Customer payments are the oil that keeps your business running smoothly. The moment you run into roadblocks in accounts receivable, your cash flow is in jeopardy. And as all business savvy entrepreneurs know, poor cash flow can easily derail a profitable business. One way to prevent a cash flow crisis from jeopardizing your business is to improve your payment processing procedures.
Too many business owners pay very little attention to accounts receivable. They chase sales and work hard at building a brand but put no effort into ensuring it’s easy for customers to buy goods or pay an invoice. By removing barriers, you immediately improve the customer’s experience, and in turn, speed up the cash flow running through the business. It’s a no-brainer.
Have an Accounts Receivable Department
It makes sense to have a person or department dedicated to accounts receivable. Customers will appreciate having a point of contact when they have a problem or question. It also makes life easier when tracking down payments without any remittance details or dealing with different income streams. Integrated receivable solutions can help resolve many of these issues, but it still helps to have a dedicated team dealing with all accounts receivable.
Streamline Your Payments Process
The more hoops a customer has to jump through to make a purchase or pay an invoice, the longer it will take and the more likely they are to walk away. If you run an e-commerce store, analyze your payments process. How many steps are there? Is the customer redirected to external payment processors?
Keep it simple. Try and reduce the payment process to three steps or less. If possible, avoid redirecting the customer to a third-party payment processor as they are more likely to abandon the sale. You want to encourage the customer to continue shopping and this is not the best way to do that.
Offer as Many Payment Options as Possible
These days, customers want as many payment options as possible. Debit card and credit card payments should be offered as standard, but try to include other options too. If you are willing to accept some of the less well-known payment options, e-checks, click-to-pay invoicing, or recurring payments, you will attract more customers.
This applies to bricks and mortar businesses as well as online stores. These days, customers expect to see Apple Pay, Google Wallet, and contactless terminals when they shop in the real world or buy a pizza. If you are a cash or card only business, you need to evolve with the times.
If you really want to take it to the next level, consider accepting cryptocurrency payments.
Keep on Top of Non-Payments
Always chase debtors the moment their accounts fall overdue. This is where an efficient accounts receivable team comes in really handy. Minimizing the time that it takes for payments to hit your account maximizes your cash flow. Ideally, set up an automated system that generates reminder letters or emails as soon as an account falls overdue.
Lastly, make sure your payment system is cutting-edge. Otherwise, you might be left behind.