Business Advice

Getting Paid During a Recession

To protect your business and minimise the risk to your cash flow, follow these six steps to help ensure you get paid.


Cash flow is always essential for a business, but it’s even more critical during a recession. As the economy slows down, cash becomes scarce, and businesses may need help to get paid by their customers. To protect your company and improve cash flow, it’s essential to focus on reducing debtor days and taking proactive steps to ensure you get paid.

#1 – Enforce your Terms of Trade, but be mindful of the economic climate

Don’t change your expectations for payment, but also be cautious with your approach to avoid damaging your brand and reputation. Sticking to your terms of trade is crucial, but it is also essential to be mindful of the economic climate. Respecting and understanding your customer’s financial situation is vital, as many may struggle to make payments during a recession.

#2 – Triage your debtors

Consider each customer’s likely financial position; how impacted will their cash flow be in these times? Those most at risk need to be treated with empathy and flexibility. Prioritizing your debtors based on their likelihood of being impacted by the recession will help you manage your cash flow more effectively.

#3 – A phone call is likely the most appropriate contact method

An email may get missed or inadvertently deleted. Also, it’s hard to portray empathy in an email. A quick, polite phone call to your customer will be respected, allowing for better communication. It also enables you to ask them how they are doing and be understanding of their situation.

#4 – Offer flexibility

When you call customers with outstanding payments, ask how they are. Your initial assumptions may be wrong, and they may have been more impacted than you realize. Be respectful and kind in your positioning. If your customer is genuinely struggling, demanding payment within 48 hours may not be appropriate. Offer options such as spreading payments across the next 6-12 months, as this will help to increase the chances of getting paid.

#5 – Be direct, professional and empathetic

Offer severely impacted customers’ options to resolve their balance. Be honest and tell the customer you are calling to discuss their overdue account and offer them some options. Empathy, directness and professionalism are critical. Being professional, direct, and empathetic will help you maintain a good relationship with your customers, even if they struggle to make payments.

#6 – Reach an agreement, record the details and set a reminder

Having a proper record and reminder system will help you track payments and ensure you get paid on time. Once an agreement is reached, record the details and set reminders to follow up on the agreed payment dates. Be flexible and empathetic when following up if payments are not received.

In some cases, customers may not be able to make payments, and in these situations, it’s essential to weigh the potential brand damage of aggressive debt collection tactics.

To reduce debtor days and improve cash flow during a recession, it’s crucial to be empathetic, flexible, and professional when communicating with customers about overdue payments. We can also provide a Credit Management Guide to help you manage your accounts receivable and increase your chances of getting paid.

The key to success is to be proactive, flexible, and empathetic in reducing debtor days and improving cash flow, even during a recession.

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