If you are a craft supplier, you know that collecting accounts receivables can be a long and arduous process. But did you know that this is not always your buyer’s fault? In fact, some of your business practices might involuntarily add unnecessary friction to the payment process. Today, we want to share with you 5 ways to get paid faster!
This article focuses on ways to remove friction from your buyer’s payment process and incentivize early payments.
As a seller, PivoHub allows you to connect to thousands of potential buyers, to which you can sell, deliver and invoice your products. Think of the seller-buyer connection as a relationship: you have common interests (your awesome products), spend time in the same places and when you don’t hear back for a while, you’ll start to miss each other! But as in every relationship, there is this one thing the other person does that drives you nuts! That’s right - we’re talking about late payments! We’ve all been there: As a seller, you follow up on your accounts receivables and you notice that some clients are behind on their payments. “Not again” you shout in disbelief and send fiery payment reminders to your buyers. On the other side of the screen, your buyers find yet another payment reminder. “Not again” they exclaim, adding: “I would love to pay quicker if only it was made easier for me!”
You two are on the verge of breaking up “to see other people”, but wait! We totally get how frustrating the situation can be, but here are 5 things you can do as a seller to keep your buyer relationship healthy and save you couples therapy over late payments:
One of the main reasons your buyers are not paying you is simply because they don’t know how! Living in the digital age, there seem to be a million ways to pay someone. But which one does apply to you? We at PivoHub receive a surprising amount of queries from buyers telling us they do not know how they can pay their suppliers. This forces them to chase after you by phone or email to get the information and send you your money. Naturally, this can lead to payment delays that neither you nor your buyer want.
Buyers would pay you on time if they knew how! So take the guesswork out of it.
The solution is simple: make sure your preferred payment method is displayed on every P.O. and every invoice. By following this one simple step, it will become crystal clear for your buyers how to send you your money - no more misunderstandings, panicked emails or late night phone calls!
If you are already using PivoHub to streamline your invoicing, here’s how you can show your preferred payment method on checkout as well as on the invoice itself.
Although we all love to think that we are the one and only for our special someone (or our buyers), chances are your buyers are doing business with more than 100 different suppliers at a time. Take Tara for example: as a buyer, she pays more than a dozen invoices per week. As you can imagine, her amount of paperwork quickly adds up. Now imagine that 30% of suppliers are asking Tara to pay them by check. If you were wondering who’s that person running to the post office rain or shine day in and out, balancing a million letters in her hands - yes, that’s Tara! We’ll spare you the equation of the exact mileage she covers or envelopes she licks, but it’s definitely more than she wants it to be.
Needless to say, writing and posting checks is a very poor use of your buyers time. After all, they could spend it buying more of your amazing products on PivoHub instead.
Get paid faster by accepting online payments!
Checks have been around for hundreds of years, but the rise of online transactions has been a major catalyst for change. Allowing your buyers to pay online is more convenient, environmentally friendly and of course: faster! Even if your buyer signs and posts the cheque the second they receive your invoice, you will still have to wait until it arrives, which can be days or even weeks later. With online payments, the transaction can be completed in the span of a “click”.
So what are you waiting for? Give your buyers a better way to pay you. And by that, we mean one that involves the interwebs! By offering your clients to pay by credit card or automated bank transfer, you remove unnecessary paperwork and focus on what’s important: the sweet sound of dollars hitting your bank account.
We’ve asked 50 of our most active buyers how they want to pay their suppliers and 96% said they preferred to pay their suppliers directly via PivoHub.
If you want to offer a seamless payment experience, but you don’t know how to set up your payment processor for online payments, we have your back. You can use PivoHub to get paid by credit card or automated bank transfer without any difficult configuration. This means your buyers can track their order, see their invoice, and pay in the span of a few clicks.
Newsflash: purchase orders are out of fashion! As a matter of fact, we have broken down 3 reasons to stop using purchase orders now! But to sum it up for you - purchase orders can significantly slow down the payment process. After receiving a purchase order, buyers have to wait for the actual invoice to pay you, which is often late or never arrives. Furthermore, using purchase orders creates confusion by multiplying the number of sources of information your buyers have to keep track of. Overall, the margin for error is a lot higher for transactions where purchase orders have been used compared to invoice-only payments.
Using purchase orders can increase the margin of errors and slow down your payments.
Moving away from purchase orders is a no-brainer to keep your buyers happy and your business healthy. Saving your customers time and confusion allows them to pay you faster, which in turn, helps you plan and operate your business more efficiently.
Do you ever daydream of your ideal client? And does this daydream include a client who pays you early? We bet! Thankfully there is something you can do to turn your dream into reality:
Motivate your buyers to pay you early by rewarding them for early payments!
A sure fire way to incentivize your customer to pay early is by giving them a special nudge through the form of a small discount. This tiny incentive can go a long way in making sure that your invoice sits atop the pile of papers every time.
What was that? Your perfect day is being crudely interrupted by clients who are paying late? As the good cop, you have been offering discounts for early payments, but now it’s time to put the bad cop uniform on and start applying late payment fees!
If you have buyers who are continuously paying you late, let them know that you will start applying fees for late payments.
Here is how to set up automatic late payment fees in PivoHub. Now, managing discounts and late fees dynamically would be highly challenging if you had to do it manually, but fortunately you don’t. If you are already using PivoHub to invoice your customers and collect their payments, it’s a simple matter of selecting which customers should get access to this discount and setting how much.
Whether you choose to be more precise when it comes to letting your buyers know how they can pay you, throw out checks to make their payment experience more pleasant, deliver with invoices to avoid late payments, offer discounts for early payments or start applying late fees - PivoHub allows for different ways to get you paid faster while keeping your relationship with your buyers healthy. Not only will these practices restore peace between you and your buyers, they will help you run your own business operations smoother and more efficiently. All is well in the seller-buyer relationship on PivoHub!
And because we love happy couples, we have a little bonus for you:
Did you know that PivoHubs’s brand new integrated payment feature is already available to you? Click here to learn more!