How to Collect Payment from Customers Faster

Introduction 

Collecting timely payments is critical for any business’s success—not just to maintain cash flow but also to fuel growth and operational stability. 

So, what can you do to collect payments faster? 

One effective approach is to ensure your collections process supports modern payment methods that offer a seamless customer experience. For instance, embedding payment links directly into reminder emails can significantly boost your collection rates. If outdated systems are holding you back, exploring contact-free payment strategies could be the game-changer your business needs. 

Ready to learn how to collect payments faster? Let’s get to it.

How to Collect Payments From Customers? 

There are numerous ways to collect payments and streamline collections from customers, including: 

• Make sure invoices are accurate
• Accept various payment methods 
• Send timely reminders
• Resolve disputes on time 
• Automate manual tasks like worklist prioritization, call logging, etc.

• Accurate invoicing 

  One of the major reasons behind slower collections is inaccurate and inconsistent invoicing. Once a customer notices discrepancies in invoices, they will raise a dispute on your portal. Then, your team will gather information, validate it, rectify it, resend the invoice, and finally collect the payment. You can save the hassle by ensuring all the details are accurately included—customers’ contact information, purchase details, prices and rebates, invoice date, maturity date, etc.

• Accept various payment methods

  Many traditional systems don’t let you accept payments from ACH or SEPA cards or support transactions through double debit cards. Solve this problem by implementing third-party payment integrations and accepting payments from local payment preferences, virtual cards, or ACH or SEPA cards. 

• Send timely reminders 

  Late payment reminders are a major reason behind slow collections. Most of the time, collection analysts take action only when a customer account shows distress, and there is a high probability of default. The AR team must adopt a proactive approach and prepare a schedule to send reminders ahead of payment time. One of the best practices is to embed payment links in the reminder notifications so customers can pay on the go. 

• Resolve disputes on time

  If a customer finds issues relating to an invoice or purchase order, they will raise a dispute on the portal and ask the business to look into it. A collection analyst will identify the reason behind the dispute, send it to the relevant department, and then communicate to resolve it. This manual process takes a lot of time. 

  Make sure your automated collections software offers a dynamic dispute solution that helps follow up on a past-due invoice, auto-match with reason code, attach the validation copy, and route it back to the customer within the collections cloud. If the dispute is valid, the system will use an existing credit against the invoice to offset the pricing difference and resolve the dispute. 

• Automate manual tasks 

  Manual tasks like creating worklists, prioritizing customers, preparing and uploading invoices on the accounts payable portal, making call logs, transcribing customer interactions, etc., consume around 30-40% of an analyst’s productive time. 

  Consider implementing automated collection software that will automatically create worklist prioritization based on the analyst’s bandwidth, take notes from phone calls and record critical information like promise-to-pays, gather proof-of-delivery and other backup documentation, and upload invoices on the portal while providing deep insights on customer behavior. 

How Do Contact-free Payments Help Collect Payments from Customers Faster

The process of collecting payments is more complex than it sounds. In fact, research suggests 55% of all B2B invoices in the US are overdue. This shows how common it is for customers to fail their payments on time. With more than half the sales not translating into cash, it will impact your liquidity and cash flows and ultimately hinder your business’s growth in the long run.

One of the major problems behind slower collections is the inconvenient payment options offered to customers. Most customers today want integrated payment systems to help them pay their invoices on the go, without any hassles. 

Unfortunately, traditional payment methods in a collection solution do not support modern methods like ACH credit cards or double debit payments. Additionally, when customers receive a payment reminder notification, they have to exit the message, log in to the portal, and then initiate a payment. These inflexible payment methods will ultimately lead to customer frustration and payment delays.

One of the most effective ways to navigate these challenges is to implement B2B contact-free payment strategies and automating the payment process. With digital solutions like ACH transfers, automated invoicing process, etc., you can not only reduce the delays and errors with collections but also pave the way for real-time tracking, quicker reconciliation and boosting cash flows.

6 Contact Free Ways to Collect Payments from Customers

Here are some tips to implement contact-free payment for faster collections: 

• Provide in-app payment acceptance 
• Build customers’ self-service portal
• Embed smart payment links in dunning and corresponding emails
• Support ACH and SEPA payments
• Offer secured payment methods
• Allow alternative payment methods 

• Provide in-app payment acceptance 

  One of the biggest friction points in payments for customers is switching between payment portals and the platforms where they receive payment reminders. The best solution is to build in-app payment acceptance in the automated debt ckollection calls software, which will not only help customers pay through self-serve payment options but also reduce further delays in payments.

• Build customers’ self-service portal

  You can make customers’ lives easier while fast-tracking payments by building a self-serve invoice portal. The portal must have: 

  • Multi-payment methods

    Customers must be able to pay electronically, on invoices, or the account. The e-invoicing solutions should accept payments from various payment methods like credit or debit cards, and ACH, with the ability to add surcharges and optimize interchange fees. 

  • Schedule and auto payment 

    This feature is especially useful for customers who repeat purchases now and then. Allow them to set up automatic payments at any frequency. Auto payments usually have a dollar value limit or can be initiated for all the open invoices at the time. 

    Your EIPP will automatically initiate the payment via the preferred payment method and frequency (daily, weekly, or monthly). Additionally, customers should also be able to schedule a payment that could be triggered on a certain date. 

  For example, a customer has set up bi-weekly auto payments with a limit of $1,500 via credit card in e-invoicing. On the first Monday of every month, the EIPP calculates the total value of open invoices. If the total amount due adds up to $1,300, the EIPP will initiate a credit card payment of $1,300. If the total due is $1,800, the system will omit the most recent or latest invoices to bring the value to under $1,500 and initiate the payment.

  

• Embed smart payment links 

  When you send dunning emails to customers, reminding them of past dues and aging invoices, include smart payment links in the email itself. Your customers should be able to click on the link and pay on the go. 

  Additionally, these payment links must accept different global payment methods. For example, a customer receiving a demand notice can immediately click on the link and initiate an ACH/Credit Card payment for all or a part of invoices. Once the payment is completed, the status in the collections management software will show up in the Collector’s worklist. 

• Support ACH and SEPA payment 

  Your collection automation software must support transactions initiated using ACH or SEPA, ensuring a seamless and secured payment process. To process ACH software (automated clearing house), you need to implement a third-party payment processor like Stripe or Moneris using an API and conduct an eCheck. Whenever a new ACH payment is initiated, your collections management software must validate the account and process via file to the merchant bank or a processor. 

  Similarly, SEPA direct debt(Single Euro Payments Area) is a common payment method in the EU and includes an account-to-account payment procedure. You can process SEPA payments through a standard ISO 20022 file to the merchant’s bank or a payment service provider through API calls like PPro or Novalnet. 

  

• Offer secured payment methods 

  Building a seamless payment experience goes beyond just supporting various payment methods. Broken or fragile payment gateways will not only delay payments but also pose threats to your and your customers’ precious dollars. 

  For instance, when your customer logs into the e-invoicing platform and enters their credit card details, your solution must call the payment modules to tokenize the credit card and process a payment authorization. It can look something like this: 4444333322221111 (RAW card) -> 44KAJUSTMELS1111 (Token). 

  Similarly, if you are using an ERP, your customer support team will use the sales order entry screen, create the order, and enter the customer’s card info to process the payment. At the sale order event, ERP will call the payment gateway API to tokenize the card number and request approval for the payment. 

• Allow alternative payment methods 

  One of the easiest ways to speed up the collections process is to align with local payment preferences, like alternative payment methods (APM). It’s a general term used for not-so-widely used payment methods like Boleto Bancário (Brazil), Giropay(Germany), iDEAL( Netherlands), Bancontact (Belgium), and PayPal. These are processed through flat file delivery to a banking partner or a 3rd party payment service provider. 

  For instance, if a customer in Australia chooses BECS (Bulk Electronic Clearing System) to make a direct debit payment and enters their bank details, your system must process this transaction through one of several BECS-enabled partners or an ISO 20022 file delivered to the merchant’s bank. 

  This automated and efficient handling of payments can speed up the collection process and reduce the manual efforts involved. APMs like BECS often use streamlined processing methods and consider transactions in batches, resulting in quicker processing times than traditional methods.

Accelerate Collections with HighRadius’ Collections Management Software 

A seamless payment process is one of the key pillars of faster and robust collections. With out-of-the-box dunning software like smart payment links in dunning emails and payments over the phone. The solution enables you to:

• Offer online payment options such as debit cards, PayPal, and more through payment links in emails or reminder SMS messages, ensuring customers a convenient and secure experience.
• Process over-the-phone payments using saved cards or other methods during customer calls, seamlessly integrating with IVR systems to offer self-serve phone payment options.

Additionally, with HighRadius collections management software, companies can gain access to intelligent analytics and reporting tools that provide deep insights into their collections performance, which in turn help them reduce DSO, drive informed decision-making, optimize their collections strategies, and drive better results. It also offers seamless integration with your existing systems, ensuring a smooth implementation and maximizing the value of your technology investments.

FAQs

1. What is collecting payments?

Collecting payments refers to the process where customers pay for the goods delivered to the business. As soon as a business sends the goods to customers, it will prepare an invoice including details like customer details, payment terms, etc., and send it to the customer to be paid on the due date. 

2. What are contactless payments?

Contactless payment refers to a cash-free, tap-and-go payment procedure. Customers will simply wave a payment card, smartphone or any other device near a point-of-sale terminal supporting contactless technology. The method uses Radio Frequency Identification (RFID) to transmit payment information to transmit data wirelessly. 

3. Are contactless payments secure?

Contactless payments are secure with tokenization, encryption, and limited range. For instance, DI-eCommerce, when used to purchase from a web store, returns a token after card data is entered. This is used with other data and the Authorization API of the workflow website to approve transactions.

4. Are there transaction limits for contactless payments?

Since no signature or PIN verification is involved, contactless payments often have a capping on transactions, with a limited amount that a user is allowed to spend at a given time. This limit is known as a cardholder verification limit (CVM) and can vary between banks.