Unless a business is one that can become a completely digital business, there are several steps that can be taken to significantly increase the amount and speed of customer payments while at the same time increasing customer satisfaction.
SAN FRANCISCO (PRWEB)
November 29, 2017
For many small and midsized companies, collecting cash on a timely basis from customers is one of the greatest challenges to the success of a company. It is often a delicate balance between maintaining good customer relationships while letting customers know that the success and continuity of the business is dependent upon getting paid in a timely fashion.
Online businesses have an advantage over traditional businesses in that payment is almost always received via credit card, PayPal, or other electronic payment methods before delivery of the goods or services.
Unless a business is one that can become a completely digital business, there are several steps that can be taken to significantly increase the amount and speed of customer payments while at the same time increasing customer satisfaction. In essence, by embracing newly developed technologies and strategies in customer “order to cash” processes, any business can emulate the payment efficiencies of web-based businesses.
The High Cost of a Bad System
Companies that bill customers for goods or services when or after the good is delivered or the service performed need to have great follow-up systems for cash collection. Poor cash-collection systems can result in:
High order-taking error rates. Did the salesperson provide the proper terms and payment agreements in the sales ordering document?
High order-fulfillment error rates. Did the production and fulfillment people get the order right?
High DSO (Days Sales Outstanding) rates. Is the customer using the company as a “bank,” delaying payments to the company and paying other vendors first?
High cost of dispute resolutions. How to play the good cop/bad cop role when it comes to collecting cash from a customer?
Inefficient/ineffective collection processes. How much is being written off on receivables that could be collected with a little creativity, or a call to the client from senior management rather than the billing department?
The result of a poor billing and collection system is long-term losses…