How to Ease your Followup Pain

1. 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.

2. 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.

3. 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.

4. Discounts

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.

5. 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.

6. 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.