The Covid-19 pandemic has caused an increase in finance professionals dealing with outstanding invoices from customers, according to nearly half (48%) of respondents surveyed by fintech company, Onguard.
Cash flow problems were cited by nearly two-thirds (65%) as being the most common reason why customers are failing to pay on time. This represents an increase of 14% from February when just over half (51%) of invoices went unpaid due to cash flow concerns.
The additional pressures of the Covid-19 crisis have also led over a third of finance professionals (35%) to believe that their organisation lacks the specialist software required for efficient working, with more than half (55%) still relying on programs such as Excel and Numbers for their credit management on a daily basis. Only 35% use specialist credit management software to automate processes, with the remainder relying on ERP systems or not having a dedicated system for debtor management. This lack of technological support may be the reason why, despite mounting unpaid invoices, only 17% of finance professionals are applying a personal touch to these delicate customer issues by calling debtors personally to ensure payment on time.
With growing workloads to consider, it’s unsurprising that 70% of finance professionals believe there is now a greater need for digital transformation due to the pandemic. Meanwhile, almost two-thirds (65%) believe the coronavirus crisis has accelerated any transformation that was already underway.
Marieke Saeij, CEO, Onguard said: “It is striking that not even a fifth of finance professionals seek contact with customers who pay outstanding invoices too late or not at all, especially since cash flow problems are the main cause of customers defaulting on invoices. However, while these issues are often best solved with personal contact, we understand this isn’t always possible due to lack of time. Therefore, an efficient and automated debtor process would be beneficial.”
“We can see that there is a growing need for specialist software as a result of the coronavirus crisis. Software that automates processes and takes over repetitive tasks allow finance professionals more freedom for value-adding tasks, such as contacting customers directly in the event of non-payment. They can then get to the root cause of the non-payment, for example, the purchase number might not be stated on the invoice, or the customer might require a new agreement for a payment plan. By taking this more personal approach, the customer will feel understood and the chance of receiving payment will be much greater. In these uncertain times, understanding and showing empathy towards the customer is extremely important for building and maintaining longstanding relationships, even if a customer defaults on an invoice.”