Almost half (48 per cent) of finance professionals have seen an increase in late payments since the start of the pandemic, a new survey has found.
According to fintech credit management specialist Onguard, 65 per cent of those surveyed said that cash flow issues are to blame for defaults – up from just 14 per cent who blamed cash flow issues for delayed payments in February, suggesting that the Covid crisis is to blame for the cash flow problems of these consumers and borrowers.
However, according to Onguard’s research, less than one fifth (17 per cent) will personally reach out to chase overdue payments.
Marieke Saeij (pictured), chief executive of Onguard, said that automated debtor processes would benefit financial professionals such as alternative lenders, as personally contacting defaulters can become time consuming.
“We can see that there is a growing need for specialist software as a result of the coronavirus crisis,” said Saejj.
“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.”
More than a third (35 per cent) of finance professionals said that their organisation lacks the software required for efficient working, while more than half (55 per cent) still rely on programmes such as Excel and Numbers for day-to-day credit management.