incentives for early payment may feel friendlier than late payment penalties. Still, you can only carry debt for so long. Penalties may be necessary, depending on your customers’ payment behaviors. Whatever you choose, communicate it well!
Companies keeping on top of invoicing need a skilled representative managing accounts receivable. A detail-oriented staff member with great people skills will nurture customer relationships while protecting your cash flow status.
I hope these ideas help you sort through any cash flow challenges you may be facing. And, as always, I invite you to reach out with your own solutions. Connect with us on LinkedIn or Tweet us. We’re always happy to talk.
Image credit: Versapay.com