A collections process is essentially designed to make sure your customers pay you (on time). A great collections process does this and more; giving you an auditable, reportable view on exactly who owes you what, and how long that payment has been outstanding for.You shouldn’t count your chickens before they hatch, but you can (hopefully) rely on your payment system to foresee your company’s future metaphorical eggs, or payments.We have “boiled’ it down for you and created a list of 3 helpful tips to develop a great collections process:
1. E-Document everything
From rooms filled with disorganised files to just throwing something that resembles an important document into a cabinet - let’s just say there are multiple ways of documenting important conversations, contracts and payments.You generally only search for a document when you need it for something important, so why would you want to waste time searching amongst old coffee receipts when there are easy ways to ensure everything is kept organised, central and easily accessible:
- Keep it electronic - Keeping your documents in electronic format saves you time, space and trees.
- Keep it central - keeping everything in a single location assists everyone in saving time in searching for documents.
- Keep it up-to-date - an “afterthought” database can quickly become redundant and pointless; if no relevant information is kept, then those documents become a filing nightmare and will leaving you searching high and low when you probably don’t have the time to waste looking for them.
- Keep your customers trackable - The point of a payment system is to keep track of your customers’ payments to you; to see who is paying and if so, how far in payments and what amounts belongs to which customer.
- Automate - Have your backend processes assist you in keeping your business organised, trackable and up-to-date;An automated collection process does all the backend work for you, so you can focus on your business and taking care of you customers.
2. Communication is key
Good communication manages both your staff and customers’ expectations; if done correctly, it makes for a happy staff and satisfied customers. Through good communication, your staff will have a clear set of procedures to follow and they will know what is expected of them.Similarly, customers will understand what to expect from your staff and your company’s procedures such as monthly (or late) payments, breach of contract and how to contact your staff should a customer have questions.
- Be approachable - your staff will be more open to learning from you. Problems will be solved quicker, as staff will feel comfortable to ask if they need assistance rather than remaining stuck for a few days only to get it wrong anyway.
- Phone, Message, Email, Telepathy? - make it as easy as possible for your customers to contact you. If a customer has a question or problem with a payment, then having multiple lines of communication will make all the difference in getting the problem solved and directing your customer on their way to paying you promptly.
3. Make it easy for your customers
This spans from being reachable for questions from customers to invoices and statements that go out every month.
- Be Consistent - Be consistent in your invoice and statement template designs as well as the date on which you send out monthly statements.
- Have multiple payment options - Give your customers as many payment options as possible. This makes it easier and quicker for your client to pay your company.
- Keep it simple - Customers will feel more at ease with a company’s service/product if they understand the paperwork and protocols that go with your service/ product.
An effective collections process serves as a precaution for the safety of you and your company against any problems or legal inquiries in the future. At the end of the day having an organised, consistent and automated collections process benefits your customers, your staff and your sanity.
Reference source: Entrepreneur