Uncertainty creates opportunities, so long as you know how to make good decisions at the right time. That’s why OrderCast regularly analyzes challenges facing SMEs in order to propose ready-to-use solutions.
In the current context of rising costs and rising interest rates, the issue of liquidity is absolutely critical when it comes to business survival.
It’s now clear: 2022 has been a historic year in terms of rising costs. Still, rising costs aren’t necessarily what will kill off businesses that find themselves in a tough spot; instead, it will be a lack of liquidity.
The latest study out of Atradius shows the situation well: in the past 12 months, the number of sales made via credit has gone up by 48% for Western European distributors. Many Belgian businesses have confirmed the figure. One wholesaler told us recently that, “For some clients, payment delays have gone from 30 to 60 days; we’re also having to extend more credit.”
To help reduce the risks involved, here are three levers that can help protect you from late payments.
- Digitize your payment process. There are numerous applications available today that automate billing and track outstanding balances and credit. You can also propose an immediate payment made during the purchasing process, integrating into your bill or confirmation email a link to the online payment platform. Finally, you can automate your reminder messages sent as people approach their payment deadlines.
- Communicate clearly and transparently. A study by Intrum earlier this year showed that 61% of clients aren’t aware of the consequences stemming from their late payments. Don’t fear telling your clients that a liquidity crunch can impact your business. Start a discussion with those who are consistently late in paying: you’ll understand better why they do so and you can find solutions together. A little tip: if possible have these conversations orally, rather than via email or other written communication.
- Finally, to limit the risks of non-payment, certain situations could lend themselves to factoring. The cost of doing this is a bit high, but it can take a significant financial risk off your shoulders (not to mention freeing up the time spent in managing billing and reminders). You can also sign up for credit insurance and/or legal protection insurance. These exist in various forms; search around to find the solution that fits your needs.
Stick together through the tough times, and always remember that most SMEs exist thanks to their relationships with one another. Solidarity among businesses is one key to getting through this crisis.
Want to schedule an OrderCast demo for yourself? Get in touch and let us know a bit about your company and its needs.
At OrderCast we’re convinced that all B2B companies should have an easy-to-use, integrated and accessible online sales platform. That’s why we design ready-made solutions with no implementation costs, able to be up and running in a matter of days. Our cross-industry expertise and tools make us an essential partner for organizations that want to jump on the digital bandwagon. Find out more at ordercast.io.
