Point Of View Excerpts - “Happy customers pay on time”
Question: What is the impact of late paying customers?
Orr: Late-paying customers can have a dramatic effect on a firm's operational sustainability... Delayed receivables can equate to millions of dollars and a business may miss out on the opportunity to utilize these funds. This can harm a company that is already strapped for cash by impairing management of short-term obligations. Having a strong balance sheet, with cash available, allows a company to take advantage of buying opportunities, to complete short-term operation activities without issue, and to benefit from discounts resulting from the ability to pay upfront.
Sinha: Getting out of sync with a customer's payment cycle can further delay the receipt of expected funds. For example, if a customer only pays bills on the 1st of the month...the company may be waiting until the 3rd month to be paid.
Question: Which operational indicators suggest that an organization's cash flow troubles are related to customer satisfaction?
Sinha: It is important to take a view of the entire process which includes a review of supporting tools, policies, and procedures, including dispute management... A firm's philosophy and activities with respect to receivables management can constitute either an art or a science... Assessing where a firm stands will help guide the solutions that are administered.
CONTACT US
Please get in touch with us and one of our experts will be happy to answer your inquiry or set up a consultation.