By Josie Online sales boomed in response to people remaining at home and not spending their money on travel or expensive clothes.
People have just begun to buy… unbelievable amounts of stuff.
It was not long before the ports that brought people from Asia and North America to their homes became more congested. Ships waited longer to get out of ports and again to get in.
Container freight companies doubled, then tripled rates, driving up costs and inflation. The port backlogs were often extended to days, weeks or even months.
Another 400-meter-long barge was then stuck sideways in Suez Canal. This had never happened before. It took a week and created a mess of 369 container ships which continues to delay shipping. The Suez Canal problem forced shipping to be rerouted across the globe, which increased the wait times at ports on either side of the ocean.
Businesses of all sizes were affected.
Nearly every business began to be affected by shortages and increased costs. According to Deloitte’s CFO Signals, supply disruptions caused an increase in costs of 5% or greater this year. 32% stated that sales were affected by shortages , delays or scarcity HTML1.
Local businesses are being attacked. Microbreweries paying more for cans and bottles to hold their product, if they are able to get them. Costs continue to rise and it can be hard for raw materials or ingredients to be found. Most small businesses have seen their margins shrink and are now facing painful consequences every time they try to increase prices.
Another growing problem is labour. Both in North America as well overseas, businesses are faced with major challenges such as talent shortages, recruitment and retention, employee burnout, morale, possible delays in returning work, and rising salaries.
Canada’s most important port, the Port of Vancouver has been shut down. This was after the worst ever storm, in which virtually all eastbound lines were destroyed and buried under landslides.
There are so many disasters still sweeping the globe, and you need to understand how it will impact your business – regardless of which sector you work in. Customers in the upper ranks are finding it difficult to access materials and staff. In fact, they are spending much more than anticipated. Their customers have difficulty making ends satisfy. The situation looks dire, regardless of whether you look up or down.
What does it all mean?
This blog post will likely show slower than normal receivables.
It’s a good opportunity to think about the risks and exercise the power that you have. Here are three important actions you must take immediately:
- Do not ignore accounts that are slightly late. This is especially true if your company is small. Customers are more likely to make demands of you. For a customer to pay you back, they need you to be the most aggressive. You are competing against payroll, secured creditors (CRA), the bank, and other bigger players.
- If you encounter further delays or see warning signs like stall techniques, report the account to your collection company immediately and no later that 60 day past due. Don’t fall into the trap of waiting, or succumb to false optimism.
- If you don’t have clear policies on when and how to send accounts back to collections, create them. It is extremely effective to confidently state “it’s our Policy” when telling customers you will take steps on a specified day if the payment is not received in its entirety.
It is important to make sure your business is a top-paying priority during times like these.
The best thing about this is that customers and policies can be updated. Don’t mess with me, and you’ll be more resilient to the storm. I also promise that you will have better-paying customers long-term.
It makes your company more powerful and profitable.