How to Ease your Followup Pain
Are you one of those entrepreneurs who struggles to get the payments on time? If yes, this blog is for you!
Whether you are an SME or a freelancer, or a big company, one of the most important aspects of any business is the timely collection of payments. Timely payment is essential to keep your business rolling. It brings a lot of stability to your business and supports the business health.
However, irrespective of how much we dislike it, timely payments are a struggle for every company. As per a recent survey, 54% of businesses said it took too long to receive customer payments, and 77% said their clients did not pay on time.
Sometimes unpaid invoices can put companies in an inconvenient situation. While it is essential to maintain a strong relationship with clients, that relationship will not do much good if you are not getting paid on time.
6 Steps for Easy Payment Follow Up
- Clear Credit Policy
It is essential to clarify the credit policies to the clients. While it is ok for some industries to have 30 days credit policy, some enterprises prefer 90 days of credit. While in some circumstances, policy differs from client to client or product to product. Whatever it is, it should be communicated clearly while providing the service. The due date and other terms and conditions should be stated clearly in the invoice. Also, the credit policies vary from industry to industry.
- Customer Segmentation
Do the customer segmentation based on their payment terms under the heading due, overdue, and under due. It will help the organization clarify which customer needs a rigorous follow-up and which one needs a simple reminder. This will save a lot of time and energy. Such handy information about customers also requires proper maintenance of data.
- Multiple Payment Gateways
In this digital era where everything is happening online, and everything comes with two or more options, it is vital to have an option in payment mode. As per the recent survey, 37% of the companies have experienced faster payments by offering more than seven ways to accept payments like Paytm, BharatPe, NEFT, RTGS, Debit card, Credit card, etc. The more option you will provide to your clients for payments, the easier it will be to receive the payments on time. Also, various invoicing software available in the markets can help you on a larger scale.
Offering a discount on the payments before the due dates attract an instant amount. A small percentage discount before the payment of due date can be enticing enough for the clients to make the payment. In the same way, regularly informing the clients about the penalty on late fees will work wonders and fetch you timely payments. These two have proven to be the most effective ways to collect timely payments.
- Efficient Follow-upProcess
The sales team should be thoroughly trained in the follow-up process. An entrepreneur can’t keep a check on every client’s payment due. Here the salesperson should be given authority to provide discounts when needed. Also, several factors under the process, such as automated reminders for, e.g., overdue payment reminders or payment reminders before the due date, payment follow-up mails and messages, and polite payment reminders over an SMS, should be discussed based on their segmentation. Reminders, which are system driven, not taken negatively by customers compare to reminder made by person.
- Average Payment Collection Days
We can keep track of APCD and accordingly schedule the follow-up. Regular visibility of APCD Trends helps identify the gaps in payment collection. This gives a clear idea of which payment follow-up strategy to use for a client. The trend for APCD along, when looked at ahead with margin, helps the decision-maker make an insightful decision.
Timely payment is a struggle everyone faces. However, it is essential to get payments on time to keep the business in a healthy state of mind.
Following the simple steps discussed above can help you relieve your pain and get the payment on time.
Which of the above-discussed tricks are you going to imply in your system? Let me know in the below-given comment section.
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