Are You Making It Too Difficult for Customers to Pay on Time? How to Simplify the process?
Slow paying or non-paying customers are the bane of any business’s existence. Not only do outstanding invoices affect the bottom line, but the time and money you spend chasing down customers for payments could be better spent elsewhere.
In many cases, payment issues are due to customers. There are a million reasons that someone might not pay their bill, or even intend to pay their bill. However, one common reason for slow payments is that you don’t make it easy enough to do so. The fact is, we live in a digital world. Very few people want to go to the trouble of writing out a check and dropping it in the mailbox anymore.
In fact, about 80 percent of American households pay bills exclusively online, and many other counties around the world have actually abolished checks entirely. And while some people do still prefer to write checks, if that’s the only method of payment you will accept, it’s likely that you are getting payments much later than you would otherwise. Not to mention, the easier it is to pay you, the more conversions and sales you’ll see both on and offline.
Making It Easier for Customers to Pay
Offer multiple methods to pay. Requiring customers to pay via only a single method, whether that is check, credit card, PayPal, or some other means, is not only going to drive business away, but it’s also going to delay payments. You don’t have to offer every conceivable payment option, but giving a few will speed up the process.
Accept online payments. One way to discourage check payments — and satisfy your customers — is to offer online payments. Again, electronic payments are vastly preferred over other types, and when customers can pay via credit or debit card or instant bank transfer online within a matter of minutes, you’ll get paid sooner. MobilePay is another technology that’s quickly catching on; adding a mobile payment option to your website or offering it in your brick and mortar store will help get you paid and make more sales.
Offer automatic payments. For recurring expenses, many people prefer to set up automatic payments to avoid missing due dates. Give your customers the option of setting up a recurring payment that will withdraw the amount due on the date specified by the customer. Typically, customers either pay immediately upon receipt of the bill or on the due date, but either way, you’re more likely to get your money on time.
Don’t hide the payment portal. Some businesses offer online payments, but finding the payment portal is a bit like looking for a needle in a haystack. And once customers find it? They must jump through too many hoops to enter their account number, payment information, and more. Instead, keep it simple. If you send electronic invoices, include a link directly to the payment portal, and once customers log in, be sure that all the relevant information is already filled out. If the bill is a physical bill, include the web address that goes right to the payment area, not just your homepage. Just those simple steps can speed up the process for everyone.
Track customer payments. Most customers are consistent when it comes to paying. Those who pay early tend to always pay early, while late payers tend to be chronically late. Pay close attention to customer patterns, and reach out to those who tend to be late. You may wish to adjust payment terms, but a conversation about barriers to payment could present some new opportunities for your business to improve.
No matter how easy you make it for customers to pay, there will always be those who pay later than you would like or not at all. Consider offering incentives to those who pay on time or early; some businesses offer a discount on the total bill for payment in full, for instance, or a discount on a percentage rate or balance for every month that is paid on time. When you combine those incentives with an easy, streamlined payment process, you will spend less time chasing customers for money and more time running your business.
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