A Period of Adjustment

In these extraordinary times, the best way to work with financially strapped clients involves careful research and some flexibility.

BY C. ROBIN SZABO

WHEN WE FINALLY SAID good riddance to 2020, there was the hope that this year would usher in a period of nonstop recovery for individuals, businesses and the economy. With promising vaccines now available to the public, we remain optimistic that indicators of better health will begin to emerge. However, we also realize that true economic revival takes time.

Small businesses have been hit particularly hard, and many temporary closures have turned into permanent ones. Those that remain have limited, if any, money to spend on advertising. Budget cuts have crippled advertising agencies. Media companies have suffered significant drops in revenue. So what are credit and collection managers to do in this rare and troubling environment?

With advertising revenue down, it has become more critical than ever to bring in the money that is owed. While it’s essential to manage accounts receivable, who wants to increase the pain of businesses struggling to keep their doors open and their employees employed?

In times such as these, we simply cannot collect exactly the same way that we

did when the economy was booming. While the principles and objectives remain the same, we need to recognize the unique nature and size of the challenges each customer is facing as a result of the pandemic and refine our approach accordingly. Once those challenges are understood and a fair solution is reached, persistence must follow in order to collect successfully.

TEAM ENVIRONMENT

Now more than ever, strong teamwork among your collectors is essential. It’s likely that you and your team have been working remotely. Thankfully, technology affords us an array of communication options. Unfortunately, it does not take the place of human contact between team members. Maintaining a high level of performance should be foremost, and the best way to do this is to establish a “team” environment.

First, your staff must be adequately trained and technologically equipped at home to meet your organization’s standards. Second, team members must be given ample opportunities to interact with each other and with you.

Scheduling regular virtual staff meetings can give

OPTIMIZING YOUR PERFORMANCE

There are four key actions that will help you achieve the best possible outcomes with customers:

FOCUS – Remember the 80/20 rule: 80% of your business comes from 20% of your customers. Stay close to your biggest customers with consistent and frequent communications. Also focus on new customers and do the same. As time and resources permit, move on to those less critical to your bottom line. FLEXIBILITY — The more you know about what the customer is doing to make ends meet, the more flexible you can be in negotiating the debt. This is no time to be rigid, because you truly need each other. The key is to come up with a plan that both of you can live with while making it clear that it is a temporary fix for a temporary situation. Explain to the client that extending terms or creating a payment plan does not represent an alteration of your organization’s policy. Set clear expectations and document them. EMPATHY — No one is having much fun right now. Find subjects on which you can commiserate with your customer in a hopeful or lighthearted way. For example, you might talk about your preschoolers who started screaming at each other just as you entered a Zoom conference with the boss. Or perhaps the drawstring on your favorite pair of sweatpants isn’t long enough anymore. Anything that you might have in common suggests, truthfully, that we are all in this together. COMPARE — Analyze the credit lines of existing customers with their actual purchases. If the credit line far exceeds their purchasing history, you might consider dialing it back. Doing so will allow the customer to buy what it needs while reducing your risk. Chances are also good that the customer will prioritize payments to maintain its reasonable credit line.

everyone the opportunity to share ideas and concerns. And it can give you the opportunity to make sure procedures are followed and work standards are met. Additionally, team-message platforms and document sharing can contribute to a feeling of camaraderie and provide help to teammates with questions or problems. Sales representatives are under increased pressure right now. Digital and print publishers are Know if your rethinking the structure of their sales organizations to make sure they can respond more nimcustomer has applied bly to advertiser demands. The post-sales staff may be growing in areas such as ad operations, and/or received funds optimization and production. That trend began from government even prior to the pandemic. While this expansion has its advantages, it can also create crowded relief programs. lines of communication between customers and media, and also between departments in your organization. Talk to sales regularly about prospective and current customers. The sales rep is also more likely to discover problems that the customer may be having, which you need to be aware of. Both sales and credit should also carefully monitor the industries of customers and share this information with each other. Perhaps the representative is talking to the customer about additional marketing strategies to create new revenue streams, such as virtual events and drive-by or pickup services. Chances are good that the customer has had to explore ways to do business differently in order to stay afloat. You need to know of any changes to the customer’s business model and organization and keep tabs on the success of these new endeavors.

GOVERNMENT RELIEF

Know if your customer has applied and/or received funds from government relief programs. In late December, leadership in the U.S. House and Senate came to an agreement on the details of a $900 billion coronavirus relief bill, signed into law by President Trump. The bill extends and modifies several provisions first enacted in the CARES Act, the $2.2 trillion relief law passed in March 2020. The package extends relief for individuals and businesses through mid-March of 2021. The business provisions of the new law vary somewhat from the original legislation. For example, businesses receiving a new Paycheck Protection Program (PPP) loan will now be able to take the increased Employee Retention Tax Credit. Previously they were allowed to opt into one or the other, but not both. Qualifying expenses have also been expanded. They now include covered property damage, supplier costs and worker protection expenditures in addition to employee wages or operating expenses (such as rent and utilities). The employer-side Social Security payroll tax credits – created in the Families First Coronavirus Response Act to offset paid sick and family leave related to the coronavirus Continued on page 29