How Outstanding Debt Impacts Your Supply Chain - The Ripple Effect

Outstanding debt and overdue invoices can have quite an impact on your business. As an understanding business owner, you might try to be lenient by not pressuring your debtors too much when their accounts become overdue. This does, however, have a terrible ripple effect on your company. 

Affects Your Cash Flow 

Late payments will first affect your cash flow. When those payments don’t come in, you will need to start limiting company expenses. Operations will become tight-budget and your main priority will be to just survive the month or two until the funds start recovering. 

Effects on Marketing Campaigns

Marketing is usually one of the first things that companies cut down on when they are trying to keep heads above water. You will likely have to stop some paid online marketing campaigns and physical promotions might be placed on hold.
This can have quite an impact on your company’s ability to reach new audiences and will affect your ability to grow and expand. 

Affects Your Supply Chain

When the funds don’t come in, you might put supplies on pause and focus on selling or working with stock that is immediately available within your company. While this can be a good opportunity to focus on and clear out some old stock, it will eventually start affecting business conduct when you start running out of supplies. 

Affects Staff Payments

When the company starts to suffer, staff bonuses are usually cut or postponed. This can have a tremendous impact on your employee morale. When employees become negative, they won’t be able to work optimally within your company. Customer service can be affected and productivity levels will decline tremendously. 

In extreme cases, you might even need to withhold salaries which can result in a complete business standstill when employees start protesting. 

Impacts Your Sales

Cash Flow issues will affect your sales. As your stock levels decline, your sales will reduce and your store will look emptier and emptier. Those empty shelves can create a very negative image for your company and will cause some loyal customers to defect to other businesses. 

Sales will also be impacted when your employees are no longer productive or no longer strive to provide customers with quality service. 

Affects Your Companies Credit Score With Suppliers 

Cash flow issues can force your company to go into credit with suppliers. And if you are unable to pay this debt, you will get a negative credit score with your suppliers. This can make it hard for your business to keep operating and will affect your company long after your cash-flow issues have been solved since your business’s reputation will be tarnished.

How to Avoid The Ripple Effect of Outstanding Debt – Vic Collect

The only way to avoid this ripple effect is by getting your debtors to pay up as soon as possible. The very best way to accomplish this is with help from debt collectors like Vic Collect. The Vic Collect team is extremely skilled and more likely to recover outstanding debt in less time. Our professionals will take full control over all of your debtors and will do everything possible to get them to pay up while still maintaining a positive relationship with your company.

The best part about using debt collection services like Vic Collect is that it won’t worsen the burden on your company. We offer free collection services and only request a small percentage of the recovered funds. If no funds are recovered, Vic Collect won’t charge you anything. Thanks to this approach, your company’s financial position will only improve.

Give Vic Collect a call to find out more about our services or to get debtors to pay up so your company won’t have to suffer.