I recently gave a Webinar for companies that assist pharmaceutical companies with clinical drug trials. Many of these companies have unique contracts that call for quarterly or “threshold” payments. They have to wait until the end of the quarter to get paid, or until a certain thresholds have been reached. These companies are often much smaller than their clients, and cash flow has to be watched very carefully as payments are often sporadic.
Sometimes the a/p person doesn’t have the necessary approvals to pay. The Contract Administrator who can certify is on 6-week Medical Leave. Then, once approved, the client only runs checks once a month, and you just missed the cut-off.
Does this sound like your company’s situation? What can you do about it? The one thing I stressed during the Webinar was to proactively handle a/r as a Customer Service task. Don’t wait until 45 days after the payment is due to make a call. Start the process before the end of the quarter. Better yet, be in regular contact, but make it a Customer Service Call. “Is everything OK?” “Did you get the services you expected?” “What can I do to help?” It is in your best interest to preemptively remove any potential hurdles to payment, so when the time comes, everything is ready and you can get paid on time.