Despite that it’s probably the worst thing Canada Post and its employees could do to themselves, a lockout is looming large.
For many businesses, the impacts will be crippling. If yours is one that still depends on the regular delivery of payments by mail, be prepared for cash flow to hit a brick wall. According to the Canadian Federation of Independent Businesses (CFIB), more than 98 percent of its members still use postal mail.
Many businesses, landlords and others who send invoices and accept payments by postal mail have been taking steps to prepare. But numerous others have been praying Canada Post and its employees would come to an agreement.
After all, neither the Canadian Union of Postal Workers (who have been without an official contract since January of 2016) nor the corporation can afford forcing customers to use alternatives to their service – the use of which has been shrinking at a rapid pace. Letter mail, once Canada Post’s bread and butter, is down 32 percent since 2006. With this lockout, the Canada Post Corporation will shed market share in its profitable parcel post business – much to the delight of competitors like FedEx and UPS.
That’s well and fine for the next mail disruption. But if your business is caught waiting for cheques to arrive by post, there are a few actions you should take.
Electronic Payment Options
Give your customers alternate means of paying you immediately or on the due date. These might include:
All these methods are quick and secure, but some have higher fees than others.
EFT is the gold standard for business-to-business payments. Once you’ve set up your customers in a system (available from all major banks), you can process and automate payments. Fees are often comparable to accepting cheques, although businesses with low transaction levels may pay more.
Insist on immediate replacement of any cheques stuck in the mail: this disruption did not happen without warning.
Interac eMail Money Transfer (e-transfer) has become increasingly popular for individuals and small businesses, because it is instant, secure and relatively inexpensive. Fees vary by the sending party’s financial institution and because there are usually payment caps, this method is currently best for smaller amounts. Like with EFTs, the fee is usually a flat rate per transaction, so it tends to be much less expensive than other methods.
Credit card processors normally charge from 2 to 3 percent, depending on transaction type and volume. PayPal and Stripe both take 2.93 percent.
And there’s no problem with good old cheques – just be sure they’re sent using anything but Canada Post.
What about payments that have been mailed?
Any payments that are in the Canada Post system when service stops will remain in limbo until it resumes. This can be a boon to debtors looking for an excuse to delay. Some may have genuinely sent payment by mail, while others will bluff that they have. There will be no way to tell until mail starts moving again. That could be a long time from now.
Whose responsibility is it?
In the vast majority of cases it remains entirely the payor’s duty to get payment to you on time. This is true in landlord-tenant relationships, where timely payment is always the tenant’s responsibility.
If a debtor claim the cheque is stuck in the postal mail, ensure them you will return or destroy any payments replaced by another method, and reinforce where the responsibility for timely payment falls: on their end. Insist on an immediate replacement: this mail disruption did not happen without warning.
Remind your customers of this important obligation, and offer nonetheless to pick up payment, use your courier service, or accept funds by an electronic payment method. This mail service disruption is a great motivator to put that direct deposit and electronic invoicing program into place. It was just a matter of time anyway!
If you encounter resistance, excuses or stall tactics, don’t back off and wait for the situation to worsen. It’s time to bring in your collection agency.
Call my team or me at 1-888-797-7727 or send us a note, and we will collect quickly for you. It’s what we do all day long, and we’ll get things moving again.