Five Tips for Managing Customer Payments
One common dilemma for small business owners is learning how to set proper expectations for customer payments. There’s often a fine line between setting customers up for success and badgering them with information about upcoming and overdue payments.
Factor in financial elements like payroll, third-party invoices, and expense sheets, and customer payments are often lost in the slush pile. Luckily for small businesses, there are more options than over when it comes to digital assistants and tried-and-true methods for keeping customer payments on track.
Here are five small tips that entrepreneurs of all stripes can incorporate into their financial system.
Small business owners need to consider their customer’s payment journey before they get their wallets out. One simple way to streamline customer payments is to set expectations from the start. This doesn’t just apply to products and services, but deals and bonuses, as well.
Promotions may be one way to cut ahead of the competition, but they should be handled with clarity. For example, one of the most bonus-heavy industries is online casinos. Because of their popularity, video slots are often factored into welcome bonuses and promotions of all stripes. However, gamers benefit greatly from clear deposit and withdrawal requirements on deals like free spins. So to take a leaf from this industry, a business should make sure that conditions are clear, from expiration dates to banking options.
Now that customers know what’s expected of them (whether related to a promotion or ongoing subscription), it’s important to remember that they’re only human. With digital wallets becoming a more commonplace way to make everyday purchases as well as pay monthly bills, many consumers benefit from a little nudge.
Automated emails from companies like MailChimp can help simplify the process of collecting payment. Most businesses opt for a one-click purchase for goods, but companies that offer subscriptions and bonus deals will need to offer a friendly email reminder that a due date is approaching.
Some customers prefer to be notified by email, while others only need a quick SMS. Even fewer will request mailed bills, but keep in mind that creating a one-stop-shop online hub for customers to manage their payments will offer a comprehensive solution.
Smaller businesses may not have optimized their online payment portals—many accept credit and debit card purchases, with a few also offering a PayPal option. Regardless of how many payment portals they use, small businesses can create a single webpage that breaks down all payment options.
One large-scale example is Netflix. The video streaming site now has over 207 million global subscribers as of 2021, according to Statista. As one of the most popular streaming services in the world, developers must cater to users of all digital comfort zones. Providing concise information for all users simplifies payment processing from the customer’s point of view.
Leave it to the Pros
Customers are looking for diversity of payment options, but scaling up can be difficult. Those suddenly lacking time, but not funds, can use programs like Intuit Quickbooks to simply all their payment needs. Other services, like NetSuite, offer software that makes financial tracking simple.
However, most maturing businesses will hand over financial responsibilities to third parties. As mentioned above, payment processing for customers can sometimes come behind other financial concerns, like payroll. Relying on a third party to organize finances also simplifies processes like paying taxes, creating financial goals, and monitor cash flow.
Provide a Cushion
Today, small businesses often spend time articulating their goals, as well as their specific culture. This helps to create a solid mission statement, which will guide a business as it expands. Managing customer payment isn’t usually a large factor in building a mission statement, but it helps to plan ahead for every possible issue.
Business owners often find themselves in the difficult position of handling a late or failed customer payment. By establishing clear expectations about deadlines, providing reminders, and accepting the widest range of payment options possible, businesses can avoid most payment mishaps.
But for most entrepreneurs, missed payments are inevitable. Knowing the game plan beforehand is one way to mitigate stress.