Want to speed up cash flow in your work-to-cash cycle? Tired of frustrating clients with your accounts receivable processes? Read this to learn more.
Top 6 Online Payment Mistakes That Slow Down Your Firm's Cash Flow
We talk to a lot of executive and finance leaders of accounting firms. Every single one wants to shorten the time between "delivering services" and "getting paid by clients", e.g. they want faster cash flow.
And one of the keys to speeding up cash flow is offering a best-in-class online bill payment experience to clients.
Unfortunately, the traditional billing, collections, and payments process at these firms — i.e the work-to-cash cycle — contains several friction points that can lead clients to delay paying their bills, harming firm cash flow and even damaging firm reputation with clients.
We’ve compiled a list of the top online payment friction payments that could be hurting your cash flows, along with some ideas for solutions.
Fix these to raise cash flows and improve the client billing experience (and client experience overall) at your firm.
1. Confusing Invoices
Much of the friction related to online bill pay occurs well before a client sits down at his or her laptop to pay the bill. One of those "upstream" friction points is having a confusing invoice. Many accounting firms haven’t touched their invoice design or presentation in decades.
Back then, you could get away with a more confusing invoice full of complex fees and a lack of personalization.
Today, however, your clients have many more options thanks to the Internet. Everything, including your invoice, must be straightforward. Otherwise, your clients will take longer to pay — harming cash flows.
In fact, confusing invoices may contribute to client turnover. Clients may look for another firm offering similar accounting services but with an improved billing and invoicing process.
2. Impersonal Invoices
Additionally, your invoice may not fully convey the value you provided to your client — especially if it consists of sterile line items (e.g. 20 hours X $200 hour = $4,000, etc.).
Notice how impersonally that reads. The client may barely remember what you actually did.
Instead, use your invoice to emphasize the work you performed for your client. It’s subtle, but it adds personalization and reminds your client why they chose to work with you in the first place.
Finally, consider all the firms that aren’t doing this. You’ll stick out in your client’s mind — and the more you do so, the better.
3. Suboptimal Payment Instructions
Similar to the first two issues, your invoices might contain “How to Pay” instructions that sound cold and robotic and are challenging to figure out (or you might not have instructions at all!)
Such sterile-sounding payment instructions don’t reflect the close relationship you and your client have — and if the instructions are tough to understand, it’ll only take them longer to pay.
Your “How to Pay” instructions should be clear and straightforward and have some personality in them. Ease up on the formal language and cut out jargon where possible.
Remember, a human being ultimately reads your invoice.
4. A Lack of Online Payment Options
The fewer ways your client can pay, the less likely they’ll pay you on time. Meet your clients where they are by giving options.
Unfortunately, some firms — even profession-leading, Top 400 firms — still lack online payment options for their clients. As a result, the clients have to scramble to write and mail a check to the firm.
Lacking online payment options directly harms cash flow, too. Checks take longer to arrive than online payments, and that check could get lost or damaged on the way. In either case, your cash flows take a hit.
Online payment options like ACH, debit, and credit cards can be instant—especially if they're offered through a mobile payment experience. However, you can do so much more by offering clients a personalized payment portal.
Such a payment portal would allow your client to view any unpaid bills, look at their payment history, save payment information, potentially enroll in autopay, and more. Simply adding a payment portal gives your customer service a significant boost. Paying you becomes much more convenient — not to mention your client feels a bit special with a personalized payment portal.
5. Excessive Manual Data Entry
As we mentioned, every friction point in the payment process reduces your client’s chances of paying on time. One of the most substantial of these friction points is manual data entry.
Keying in a long invoice number followed by credit card or bank account information gets old fast.
Prioritize making it possible to save payment information (per tip #4) and automate other areas of this data entry. The cumulative time saved for the client will be enormous, and they will appreciate you more for it.
6. Too Many Screens and Clicks
Many B2B payment processes have far too many steps. Being forced to jump through three screens and click eight buttons to do any simple task — let alone one that involves giving money away — doesn’t always leave a good impression on clients.
Think of how Amazon has optimized its checkout process. Amazon’s one-click purchase feature lets customers set a default payment method and address ahead of time.
Then, they can click Buy Now, which takes them to a screen containing their payment and address data to make sure things look right before clicking one more button to finish the purchase.
B2B invoices can and should be the same way. Clients are less likely to abandon the payment mid-transaction when they simply click, verify, and click to pay. Ultimately, this improves your cash flows and nudges customer satisfaction upwards. Similarly, there are fewer opportunities to make mistakes that delay full payment or result in the customer needing a partial refund.
Delight Your Clients and Boost Cash Flows
Personalization and customer experience aren’t just vital for your services. Implementing these into your billing and invoicing can decrease payment abandonment, bolster cash flows, and improve customer satisfaction.
To learn more about the importance of client experience and how to delight your clients throughout the billing process, download our free whitepaper, Creating a Better Client Experience Through a Better (AI-Powered) Work-To-Cash Cycle.