You need a realistic view of your next income
One of the most important parts of your cash flow forecast is to have as realistic an income as possible, and to do this you will need to talk to your customers to understand how the pandemic is affecting them and whether they will be able to pay you. The main points to clarify with them are:
Are they in a situation where they will be able to make payments to suppliers?
How much will they be able to pay you?
On what date will they be able to pay? Will they be delayed? Days, weeks, months?
Do they plan to continue buying from you? Approximately how much and when?
You may not get all the information, but as long as they reveal their situation and some other points, this will help you to position the collection correctly in your forecasts and have a more realistic view of how much money your business will have in the coming months.
What to do if your customers’ situation is not as desired?
In case a customer is having difficulties due to COVID, as a last option you can consider offering a deferred payment plan, or even discounts, always making sure that this is in exchange for an exhaustive compliance with the new agreed conditions. In this way, you position yourself as a priority supplier for payment. Better a bird in the hand…
Once you have updated your customer collection forecasts, you will have a clearer view of your future cash flow , and when you will be able to pay your suppliers. Now it is time to call them.
