Remember that time when you spotted a great little out-of-the-way restaurant and were really excited until you saw the "cash only" sign in the window and realized your wallet was a little low? How about that time you were ready to sign up for that great online service only to find out they take exactly one type of credit card--the one you don't have? The result likely wasn't disastrous (we hope!), but it may have caused a delay, or perhaps you just decided to deal with it some other day.
This, my friends, is exactly the behavior we want to avoid with invoice payment. Anything that causes friction or causes a customer to push off payment processing to another day is to be avoided diligently. What can you do to avoid this behavior?
Offer More Payment Options
A wide range of payment options are available for businesses today. More and more businesses are turning to electronic payments in particular, and for good reason. According to Intuit, giving clients the opportunity to pay you electronically can mean the difference between receiving payments in 10 days versus an average of 27 days through other methods.
- ACH and eChecks are getting easier and cheaper to offer thanks to a new breed of services competing with both traditional and online banks to improve service and lower fees. If you haven't explored ACH or haven't done so lately, now is a great time to take a look.
- Credit and debit card acceptance should also be examined carefully. Although still relatively expensive compared to other forms of payment, the immediacy and wide accessibility makes it a good option, especially for small balances. A host of new players have made it dramatically faster, cheaper and easier to implement than ever before.
Put It On the Invoice
It's amazing how many businesses have gone to the trouble and expense of setting up alternate payment methods and then don't actually TELL customers what the options are.
- If you offer ACH, put your banking details on your invoices and instruct anyone calling to follow up on an invoice on how to walk customers through setting up and using ACH for invoice payment.
- If you offer credit and debit card acceptance, provide a link in your invoice to your credit card payment form. You might even consider requiring a credit card on file to take care of small balances--the fees are likely cheaper than following up on unpaid invoices later.
- A lot of your customers may still prefer to send a paper check, so make sure the "Pay to" and remittance address are front and center on the invoice.
Bonus Tip: Many business customers will require a Form W-9 to set you up as a vendor. Consider including a link to a copy of your completed W-9 form in your invoice.
Tell Customers Which Payment Type You Prefer
There's nothing wrong with telling the customer which form of payment you'd prefer. They won't know unless you tell them, right? Try something like this:
Thank you for your business! Our preferred form of payment is ACH and our banking details can be found below. Please contact us if you need assistance setting up ACH payment. Otherwise, please make checks payable to "ABC Company" and remit to the address below.
Bottom line, when it comes to payment acceptance, businesses benefit from having options. So consider carefully what payment options you want to present to your customers, and make it simple for them to pay you quickly.