COVID-19 related cashflow problems increasing outstanding invoices from customers, reveals Onguard
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New research conducted by FinTech Onguard has revealed that the COVID-19 pandemic has resulted in finance professionals dealing with an increase in outstanding invoices from customers. 65% of the respondents surveyed stated that cash flow problem was the most common reason for customers failing to pay on time.
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.”
35% of the finance professionals 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 daily. 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.
70% of the finance professionals stated that there is now a greater need for digital transformation due to the pandemic, with around 65% believing that the coronavirus crisis has accelerated any transformation that was already underway.
“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,” Onguard’s CEO concluded.
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