How Setting Automated Payment Reminders Can Make You More Money
Remember those customers that have paid their invoices late? Remember those that are late so often, their consistency is admirable? Odds are, you probably even remember their middle name. While this may seem humorous, late payments slowly eat away at your finances.
Not to mention, there is the very real consequence of having to dedicate time and labor to track down those unpaid invoices, time and labor which could've been used towards activities that grow your business. Surprisingly, a solution to this issue exists in the form of automated payment reminders.
Automated Payment Reminders
Automated Payment Reminders are exactly that, reminders that could be in the form of email, paper mail, etc., which serve to notify a customer or business that payment is upcoming or due.
There are several solutions that carry this functionality, including e-invoicing software.
Some have features that allow you to automatically send out payment reminders and other communications. It is important to note that the simple act of notifying a customer when payment is upcoming or due can make the difference between getting paid on time and getting paid late.
With $3 trillion in outstanding invoices reported in the U.S., now higher due to the economic impact of the pandemic, it is more important than ever to collect on unpaid invoices. The timely communication of when a payment is upcoming, due, or late, increases your ability to get paid. Take for example, the business that had $300k in outstanding invoices which went unpaid by the end of the year. Consider what that particular business could have done with that extra income.
Benefits of Automated Payment Reminders
Automated payment reminders save you essential time which could be spent on higher value activities such as increasing your online presence. Having to manually send out payment reminders is busywork which can be automated with current technology.
The invoicing process requires time and let’s be honest, most business owners are not accountants. 60% of small business owners report feeling that they are not very knowledgeable about accounting and finance.
This being the case, unnecessary time is taken up on administrative work, or it is often outsourced. By automating payment reminders you can reduce the time spent on administrative labor, and thus reduce labor costs.
Extra Revenue - Late Fees
A less mentioned byproduct of automated payment reminders are the ability to add late fees. Modern e-invoicing software solutions come with the ability to add on late fees when invoices are overdue by a set amount of days.
While not ideal, late fees are a unique way to make extra revenue. With automated payment reminders, you can add your payment terms and conditions to your communications so that customers are aware. Late fees have the added benefit of encouraging positive payment behavior.
Overdue invoices negatively affect cash flow. 82% of businesses fail due to cash flow issues. Biller Genie is a cloud-based solution that automates accounts receivable from bill presentment, to follow up, and collection - without changing your current process. The Genie does all the heavy lifting for you with no new software to learn, it easily integrates with your accounting system, and you get to keep your existing payment processor. As a result, our average subscriber sees a reduction in outstanding balances by 40% and gets paid up to 15 days faster. We wish to take away the headaches involved in accounts receivable. Click here to learn more.