If you’re managing a business, you know that your customers and their consistent, planned payments are critical for your bottom line. Even so, while businesses are always evaluating their overall customer experience, oftentimes considering the customers’ payment experience only happens during periods of financial stress. However, it is always the right time to improve your customers’ payment experience – and here’s how to start.
Start by understanding your customers
Understanding your customers is the first step to improving the payment experience. What capabilities do they have? What is their preferred payment mechanism? Learning this information early in the sales process is key to making the experience positive for both sides, whether it’s a transactional sales process or a longer-term partnership between supplier and purchaser.
Dig in to your payment process
Reviewing and improving your payment process is the next step. This requires looking at: software; outsourcing of services; the actual steps in the process; and the personnel doing the work. Let’s take a closer look at those areas.
Software
While payment software used to focus specifically on paper payments, accounts receivable professionals and customers today are looking for a more engaging experience. Reviewing your software and making sure you’re using the most current technology is the first step in improving the payment process.
Outsourcing services
Service outsourcing has long been a mainstay of the receivables process. The lockbox product of the 1980s is still alive today in many companies, whether it is an internal department where checks are received, reviewed and processed, or an outsourced P.O. box supported by a service provider or financial institution. A typical lockbox can offer standardization and reliability, but it may not meet all your needs or the needs of your customers. Integrated solutions from a financial partner can improve this tried-and-true product by adding the ability to receive electronic payments.
Payment steps
A good way to review the steps in your payment process, and determine whether they work as intended, is through process engineering – in other words, watching what employees do and determining if it’s the best use of time. Doing this frequently allows you to make incremental changes and improvements. It also allows you to identify new requests and behaviors of customers. Often, process engineering can be done internally, but many organizations are available to provide consulting services.
Personnel
The final step is analyzing your personnel. Many companies are seeing turnover in their receivables departments, due to retirement, desire for change or lack of growth within the department. It is critical to keep them engaged in any process review to get support and feedback from those at the front lines of the work. When employees are engaged in the entire process, they take ownership and feel empowered to contribute to the company’s success.
Find your ideal state
The ideal state allows customers to easily make and schedule payments, and provides your business with reporting and alert messages when funds are received. Analyzing your payment process using the criteria noted above, and then regularly reviewing every year for updates, is critical to a successful, growing organization and can help you reach this ideal state. Internal and external education around any process changes is also critical, including instructions for customers on how to make payments. Doing all of this can give your bottom line a boost.