Dealing with late payments can be a significant source of frustration for businesses. It's never enjoyable to have to follow up with customers for payment, but it's an unavoidable aspect of running a business. Today, 87% of businesses report that they are typically paid late. With late payments impacting so many businesses, it’s important for business leaders to put cost-effective measures in place to help improve credit management and reduce late payments.
Fortunately, technology has come to the rescue, and automation can help you tackle late payments in a more proactive and efficient manner. In this blog post, Chaser will share three ways automation can help you get paid faster and reduce the frustration that comes with late payments.
Traditionally, businesses have relied on manual follow-up of invoices to ensure payment is received. This can be a time-consuming and frustrating process, especially when you’re dealing with multiple customers and multiple invoices. Chaser’s research has shown that it takes an average of 2.6 payment reminders to get an invoice paid. This means that if you’re doing this manually for every customer, it can present a significant time cost to your business.
Automating the follow-up process through scheduled payment reminders and messages can make a huge difference. You can take a more proactive approach to late payments, reminding customers before the invoice is due and reducing the likelihood of payments being late in the first place. Automated follow-up messages can also help you be more consistent in your follow-up efforts, reducing the chances of a payment slipping through the cracks.
Managing accounts receivables manually can also lead to businesses taking more of a ‘reactive’ approach to late payments. Whereas really this should be proactive, getting out ahead of late payments and reminding customers before the invoice is due.
One of the biggest advantages of automation is the ability to get paid faster. Research has shown that businesses that use accounts receivable (AR) automation are three times more likely to get paid before their invoice due date.
By using receivables automation tools that include a payment portal, you can also link customers to a dedicated payment portal within payment reminder messages, making it easier and faster for them to make payments. The payment portal allows customers to pay instantly, via their chosen payment method. Chaser’s payment portal also provides a summary of all paid and due invoices, so you and your customer are always on the same page about what’s due and when. This not only makes the payment process quicker but also provides you with the reassurance that payment has been received and cleared, reducing the chances of disputes and queries.
Another advantage of automation is the ability to understand your customers and their payment behaviour better. Automated systems provide you with better visibility over debtors and their behaviour, which can help you identify any patterns or issues and address them proactively.
For example, if you notice that a particular customer is consistently late with their payments, you can take steps to address the issue before it becomes a problem. This could involve having a conversation with the customer to discuss their payment behaviour and to work out a solution that works for both parties.
In conclusion, automation can play a significant role in helping businesses tackle late payments. With the help of accounts receivables automation tools, like Chaser, businesses can take a more proactive approach to late payments, get paid faster, and have better visibility over debtors and their behaviour. By automating manual processes and making it easier for customers to pay, you can reduce the frustration that comes with late payments and ensure your business’s cash flow remains healthy.
Reduce late payments today with a 14-day free trial of Chaser’s receivables automation software.