What inventory do you have on-hand to meet the orders?.What are your vendors able to provide for your production?.Compare and coordinate the information between: Use this information in conjunction with the current business situation. What is the purchase velocity expected per week? What is the needed delivery frequency?. Is this an ongoing customer? Will they be able to place orders in the next two to three weeks? Will they be able to place orders in the next 13 weeks?. Now for the payment decision-making process, ask these questions and include the information in your Accounts Receivable Planning and Management Tool. Historic payment practices for each customer – weekly, monthly, on due date, paid at 30 days, etc.Existing payment terms with the customer – from the purchase orders or invoices.Accounts receivable aging information – total dollars owed by aging category.Current customer contact information – name, title, phone number, email address.We recommend that a company reviews its accounts receivable with emphasis on developing the spreadsheet tool to address the following: Develop your Accounts Receivable Planning and Management Tool. Plan your cash receipts on a weekly basis. Explain you need assistance in helping to anticipate their needs, and you need a plan to receive cash to protect your ability to be there for them after the return to business.What is the customer seeing happening in the next two weeks? What do they anticipate in the 13 weeks?.What is the customer’s current level of your product in their inventory? When will they need product again?.Assure customers that your company is responding to the COVID-19 situation, and will be able to fill customer needs as long as a plan to work together regarding cash payments is created.Provide a road map for your staff to use in making these outgoing collection calls. How do you help your finance and accounting staff, or your sales and marketing staff, deal with collections calls they have to make to customers? At the same time, you need to maintain business relationships to keep the flow of information and the flow of cash coming. The management of accounts receivable during the phased return to the new normal is a delicate balance of maintaining customer relationships and maintaining cash flow for survival.Ĭollecting cash is going to be extremely important during this time period, to ensure your company’s ability to continue to operate after business returns.
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