For small businesses, collecting payment from customers can be a difficult task and gets even more complicated when payments are late or inevitably fail. In this scenario the business owner is forced to compromise customer relationships by engaging with external debt collection services to recoup lost revenue.
So, as a business owner, you might be asking yourself how you can prevent late payments and avoid debt collection? The painful act of chasing up a failed payment can often be avoided by using a subscription billing platform. Businesses using a subscription payments platform with automated failed payment handling can expect to see their collection rates increase, while becoming less dependent on external debt collection.
How do platforms such as this manage to make a difference to your bottom line? Here's how you can prevent late payments from customers & avoid debt collection.
One of the more effective ways of avoiding debt collection without compromising customer relationships is through payment flexibility. Making payments easy for your customers will significantly improve collection rates, leading to better cash flow. Offering your customers flexibility means giving them more options, in terms of payment methods and billing cycles.
Offering and keeping track of flexible arrangements can be difficult when processing payments manually, so finding a payment solution is essential. Before choosing a payment solution, it’s important to understand what payment methods and cycles your customers commonly use, so you can choose the right solution for your business.
Notifications and Support
Notifications are another simple but effective way to help increase collection rates. Notifying customers prior to billing can greatly improve the collection outcome, as it gives them time to ensure the funds are available. Notifications can also help when a payment fails. Depending on your preferences, this notification can also have a link to an online payment portal, to allow them to rectify the issue as soon as possible.
Failed Payment Handling
While offering payment flexibility and notifying customers prior to billing can help in maximising your collection rates, it’s inevitable that payments will fail from time to time. If this is handled manually, this often leads to an awkward conversation between you and the customer, trying to recover what is owed. The relationship can be further impacted if debt collectors are needed to help with recovering lost funds.
Finding a subscription billing platform which can automate your failed payment handling can help you avoid the need for external debt collection. By automatically re-trying the payment attempts, your company can discreetly recover the failed payment and ensure your customer relationship is maintained.
Having a good understanding of why your payments are failing can help you prevent it from happening in the future. When processing payments manually, you’re missing out on important data that can be used to improve collection rates. From understanding what payment methods are most successful, or even what days of the week yield the highest collection rate, analysing your payment data is critical for improving collection outcomes.
Using a payment solution will help to gather payment analytics and provide insights and an understanding of the reasons why payments are failing, so you can prevent them from happening in the future.
Ezypay’s subscription billing solution is designed to improve your business's payment collection outcomes so you can maximise your cash flow. Our solution can help your business improve collection outcomes by offering payment flexibility, pre-debit and failed payment customer notifications, and detailed payment reports and analytics. And by utilising Ezypay’s customisable and automated failed payment handling options, your business will have the tools to avoid external debt collection.