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.

POV – Happy Customers Pay on Time