Bills loom large, and the Economy hangs on.
Read our tips here for doing our collective best for the economy in the current crisis.
With businesses and personal finances hit hard by a loss of income, the first of the month may mean triage in deciding what to pay.
As a typical “black swan” event, COVID-19 took the world by complete surprise. The focus of most businesses is now on protecting employees, understanding the risks to their business, and managing the supply chain disruptions caused by the efforts to contain the spread of COVID-19.
The full impact of this epidemic on businesses and supply chains is still unknown, with the most optimistic forecasts predicting that normalcy in China may return by April,1 with a full global recovery lagging depending on how other geographies are ultimately affected by the virus.
However, one thing is certain: this event will have global economic and financial ramifications that will be felt throughout global supply chains, from raw materials to finished products.
NSN provides a critical connection to family, friends, loved ones and essential services such as first responders, healthcare, government agencies and schools.
We understand that during this time, your business will be reassessing essential services and implementing extreme austerity measures.
A common practice is to restrict all usage-based costs, which in your case may be Telecoms. It is important to note that Telecoms has been classified as an essential service and is considered part of critical national infrastructure.
While we encourage you to make the best decision for your business, we ask that you consider the effect not paying your telecom bill on time will cause.
Why Paying On Time Makes Sense
Business continuity planning is the process of creating systems of prevention and recovery to deal with potential threats to a company. In addition to prevention, the goal is to enable ongoing operations before and during execution of disaster recovery.
Telephony, connectivity services and collaboration tools are vital for business to keep operating. There are currently no alternative methods that are viable in the long run to keep you connected with employees, consultants, customers, vendors etc.
NSN are doing our best during this time to support you but in order to do so we rely on your payments to fund our operations so that we can continue to keep you connected.
In this modern day and age, businesses can see out this tough time, but only if they employ strict contingency measures and focus on having open lines of communication between stakeholders.
Saving Your Good Name
The cost of paying on time is low as compared to almost anything else you can do to maintain a good reputation in your business community. When you pay late, you kick your cash problem down the road a few months at great cost to your credibility, something that is crucial to preserve in tough economic times.
To survive, your business will eventually have to pay its debts, so by putting them off a few months you gain nothing but risk losing your good reputation.
Ensuring Excellent Future Service
Every working day, you (and every other small entrepreneur on Earth) form judgments about the businesses you meet, judgments that are particularly crucial at a time when many businesses are in financial trouble. For example, you likely have thoughts like these on a regular basis:
- Business A produces a reliable product.
- Business B’s employees can be relied on to show up when they say they will and work overtime if that’s what it takes to finish a job.
- Business C constantly comes up with new and innovative services that frequently anticipate our needs.
- Business D always seems to be understaffed by surly employees who never return phone calls.
- The owner of Business E is great, but some of his younger employees are not properly trained.
- Damn Business F. Another day is here, and its check isn’t.
When these thoughts run through your head, you’ll doubtless question whether you ever want to deal with business D, E, or F again. And if you had to choose one of these less-than-stellar outfits to head your blacklist, we bet it would be Business F. That just makes good sense. Tough as it is to cope with late deliveries, unreturned phone calls, inexperienced workers, or even poor-quality products or services, it’s far harder to survive without being paid. This is doubly true for a business in a field where payment isn’t due until after goods or services are provided. Here, if payments are substantially late, a business can fail even though its bottom line shows it to be profitable.
You want to be a company that other companies want to do business with. For example, if your business suddenly needs to ask a print shop to turn around a flyer in a few hours, you’ll have a much better chance of getting them to say yes if you paid your last bill the day it was due.
Encouraging People in Your Network to Recommend Your Business
Keep in mind that it’s not just your satisfied customers (people who pay you money) who tell others about your business. All the people who work for and with you can also be powerful recommenders. This includes everyone you cut a check to, from your landlord and insurance broker.
If they feel positive about your business—something that is greatly aided when you pay their bills promptly—each can become a significant marketing ally.
Building and Keeping a Positive Credit Profile
If your business is new and tiny, you might assume the rest of the commercial world doesn’t even know you exist. Not so.
Almost from day one your small business will leave tracks in the commercial sands. For example, if you incorporate, form a business, hire employees, or apply for a bank loan, credit card, or trade credit, you’ll quickly appear on the radar screen of data collection organizations. These outfits gather and sell credit information about virtually every business. Among other things, they note what your business does, how many employees it has, who owns it, and, probably most important, its credit and bill-paying history.
In short, your bill-paying profile is available to anyone who pays a modest fee.
Who would buy such a report? Especially when economic times are tough and many businesses are losing money, the answer is: Virtually all of your creditors and potential creditors, including banks that are considering lending you money, companies reviewing your application to lease equipment, and suppliers, wholesalers, and other businesses from which you have requested credit.
True, an excellent payment record alone won’t guarantee that you’ll receive a bundle of commercial credit or a particular loan; other information is also important. But if a data collection agency reports that you habitually pay late, your credit application is sure to raise a red flag and greatly increase the likelihood that you’ll have to pay cash up front.
Getting a Payment Cushion
Paying on time acts as an effective rainy-day fund if and when you face a serious reverse like losing a major client, having a horrible sales month, or dealing with the bankruptcy of someone who owes you a lot of money.
That’s because in case of emergency, you’ll have a payment cushion of several months: If you’ve paid promptly over the years, you’ll have built up a substantial reservoir of goodwill and respect with creditors. They are likely to support you when you can’t pay on time if you can show them a convincing plan to solve your temporary cash problem.
What To Do When You Must Pay Late
Sometimes, despite your best efforts, you might not be able to pay all your bills on time. For example, you might be forced to delay some bills a month or two while you deal with a one-time problem like a lost line of credit, a tax lien, closing a money-losing part of your business, or most prominently, the COVID-19 pandemic.
In this situation, your best strategy can be stated in three words:
communicate, communicate, communicate!
Don’t wait until you receive a third demand letter to talk to the people whose check is not in the mail; pick up the phone as soon as you know you have a problem. Talk to the person who has real authority to manage accounts receivable to briefly explain what the problem is, how you’re solving it, and when you expect to be able to pay. If you can make an immediate partial payment, even a small one, it’s absolutely essential that you do so. As the old saying goes, it always pays to put your money where your mouth is.
Lastly, it is imperative to keep paying essentials such as telephony, connectivity and whatever software and hardware you need to be able to communicate.
Help us keep the lines of communication open, so that we may enable you to focus on getting your business through this challenging time.
Are you still making manual payments? Get in touch with firstname.lastname@example.org today for a direct debit form and waive the £5 admin fee!
If in the future, there are options for us to be able to draw down services from any of the other major carriers and suppliers that we deal with at a reduced cost as a result of the COVID-19 pandemic, we will of course look to pass this support directly through to you. To help us understand the payment/financial help you require, please submit a Financial Help Application.