Cash flow concerns bite into food suppliers' business

Seven out of 10 foods suppliers say their cash flow has been negatively affected by the coronavirus pandemic, with many saying payments are down significantly. 

A survey commissioned by the Malta Association of Credit Management found that a quarter of negatively affected members had missed out on anything between 60 and 80 per cent of payments due. 

Some 28 per cent collected between 40 and 60 per cent less while 36 per cent said they failed to collect between 20 and 40 per cent compared to what they used to collect before the pandemic. 

A mere three per cent of respondents said that had not tried to collect money from their customers. 

Survey respondents said they mostly sought payment via email (over 60 per cent) while calls were also a popular option, with over half opting for this method to get in touch with customers.

The survey also revealed that only 20 per cent of the respondents offered incentives to encourage their customers to pay their dues. These offered customers extended credit terms or discounts on cash sales. 

“When offered, these payment incentives were generally appreciated by customers and MACM Members who offered such incentives said that they were successful in collecting their dues or reached a satisfactory agreement with customers,” the association said. 

An estimated 56 per cent of the members applied for financial assistance offered by the government.

While the majority of the respondents have not taken any action against those not paying their dues, seven per cent said they intend to take legal action in the future if their customers continued to refuse to pay their dues. 

The survey was carried out between May 4 and May 9.