A report by the National Federation of Independent Business (NFIB) shows that 64% of small businesses are victims of unpaid invoices of a minimum of 60 days. Although this is not specific to the cannabis industry, it is a universal problem that cuts across the divide. Big cannabis companies are partakers too.
The issue with past-due receivables is that it can ruin customer relationships and paralyze your business. Even worse, the more you delay in the collection of your unpaid dues, the harder it becomes. Being an emerging industry, the cannabis collection process is in itself time-consuming and frustrating. In fact, it is not uncommon for small cannabis businessmen to write off past-due receivables. However, the alternative is worse.
If you have a few clients that are acting up and refusing to pay bills, do not sweat it. We have explained a step by step guide that explains how you can get your cash back.
- Create An Aging Report To Track The Accounts
First off, you need to do your homework and discover which specific accounts are past due. Additionally, establish the grace period of each of the accounts where you cannot take action. Then create an aging report that will help you track the status of payments for all your clients by time period and due amounts. By doing this, you will spot problems at the inception stage.
- Send Reminders
Once you have your neat record of past-due cannabis accounts, proceed to send reminder letters to every last customer. You might want to do this step before the payment is due but if it is past, there is no harm in asking your customers to honor their promises. The reason could be that they have overlooked it. Let the customer know that you are willing to discuss the way forward if there’s an issue on their end. You can do this via email or phone call as per your liking.
- Consider A Flexible Payment Plan
Chances are your client is aware of the unpaid invoice but just cannot pay the lump sum amount at once at the time. If this is the case, consider switching to an easier payment method that works in both your interests. When all is said and done, you would rather receive smaller amounts for a longer period of time than come out empty-handed.
- Send A Past-Due Notice
If polite reminder letters, emails, and courtesy calls do not seem to achieve much, it might be time to take a tough stance by sending past-due notices. Let them know that you are still open to discussing a payment plan and that silence would warrant a tougher action.
- Hire The Pros
By now, your client should have done the needful or at the very least, accord you a response. If not, consider hiring a collection agency to handle things from there. Sure, this will dig a hole in your pocket but the advantages outweigh the disadvantages.
The cannabis industry, like any other, is fast-paced. Cash-flow problems will only slow you down or worse, sink your business to the knees. After you have done your due diligence with regards to recovering past due cannabis and CBD accounts, let the pros give you a helping hand and get your business running smoothly once more.