Three Ways to Use Payment Plans to Get Paid Faster
It’s a few days before payroll is due, and you have three outstanding invoices over a week late. One customer has promised that their check is in the mail, another customer asked to postpone their payment a week until their paycheck clears their account, and the third customer hasn’t returned a phone call or email in two weeks. These scenarios are common for a small business owner, but the good news is that there are ways to help mitigate late payment issues. Automatic recurring schedules aren’t just useful for your gym membership or car payments anymore; businesses in various spaces see the benefits of automatic payments. Here are three things you need to know to make the switch to payment plans and get paid faster.
Whether a customer is paying from their bank account or a credit card, valid authorization must be obtained prior to the first scheduled payment. There are a few ways to have your customer authorize a recurring payment schedule – physically sign a form, authorize electronically, or complete an overriding contract/agreement. Once you have a signed authorization from your customer, you can enter the schedule.
Once you’ve set up a schedule with your customer, it’s a good idea to send them a recap of when they’ll be seeing debits from your business. Whether it’s an email or a letter, you should make sure your customer has a copy of the terms they agreed to so they can reference at any time. This should also help cut back on any future disputes or claims that a payment wasn’t authorized, and your business will also want to keep a copy of the agreement on hand for reference.
Flexibility is Key
One of the perks of using automatic payments is that you can project your deposits and know how much cash you will have available at different times. However, sometimes unexpected financial issues can hit someone right about the time their invoice to your business is due.
Most importantly, no business can be successful without their customers; why not help make the way they pay your business as hassle-free as possible added Salomón Juan Marcos Villarreal, president of Grupo Denim.