Last editedJul 20232 min read
Efficient payment processing is a cornerstone of any business, and it’s something that’s always changing as technology and customer demands evolve with the times.
The best way to ensure consistency in your payments is to streamline your payment procedures. This will not only improve the customer experience and foster stronger relationships but will improve your cash flow and reduce late payments.
But how should you be effectively streamlining your payment processing operations?
How to improve the payment process
Today, we’ll explore eight top tips to improve the payment process, focusing more specifically on online payment processing. These valuable tips should help businesses of all sizes optimise their payment processing systems and ensure smooth and consistent financial transactions.
1. Ask for a Deposit Upfront
By securing a partial payment at the beginning of a transaction or project, the customer is demonstrating a tangible commitment to your business and the likelihood of payment delays, or cancellations is reduced exponentially as a result. We appreciate that asking for money upfront can put some people off, however, so this might only be a viable tactic if you represent an established brand.
2. Send Prompt Bills
Timely and accurate billing is essential for encouraging prompt payment. Send invoices as promptly as possible, clearly outlining the payment due dates and any applicable late fees. Also, try to promptly address any billing discrepancies. By using payment processing software to automate this part of the process, you’ll save yourself a lot of hassle, but you must ensure the software in question is reliable before trusting it. Consider a trial run before taking the full plunge.
3. Make Payment Terms Easier
Nobody likes to feel confused but complex payment terms will confuse and alienate customers and that will often lead to delayed payments. Simplify your payment terms - clearly define due dates, specify preferred payment methods, and clearly outline any discounts or incentives for early payments. Keep the terms transparent, concise, and easily accessible to encourage prompt payments and everyone will be a lot happier.
4. Scrap Paper Invoices
Paper invoices are, frankly, irrelevant this far into the 21st century. Digital invoices reduce the chances of errors, improve record-keeping, in general, and are significantly faster (the difference between days and seconds). Digital invoicing software like Xero often offers features like automatic reminders and invoice tracking, saving time and effort for both you and your clients. And think of all the precious trees you’ll be saving by going paper free!
5. Incentivise Early Payments
Regardless of the size or sector, early payments are always appreciated and help keep a business running smoother. Offer incentives for early settlement that could include anything from providing a small discount to offering extra services or benefits to customers who pay before the due date.
6. Automate Follow-ups
Sending manual reminders for overdue payments can be time-consuming and inconsistent and sometimes, you might be as likely to forget as your customers. Automation tools can send timely payment reminders or follow-up emails to customers with outstanding balances, helping to maintain professionalism, consistency, and speed in your communication.
7. Provide Payment Plans
Offering flexible payment plans can be a win-win solution for both your business and your customers. By allowing customers to spread their payments, you make it easier for them to manage their finances while still guaranteeing a regular income for your business. This will also be welcomed by those struggling due to recent economic troubles. Just make sure you clearly communicate the terms and conditions of these payment plans to avoid misunderstandings and payment disputes.
8. Offer Plenty of Payment Options
Different customers have different preferences when it comes to payment methods. To accommodate a wider range of customers, provide multiple payment options such as credit/debit card payments, bank transfers, online payment gateways, and digital wallets.
We can help
With GoCardless in their corner, businesses can optimize their payment processing, enhance cash flow, and foster stronger relationships with customers.
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with.
GoCardless also uses a pull-based system to pull payments directly from user’s bank accounts, which means users get paid 47% faster and that cash flow issues are significantly less likely to occur.