The chill in the air reminds us that another school year is beginning. Winter will soon arrive and a return to business activities is upon us. With this return to business activities, what are the top economic factors? Covid infections are at the top of our list as a threat to economic recovery. Unfortunately, this is the biggest risk to business flows. The rise in the Delta variant infections threatens economic growth across almost every industry.
Global Hawk Resources strongly recommends to stay informed of infection rates in destination countries and supplier countries as well. The most important factor in the United States is state level actives. Broad lockdowns are not expected to be the key strategy any longer, but rather a focus on vaccination rate in hopes of reducing infection levels.
The good news is the global economy is in fast recovery mode. The challenges lie in limited supplies and raw goods for manufacturing as we move forward into the winter months. Seaborn shipping will continue to struggle with overflows in shipping. Containers and vessels are still the main shortages in this area. There is enough capacity to align with current demands, however there remains a challenge to get back to pre-pandemic flow of goods. Inflations of the new Delta variant will be the main focus as they continue to rise. This of course is fueled by a limited amount of raw goods as we move into the autumn, pre-holiday retail season. Large players will use their clout to make sure orders are fulfilled while smaller players will need to be creative to make sure orders are met.
Unambiguously, this will result in higher prices for the end consumer. The United States consumer prices will shoot up, and Europe will follow suit. Another key factor to keep in mind is labor shortages. These shortages will continue to rise as unemployment numbers shrink, thus again hurting the smaller players. Labor now has better options on employment choice and will chose larger companies with more security and better benefits. A positive aspect during is the large amount of cash savings in many businesses due to low operating costs over the time period of the pandemic.
Businesses need to be aware that these factors are on the way. We need to stay ready. Meaning, we need to insure that cash flow is secure as it is the life blood of any business. One predicator is for sure, we don’t always know what is coming as we have seen over the past 2 years, however we can insure better success by perusing past due accounts and creating process that protect receivables.
Summer is officially over, and days are starting to get shorter as we enter the final four months of 2021. Collecting on your over 90 aged receivables is becoming more and more crucial as your organization is looking to meet year end cash collection goals. Global Hawk Resources is here to help. As a vendor, we are strictly measured on how much we collect and pass back to our customers minus cents on the dollar.
Critical Data to Help Collect Your Companies Delinquent Receivables
Current Accounts: $1.00
3-months Overdue: $.70
6-months Overdue: $.50
1-year Overdue: $.23
2-years Overdue: $.10
** Survey Results provided by the Commercial Collection Agency Association (CCAA)
Past due receivables can severely impact the trajectory of a business. To fight this uphill battle a company must instate a strict policy when dealing with delinquencies. Creating an escalation process from both an internal and external standpoint cannot be overstated. Utilizing collection tools and analyzing weekly aging reports will highlight problem areas in your AR that need to be addressed and resolved. Businesses must draw a line in the sand when dealing with aged balances and be aware that as these debts age they will become harder and harder to collect.
Recent devastating world events have created substantial corporate disruption. Past notable incidents severely impacting day to day business include September 11, 2001 which destabilized global markets; Hurricane Sandy in 2012 which inflicted nearly $70 billion in damages; and the 2010 volcano in Iceland which restricted travel in Europe and interrupted the supply chain. These unpredictable events leave businesses in search of protection under contractual obligations with critical vendors. As credit and collection professionals this could lead to nonpayment disputes with regards to this clause if applicable.
The COVID-19 world health crisis has frozen commerce and left many businesses with a significant decrease in cash flow. Consequently the Force Majeure (Latin for Superior Force) clause is becoming more relevant. As a credit and collections team you should review all signed agreements to confirm this clause is in fact cited in your organizations terms & conditions.
A common legal clause in many agreements that permits your customers to restrict responsibility when exposed to some unexpected and extraordinary circumstances.
Taking a deeper dive into this leads on to determine what is defined as circumstantial events to invoke the clause. Standalone pandemics and epidemics do not have to be classified as force majeure event, but the consequences of such episodes (ex. port closures or suspension of transportation) severely impact the market and invoke this defense.
“A force majeure clause sets forth limited circumstances where a party may either terminate or not perform certain contractual duties without liability due to the occurrence of an unforeseen event. Whether this is a valid defense depends on the language of the clause-i.e. whether, or not, it specifically mentions a “pandemic” or “public health emergency”. Whether or not Covid-19 falls into such a clause would depend on the specific wording of same. You also have to look at any other specific requirements in the clause defining what is excused, the circumstances of same, notice requirements, etc. It is really contract specific as to whether or not such a clause applies. I’m sure there will be litigation over this in the future,” says John H. Bernstein, Esq.
In the middle of the COVID-19 health crisis, Global Hawk Resources does foresee an uptick with your customers invoking force majeure as a valid term of dispute. From a global perspective the Chinese government has issued an overwhelming amount of force majeure certificates since the pandemic began. Most of these claims will not hold up in English law as the provisions need to be far more specific. With this said we recommend reviewing your current contracts to determine if force majeure is cited in specific terms and to what length.
Founded in 2016, Global Hawk Resources is the worldwide leader in commercial credit and collection services. The company offers a wide range of products and services designed to optimize your organization’s bottom line.
Global Hawk Resources announces immediate availability of Base, enabling our firm to simply and securely accept Credit Card and ACH payment processing on behalf of our customers.
“We are always looking for process improvements. Partnering with Base allows our staff to secure credit card payments without having to go back to our clients. It cuts down on distortion and time to pay. This will subsequently increase our recovery rate across the board.” said Nick Morash, Co-Founder at Global Hawk Resources. “Global Hawk Resources’ commitment to deliver on our first-class debt recovery solution is highlighted with the addition of this payment option. Streamlining this thru Base and migrating it with our collection software adds a new advantage in this ever-changing third-party collection agency landscape.”
Founded in 2016, Global Hawk Resources is the worldwide leader in commercial debt recovery. The company offers a wide range of products and services designed to optimize your organization’s bottom line by recovering on receivables on average 60 days past terms.
Optimizing Cash Flow by Resolving Erroneous Payments
Global Hawk Resources announces a service to provide our clients a solution in tracking down double payments to their vendors. A major drain on the bottom line originates with duplicate payments.
“In a recent annual report, the US Government Accountability Office (GAO) disclosed 0.05% of invoices paid are payments made in error.” https://www.gao.gov
Does your organization have overpayments on account for accidentally paying the same invoice twice? Are you having issues recouping these losses? Global Hawk Resources is here to assist. Our trained staff will contact your customers to facilitate a refund on your behalf in a seamless and professional manner. Our white gloved approach will increase cash flow back into your organization and clean up open items on your balance sheet.
Founded in 2016, Global Hawk Resources is the worldwide leader in commercial credit and collection services. The company offers a wide range of products and services designed to optimize your organization’s bottom line.
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The chill in the air reminds us that another school year is beginning. Winter will soon arrive and a return to business activities is upon us. With this return to business activities, what are the top economic factors? Covid infections are at the top of our list as a threat to economic recovery. Unfortunately, this is the biggest risk to business flows. The rise in the Delta variant infections threatens economic growth across almost every industry.
