5 Proven Ways To Streamline Your Collections Process
5 Proven Ways To Streamline Your Collections Process
Payment processing is an integral component of running a business, and yet many companies continue to struggle with tracking payments and collecting them efficiently. Many modern businesses are still burdened by inefficient, outdated methods for collecting payments.
A streamlined automation solution for accounts receivables cuts down on the time needed for manual processing, freeing up accounting staff to focus on higher priorities. Automating the payment cycle and managing payments efficiently can reduce input errors, missed opportunities for upselling, and a disorganized payment process. This helps businesses avoid overdraft fees and penalties and allows them to remain compliant with banking and federal agency rules.
We will walk you through the steps to prevent collection issues and get you paid faster. We’re making it simple, so you can focus on growing your business.
1. Maintain up-to-date customer information
Making sure your customer information is accurate ensures timely payments, which is the foundation of your business. The first step in ensuring accurate customer data is to store all your customer data records in one place. Auditing customer data ensures that your Accounts Receivable and Master Data Management processes are running smoothly.
Incorrect data can also lead to missing information, lost payments, and disgruntled customers. Make sure you have the following information on file for each customer:
Accurate customer contact and account payable information (name, phone number, email address) to ensure you can send invoices to the correct contact
Information on customer contracts
Carry critical information on all invoices sent to the customer
Customer payment terms, discounts, and credit limits
Customer special instructions to be referenced on the invoices
2. Set clear payment terms
Setting payment terms in advance is a simple, yet effective way to prevent invoicing problems, payment disputes, and late payments.
You should document all the agreed payment terms in writing and sign off on them before doing any business. This can serve as a legally binding record that you have a right to enforce.
If both parties are clear on all aspects of the deal, there will be no problems down the road. Here are some things to include in your payment policy:
Payment methods accepted
Consequences of late payment including fees and interest charges, and
Rewards if any for early payment
3. Offer multiple payment methods
There are numerous payment options you can use to collect payments from your customers. The type of payment you accept will be dependent on your business and customer base.
Business owners of all types and sizes should be thinking about the best ways for customers to pay them. And, what would be the best for your business? With so many payment methods out there, you'll want to consider what your customers prefer. Make it easier for customers to pay you by offering multiple payment methods. A recurring billing provider like LogiSense can help ensure that your business is accepting payments based on your customers' preferences.
4. Ensure accurate invoicing
Your customers want clarity about what they are paying for, so your invoices should be easy to understand. It should also include the details of their usage and billing clearly to avoid any disputes that cause delays in payments. You should also ensure there are no invoicing errors and missing information to make the process as seamless as possible.
Make sure you include the following information in your invoice to ensure you get paid on time:
Itemized list of invoiced items
Bill due date
Usage/ Consumption Summary
Payment method accepted
Remittance advice and other relevant information you customer will need (like PO number) on the invoice for quick references
Late penalty if any
Date when they will be billed next
5. Automate collections process
Eliminate the stress and time spent in the collections process by switching to automated billing software. Often businesses spend countless hours and resources on tedious, manual tasks related to billing which can be easily reduced by optimizing and automating the invoicing process. Sending out invoices manually is time-consuming and prone to errors. Customers could miss a bill due date and it becomes difficult to track delinquent payments manually.
Automated billing software saves you time by calculating, processing, and sending out invoices automatically. It also lets you schedule automated billing reminders, allows your customers to view their statements via a customer portal, and sends timely notifications reminding them of making the payments on time.
Automating your collections process will allow your finance team to quickly and accurately identify which accounts have late payments, efficiently notify the appropriate departments, and redirect your team’s time and attention where it is needed.
In the current competitive business atmosphere, getting payments from your clients on time is critical to your business’s financial health. That, in turn, is critical to your business remaining viable and making the investments required for growth. Therefore, streamlining accounts receivable, by setting up a proper system and welcoming clients to adhere to it, is essential to ensure that overdue accounts do not build up and put a serious dent in your bottom line.
If you’re unsure if your accounts receivable management practices are up to par, then it’s probably time to speak to a billing expert that can help you answer your questions. At LogiSense, we focus on empowering businesses to realize revenue growth, providing positive experiences for customers, and simplifying the collections process.
About the Author
Sunny Wu /
As VP of Finance, Sunny Wu is responsible for managing overall finance and accounting operations, financial reporting, strategic planning and analysis, process improvement, as well as risk management and internal control. Sunny is a driven and passionate individual. She strives for excellence through ensuring the occurrence of growth and change, while balancing the needs of LogiSense’s shareholders, business partners, clients, and employees.