In times of high inflation, collecting on past due invoices can become increasingly difficult for accounts receivable departments. As the cost of goods and services rise, so too do the prices of the goods and services that a company has already sold but has yet to collect payment for. In this blog post, we will discuss some best practices for maintaining strong customer relationships and collecting invoices during times of high inflation.

First and foremost, it is important to have open and transparent communication with your customers. Let them know that you understand the challenges they may be facing with inflation and that you are willing to work with them to come up with a payment plan that works for both parties. This can include offering extended terms or flexible payment options. By being upfront and understanding, you can help build trust with your debtors and make it more likely that they will pay their invoices on time.

Another key strategy is to stay on top of your accounts receivable. This means regularly monitoring and following up on overdue invoices. It’s important to be persistent, but also understanding. High inflation can cause financial strain on businesses, and following up with a customer who is having trouble paying an invoice is much better than waiting for the customer to come to you. By being proactive, you can work with customers to find a solution that works for both parties.

Another effective strategy is to offer incentives for early payment. This could include a small discount on the invoice total for payment within a certain timeframe or offering a loyalty program for customers who consistently pay their invoices on time. Offering incentives can be a great way to encourage prompt payment and can help build strong relationships with your customers.

It’s also important to stay informed about any changes in the economy that may affect your accounts receivable. This could include changes in interest rates, inflation rates, or currency fluctuations. By staying informed, you can be proactive in managing your accounts receivable and make sure that you are taking the necessary steps to collect your invoices in a timely manner.

Finally, it’s important to have a solid collection process in place. This could include having a system for tracking and following up on overdue invoices, setting up automated reminder systems, or even outsourcing your collection efforts to a third-party agency. By having a solid process in place, you can make sure that you are collecting your invoices as effectively and efficiently as possible.

In conclusion, collecting invoices during times of high inflation can be challenging, but it’s not impossible. By building strong relationships with your customers, staying on top of your accounts receivable, offering incentives for early payment, staying informed about economic changes, and having a solid collection process in place, you can collect your invoices and maintain a healthy cash flow.