In exploring what is involved in developing an overall payments strategy, in this article we will look at the third phase of five in total, which is giving customers as user-friendly a billing and payment experience as possible.
Most dictionaries suggest that user-friendliness involves making a customer process as easy to learn and operate as possible. In practical terms, this often boils down to making sure that language is straightforward and unambiguous. In a web site environment, this will mean making sure that screens are clean and uncluttered, and navigation is both speedy and efficient etc. However, when it comes to a relatively uninteresting task such as receiving and paying bills, it is suggested that the key to user-friendliness is clarity, convenience, choice and control. Let’s therefore look at each of these in a little more detail
Clarity
Many organisations confuse their customers by either failing to let them know clearly how payment can be made for products or services supplied, or bury the information in places where it cannot easily be found (or is difficult to understand when a customer does stumble across it). Customers need simple and clear language about where how they can receive a bill and where, when and how they can pay that bill. In a web site, “ways to pay” is often therefore a simple addition (as a page or a tab) especially when they can click a link and make a payment there and then.
Convenience
In general, convenience is something that increases comfort or saves work. When it comes to billing or payment therefore, the offered approach should allow greater comfort (being able to complete the whole task on line, at home, on a mobile etc) or less work (do it quicker, without having to rely on the physical mail, avoid paper-based copying/storage etc). This might also involve a more convenient web site experience (less clicks, more clickable options or deeper/better analysis when needed).
Choice
All customers like to have choices available (whether or not they use them). In bill presentment and payment, this typically means allowing customers to view their bill in flexible ways. In a web site, this might include the ability to view a mini bill or clickable bill detail. On the payment side, choice involves providing different payment mechanisms. We will look at this issue in more detail in step 4 of this series but in summary this should ideally include as many debit and credit side options as possible so that customers can settle a bill in a way that suits them (which they are more likely to do much more quickly when several choices are made available to them).
Control
According to recent research, customers will pay between 10 and 17 bills a month and may not feel that they are very much in control when these arrive at different times in the mail, are chased frequently and may specify few ways for payment to be made. Using online technology to both issue bills and allowed them to be paid flexibly is one way to overcome many of these frustrations and this has other advantages. In an online bill and payment environment, customers can store their bills electronically (and retrieve them when wanted) can calendarise payment to suit them, get immediate receipt of payment (giving the confidence and security that settlement has occurred) and can analyse bill data whenever and however they like. This all helps the customer feel that they are more in control.
In our next article in this series, we will look at the next phase in developing the Payment Strategy- making as much payment choice available as possible to customers.
Tuesday 29 March 2011
Wednesday 23 March 2011
Developing a Payment Strategy-Step 2- Focusing on how to issue bills and invoices in a fast and efficiency way
In exploring what is involved in developing an overall payments strategy, in this article we will look at the second phase of five in total, which is how a business can issue bills and invoices in a the fastest and most efficiency way.
There are few businesses that fail to readily appreciate that when a customer orders a product or service, they expect to have it delivered as efficiently as possible (and this usually means fast). In fact, some organisations even seek to gain competitive advantage by doing this effectively. However, this would be costly unless the invoicing process is equally efficient, so that payment can be collected as quickly as possible. Streamlining the billing process is therefore a critical activity.
There are essentially three options available to streamline the billing process:
First, a business can seek to make an existing manual bill process “flow” more efficiently. For example, this might involve looking at the simplicity of the invoice design or layout, reducing or even eliminating wasteful work tasks, or even further automating the delivery process (such as faster envelope stuffing). Although this may help considerably, the danger is that these process improvements need to be “locked in” to avoid slippage and the changes may only go a short way in terms of overall improvement from a customer perspective.
A second option is to automate the manual billing process as much as possible. For example, this might involve adopting an email-based invoice delivery process (saving on paper, envelopes and franking (if the customer can be convinced to accept an email as the substitute of course). This can save considerably in direct costs and gets the bill to the customer earlier than the physical mail. However, the business is still delivering paper and may not experience much in the way of faster payment. In fact many organisations find that they end up maintaining both their physical mailing and emailing process (and storing more paper than they did before).
A third option is for a business is to let a third-party specialist billing organisation help to streamline the process. One possibility here is to completely outsource the process of both billing and payment collection. However, a more popular option is to either buy full bill automation software from the third-party (and pay for its maintenance and use) or to use a digital billing service. The latter choice is likely to deliver the most change from a customer perspective. Here, a customer’s bill is made available to view at the third party’s dedicated web site, where they can then pay it by a variety of means (on both the credit and debit side).
Each of the above options needs careful consideration, as all three involve time and cost. However, in terms of savings in direct and indirect cost, option three is likely to be the most efficient and cost effective.
In our forthcoming article in this series, we will look at next phase in developing the Payment Strategy- Giving customers as user-friendly billing and payment experience as possible.
There are few businesses that fail to readily appreciate that when a customer orders a product or service, they expect to have it delivered as efficiently as possible (and this usually means fast). In fact, some organisations even seek to gain competitive advantage by doing this effectively. However, this would be costly unless the invoicing process is equally efficient, so that payment can be collected as quickly as possible. Streamlining the billing process is therefore a critical activity.
There are essentially three options available to streamline the billing process:
First, a business can seek to make an existing manual bill process “flow” more efficiently. For example, this might involve looking at the simplicity of the invoice design or layout, reducing or even eliminating wasteful work tasks, or even further automating the delivery process (such as faster envelope stuffing). Although this may help considerably, the danger is that these process improvements need to be “locked in” to avoid slippage and the changes may only go a short way in terms of overall improvement from a customer perspective.
A second option is to automate the manual billing process as much as possible. For example, this might involve adopting an email-based invoice delivery process (saving on paper, envelopes and franking (if the customer can be convinced to accept an email as the substitute of course). This can save considerably in direct costs and gets the bill to the customer earlier than the physical mail. However, the business is still delivering paper and may not experience much in the way of faster payment. In fact many organisations find that they end up maintaining both their physical mailing and emailing process (and storing more paper than they did before).
A third option is for a business is to let a third-party specialist billing organisation help to streamline the process. One possibility here is to completely outsource the process of both billing and payment collection. However, a more popular option is to either buy full bill automation software from the third-party (and pay for its maintenance and use) or to use a digital billing service. The latter choice is likely to deliver the most change from a customer perspective. Here, a customer’s bill is made available to view at the third party’s dedicated web site, where they can then pay it by a variety of means (on both the credit and debit side).
Each of the above options needs careful consideration, as all three involve time and cost. However, in terms of savings in direct and indirect cost, option three is likely to be the most efficient and cost effective.
In our forthcoming article in this series, we will look at next phase in developing the Payment Strategy- Giving customers as user-friendly billing and payment experience as possible.
Thursday 17 March 2011
Developing a Payment Strategy-Step 1-Appreciating why it is critical to have a payments strategy?
This blog will seek to explore what is involved in developing a payments strategy and in this article we will look in more detail at the first phase of five in total, which is determining why it is critical to have a payments strategy at all.
First of all let’s just define what the payments strategy needs to encompass and then determine why this is so important.
All businesses know that continuing revenue or positive cash-flow is their “life-blood” but few of these have a strategy or even a loose plan to ensure that this keeps flowing appropriately (by which we mean steadily and at a greater rate than costs are incurred). Revenue (as opposed to money from borrowings or equity) only comes in when a business bills for its products and services to its customers and when it receives payment in its bank account. As a result, the process that is used for up-front billing all the way through to the steps to finally collect payment need to operate efficiently and effectively-and this is not something that you want to simply let evolve (or leave to chance).
Whatever its size, a business should spend just as much time on its Payments strategy as it does on its Marketing strategy or Operations strategy. This is simply because all three of these strategies have to work together in order to be successful. Marketing and Sales create demand and get customers to buy in the first place (and will usually spend up-front money in doing so). Operations will fulfil the demand by delivering goods and services (once again spending money to do so). Finally then Accounting and Finance are charged with collecting money from customers, but need to do so in the best possible way (with as much choice as possible) and fast enough to ensure that money is well managed at all times (however seasonal or “lumpy” sales might be).
The first step in developing a Payments strategy, that balances all of the above well, is to understand the full billing to payment cycle. This cycle typically includes: preparing the invoice, issuing the invoice, offering payment channels, taking different kinds of payments, reconciling payments to invoices, banking payments and accounting for the whole payment transaction. In addition to these 7 core steps it might also include, tracking invoice and payment progress, dealing with queries and complaints and producing analysis and reports on payment transactions. Every one of these steps is a significant process by itself and therefore needs to operate smoothly on a stand-alone basis and as part of the overall process. A good Payment Strategy will therefore seek to specify how this can best be done at each step and in an overall manner.
In our next article we will look at the next phase in developing the Payment Strategy- how to issue bills and invoices in a fast and efficiency way.
First of all let’s just define what the payments strategy needs to encompass and then determine why this is so important.
All businesses know that continuing revenue or positive cash-flow is their “life-blood” but few of these have a strategy or even a loose plan to ensure that this keeps flowing appropriately (by which we mean steadily and at a greater rate than costs are incurred). Revenue (as opposed to money from borrowings or equity) only comes in when a business bills for its products and services to its customers and when it receives payment in its bank account. As a result, the process that is used for up-front billing all the way through to the steps to finally collect payment need to operate efficiently and effectively-and this is not something that you want to simply let evolve (or leave to chance).
Whatever its size, a business should spend just as much time on its Payments strategy as it does on its Marketing strategy or Operations strategy. This is simply because all three of these strategies have to work together in order to be successful. Marketing and Sales create demand and get customers to buy in the first place (and will usually spend up-front money in doing so). Operations will fulfil the demand by delivering goods and services (once again spending money to do so). Finally then Accounting and Finance are charged with collecting money from customers, but need to do so in the best possible way (with as much choice as possible) and fast enough to ensure that money is well managed at all times (however seasonal or “lumpy” sales might be).
The first step in developing a Payments strategy, that balances all of the above well, is to understand the full billing to payment cycle. This cycle typically includes: preparing the invoice, issuing the invoice, offering payment channels, taking different kinds of payments, reconciling payments to invoices, banking payments and accounting for the whole payment transaction. In addition to these 7 core steps it might also include, tracking invoice and payment progress, dealing with queries and complaints and producing analysis and reports on payment transactions. Every one of these steps is a significant process by itself and therefore needs to operate smoothly on a stand-alone basis and as part of the overall process. A good Payment Strategy will therefore seek to specify how this can best be done at each step and in an overall manner.
In our next article we will look at the next phase in developing the Payment Strategy- how to issue bills and invoices in a fast and efficiency way.
Wednesday 9 March 2011
Developing a Payments Strategy
Over the next 5 weeks, this blog will seek to explore what is involved in developing a payments strategy for any commercial enterprise of pretty much any size. Although the strategy may alter somewhat at the detailed level, I will argue that the approach to be taken is a common one and essentially involves 5 steps. These are:
1. Determining why it is critical to have and maintain a payments strategy
2. Focusing on how to issue bills and invoices in a fast and efficiency way
3. Giving customers as user-friendly billing and payment experience as possible.
4. Making as much payment choice available as possible to customers
5. Building a seamless payments process
Within each of these steps there is a mini-process that it is valuable to follow with the idea that at the end of the five steps, a fully tailored and well-planned payment strategy can be evolved and then implemented.
In some cases, a senior executive in a given organization or a senior manager in finance perhaps will only need to make minor adjustments to current practice, or merely add a few extra steps or approaches to optimize the system already used. However, in other cases the development of a full payments strategy will indicate a much more substantial overhaul and implementation of the billing and payment system and changes will need to be carefully planned. In either of these two extremes, we’ll examine the major considerations and offer some specific advice in terms of options. It should be noted that there is lots of third-party advice available in the market on this subject, much or which is freely provided. As a result, making changes for the better (at least to some degree) is within the scope of any company in this important area of business operations.
In next week’s blog therefore look out for the first in the series-the determination of why it is critical to not only have a payments strategy but to keep it up-to-date and to monitor its success over time.
1. Determining why it is critical to have and maintain a payments strategy
2. Focusing on how to issue bills and invoices in a fast and efficiency way
3. Giving customers as user-friendly billing and payment experience as possible.
4. Making as much payment choice available as possible to customers
5. Building a seamless payments process
Within each of these steps there is a mini-process that it is valuable to follow with the idea that at the end of the five steps, a fully tailored and well-planned payment strategy can be evolved and then implemented.
In some cases, a senior executive in a given organization or a senior manager in finance perhaps will only need to make minor adjustments to current practice, or merely add a few extra steps or approaches to optimize the system already used. However, in other cases the development of a full payments strategy will indicate a much more substantial overhaul and implementation of the billing and payment system and changes will need to be carefully planned. In either of these two extremes, we’ll examine the major considerations and offer some specific advice in terms of options. It should be noted that there is lots of third-party advice available in the market on this subject, much or which is freely provided. As a result, making changes for the better (at least to some degree) is within the scope of any company in this important area of business operations.
In next week’s blog therefore look out for the first in the series-the determination of why it is critical to not only have a payments strategy but to keep it up-to-date and to monitor its success over time.
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