In March of 2020, countries all around the world were hit with a pandemic that has devastated the economy. From small mom-and-pop businesses to major corporations, everyone is feeling the impact. Companies are finding themselves unable to pay their vendors, leaving vendors in difficult payment collection situations.
With business slowing down and difficult financial decisions needing to be made, this can be a difficult time for business owners wanting to stay in good standing with their vendors. There is a path forward, and it starts with a few simple steps to maintain good standing with your vendor during tough financial circumstances.
Three simple steps to keep a good account with a vendor:
- Call the vendor right away. By calling the vendor, you can talk over the situation to see what type of payment plan or arrangement can be made. Vendors are almost always willing to make a payment plan.
- Pay what you can and continue to let your vendor know your progress. If payment cannot be made, call the vendor and let them know.
- When business opens back up, make larger payments to catch up your balance.
Vendors never want to get a collection agency involved. They always prefer to work directly with the client in resolving payment issues.
Example: A client was in a hot spot of the pandemic during the hardest time hit. The owner didn’t know what to do or how to pay his bills. His company was a one-man organization and had been struggling to get off the ground. A vendor called and emailed, but the client didn’t respond. One day the client finally took the vendor’s call. After discussing the situation, the vendor and client were able to work out a payment agreement that worked for both of them. The client appreciated what the vendor was willing to do, and he remains loyal to the vendor knowing that no matter how hard times get there is a company willing to build his business and help during difficult times.
Avoiding vendor calls and emails regarding accounts leaves a negative impact on the business. Respond to the emails or take the call!
Other ideas for keeping accounts paid on regular basis:
- Create a schedule of payments weekly
- Process checks once a week if possible
- Check the due date and request an extension
- See if the vendor offers discounts to making payments on time.
- Avoid interest charges or late fees. Ask the vendor to waive these during the difficult times.
The main key is to communicate with your vendor. Many businesses fear calling their vendors with problems. Don’t! Everyone is going through this together and we can only recover by helping one another. By communicating and maintaining a good relationship with your vendor, the light at the end of the tunnel gets brighter every day.