Are you hesitant to offer multiple payment methods to your customers? A lot of companies share that sentiment, because providing more payment options forces you to give up some control. In some cases, you may even incur more costs, such as instances where your buyers opt to start paying with a credit card. That doesn’t even touch on the back-end logistics of matching payments to invoices when you have more methods of payment hitting your bank account.
The costs can feel substantial, both in hard costs and extra labor. However, there are ways you can manage these costs while still offering more customer payment options.
By making smart policy decisions and relying on technology, you can maintain control and benefit your business with improved cash flow and streamlined payment processing.
Customers want multiple payment methods
You certainly could keep a tight rein on your payment methods, but that’s not what customers want. They expect to be able to choose how they initiate payments. For example, a cash-strapped buyer may want—or even need—to make payments with a credit card to preserve the cash in their accounts.
When you offer multiple payment options, you will keep your customers happy during the purchasing process. Don’t risk losing them if the payment options become a sticking point and they simply take their business elsewhere.
For many companies, accepting credit card payments causes the most angst. Yet, there are ways to allow card payments—or other customer payment options—while maintaining control. The key is the thoughtful implementation of accepting additional payment methods, including which customers you extend these options to and under what circumstances.
Establish a corporate policy for payments
If your overall goal is to create the best customer experience, then you would open up all payment modalities. However, the business reality is much different. Sometimes, it makes more sense to align your policy with specific scenarios.
For example, you might offer more payment options to specific customers or earlier in the invoice lifecycle. You’re creating a payment policy with tangible business outcomes, such as collecting payments more quickly or creating a seamless experience for VIP customers.
With Billtrust, you can make these decisions during the customer onboarding process.
“You might decide, ‘This is how I’m going to view the chessboard today of who can pay by what and when,’” says Kunal Patel, VP of Payments Strategy at Billtrust. “When your financial position or your strategy changes, you’re empowered to shift things around and create a payment policy that better reflects your corporate policy.”
Enforce your payments policy
Policy control also comes from enforcement. You might notice that your customers are paying later, which often happens when a late payment policy isn’t enforced. Your customers pay two days late, and nothing happens. On the next invoice, they pay 10 days late. If there are no follow-ups and no controls in place, it becomes a downward spiral that affects your overall days sales outstanding (DSO).
Use technology to ease payments processing
One of the most complex issues with card payment is the acceptance of virtual cards. Accepting cards opens this can of worms, and AR teams can struggle to process these payments.
You might receive hundreds of emails from banks with virtual card numbers, and then you and your team have to extract the necessary information from the email notifications. On top of that, you have to PCI compliance and matching the payment back to an invoice.
At Billtrust, we have a Digital Lockbox that runs on our Business Payment Network. This software layer solves the workflow challenges of accepting virtual card payments by extracting relevant information from emails and matching it using business rules.
The downstream impact is that your cash application process is aided by powerful matching technology. It uses machine learning and AI to process the various email notifications you receive and solves the pain points many companies experience.
Monitor your AR with powerful analytics
Of course, offering additional payment methods is often paired with overall shifts you want to make to improve your DSO. To know when you need to make changes, first identify specific trends or changes in customer behavior.
It would be almost impossible to uncover why your DSO is increasing in a manual environment. At a minimum, it would require a significant amount of analysis. With Billtrust dashboards and the analysis we offer, you can see trends. If you notice that your customers are starting to pay later, you can drill down into the specific subset of customers that are paying later.
With that data, you can make more informed decisions about offering multiple payment methods, in ways that make sense for both your customers and your overall business.
