7 Ultimate Ways To Nip The Cause Of Late Recurring Payments In The Bud
Late payments hurt every business whether it is subscription-based or not. But the complexity of the issues that late payment of subscription fees causes is difficult to manage. Delay in recurring payments is directly linked with the cashflow problems.
You cannot focus on your core subscription business activities. Every day, you expect that you can recover payments from certain customers, and every day things go out of the way.
Even if you have an automated recurring payment management system, paid and unpaid bills & invoices pile up in a way that you cannot sort things out.
Another drawback of delayed recurring payments is the adverse effects they exert on sales forecasting.
Unarguably, sales forecasting is very important in the recurring billing business, but you cannot predict sales if your subscribers do not pay you on time. Late recurring payments affect the KPIs (Key Performance Indicators). The system is not fed the complete sales data. It will fail to show you the accurate behaviour of KPIs. Error in KPI monitoring means erroneous sales predictions.
All that we want you to understand is that late payments cause problems to sprout one after another. So, the SubscriptionFlow team has jotted down the following ways to handle the annoyance of late payments. Read them. Implement them. And, get your recurring payments on time.
Easy Payment Methods
The number of online payment methods is increasing just like the number of subscription businesses. It is not possible that all subscribers would have an understanding of the payment method that you offer. You must offer them the payment methods that they find feasible.
One of the biggest concerns for all customers is fraudulent activities in the process of online billing and payments. AI algorithms have enabled the subscription business community to detect fraud risks. You can run your business operations through a subscription management platform that is AI-powered.
If you want to know more about the importance of Artificial Intelligence (AI) to offer ease of paying subscription charges to your customers,
Read: Online Payment Frauds—Types, Challenges, Detections, & Preventions
You have done your part.
Let SubscriptionFlow take it from here!
subscription management software.
When it comes to facilitating your customers with easy, automated, and most secure payment methods, nothing is more convenient than ACH payment methods. ACH payment methods allow doing everything automatically from billing to the transaction regularly.
You can find the details of ACH payments in our previously written blogs so,
Read: Understanding the ACH Payments—Learn In Detail What Are They and How Do They Work?
Incentives for Timely Payments
If you offer incentives to those recurring fee payers who always pay on time, you can hit two birds with one stone. The number of people who pay recurring fees timely will increase. Also, the customer churn rate will decrease.
Incentives motivate recurring customers to pay their fees timely. They also stick with you for a long time because rewards help in building a bond of loyalty with the customers. You can offer discounts and coupons from time to time. Market your offers so that the customers and leads get notified about the benefit of paying subscription charges timely.
Keep offering lucrative benefits to your subscribers, and keep re-convincing them to pay timely.
Effective Communication with Customers
Interaction with the customer can provide you with many benefits, only if you know the best way to communicate with them.
- You have to be persuasive when communicating through marketing campaigns.
- You should be convincing when you onboard customers.
- You should be explanatory when conducting customer training.
- You must be polite when asking for recurring payments.
- You have to be cooperative when offering support services.
See, you need to adopt different tones at different times with the same customer. And it is indeed a challenge to adopt a polite tone when you ask for timely payments or send emails for payment recovery. If you also find it difficult to communicate with your customers adequately, then you can go towards automation. Presently, AI-powered subscription management platforms generate autoresponse at the right time. Use chatbots to quickly respond to the customers. AI-based communication tools are so effective that they optimize the customer experience.
In-Time Invoice Generation
When you start suspending the subscriptions due to payment failures, you come across many subscribers who would say they did not receive invoices in time. To avoid this situation, you need to provide your customers with in-time invoices. Also, offer multiple payment methods to get paid in time otherwise it can become the leading cause of delayed payments and involuntary churn.
To learn more about enabling customers to pay in their local currency, you can
Dealing With Excuses Mindfully
When you ask customers to pay their recurring billing charges, you will have to listen to the following pretexts:
- I didn’t receive the invoice in time!
- I didn’t receive the invoice at all!
- I tried to pay, but the transaction failed.
- I’ll pay within a few days.
- Credit card got lost. I’m already in a mess.
The list of such excuses is quite long. So, we will not waste time counting them. The point is, how to deal with these excuses?
Well, there is no single key to resolve the issue of these well-thought excuses that recurring customers tell you. For instance, some customers who are not offered to pay in their local currency, easily get rid of their responsibility of paying charges on time by telling you the pretext that currency rates are difficult to understand, and they are doubtful about their invoice.
Thereby, firstly, you will need to make your system more efficient. System efficiency means, that your system will allow customers to at least try once again in case of payment failure and offer multicurrency support. Secondly, you should make your terms and conditions clear to your customers.
Read: What Are the Online Payment Methods for Automated Recurring Payment Processing and How Do They Work?
Robust Payment Recovery System
Getting payments in time is one thing, but what to do with those subscribers who get their subscriptions cancelled for not paying their charges? Some of them would be those who intentionally delayed their payments. However, there will be those as well who got unboarded unintentionally—causing involuntary churn. Again, multiple payment methods and gateways are the best way to avoid at least losing those customers who want to stay but get their subscriptions cancelled because of payment failure.
We have written many blogs about payment gateways. To delve into the details of payment gateways:
You need to recover payments from all those who have not yet paid no matter what is the reason and smart dunning is the most appropriate way to recover payments. Through dunning management, you can communicate with customers. Send them notifications when the deadline to pay subscription charges is near. If you do not receive recurring payments, you must send follow up emails. This whole process of communicating with customers can be done if your recurring billing and payment software allows you to manage dunning automatically.
The Last Words…
If you are using a perfect system for subscription payments and your dunning management is effective, still, the customer does not pay you on time, then the last option is to cancel the subscription of the subscriber.
Keeping those customers on board who delay their subscription payments will only cause imbalances in cash flow. Rather than accommodating these customers, it is more beneficial for your business to simply let them go their way.
If you have any ambiguities left regarding late recurring payments, then contact SubscriptionFlow.
Think Business!
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