Recurring payments are the source of recurring revenue, and in time payments maintain this revenue flow. Nothing can harm a subscription-based business more than late regular payments. Late recurring payments can affect the whole business process and can slow down its speed. If you want to lead the subscription business market, it is crucial to control the delay in the payments.
But how would you do that? In this article, you will find some workable ways to avoid late recurring payments.
Steps To Avoid Late Recurring Payments
1. Accurate Invoicing
Invoicing errors affect not only the flow of your recurring revenue but also the customer relationship. Just think yourself in the shoes of the customer. It is annoying that one is willing to pay his recurring fee, but the errors in the invoice will make him contact customer support or opt for other means to rectify the mistake in the invoice. A single mistake in the invoice can slow the payment process. If you want your recurring charges in time, then you need to generate accurate invoices.
2. Dunning Management
Dunning is the process of contacting and communicating with the customer in case of payment failures. You need an efficient recurring payment system that can notify you whenever the payment fails. Not only that, the system should support the action that you would need to deal with payment failure. Many recurring payment systems do not allow customers to retry and enlist such customers for late payments. Here automated smart dunning helps a lot.
Many subscription management software offers customers by default dunning email and notification templates. You can use them to communicate with the customer properly.
3. Incentives for Paying the Recurring Charges
Another lucrative way of getting your late recurring payments in time is to offer your customer some incentives. Such incentives will work as a motivation to make your customers pay in time. For example, you can provide a specific discount for those customers who pay their recurring charges first—that way, customers will want to spend their subscription fees as soon as they can.
If the customer got his subscriptions canceled because of payment failure, you could offer them incentives to lure them into paying their subscription charges and getting on board again. Some incentives are specific to certain businesses. If your business niche allows you to offer specific incentives to your customers that can help urge them to pay their subscription fee, then provide these incentives.
. Multiple Payment Methods
Another way to avoid late recurring payments is to offer multiple payment methods. Payment failures occur most of the time when there are only a few payment methods for the customer. His payment fails through a payment method, and your system does not allow him to retry to pay his charges. So, the best way to avoid delays in recurring payments because of such reasons is to offer your customers multiple payment methods.
Other than multiple payment methods, you must have easy-to-use payment methods for your customers. Because sometimes, tech systems and processes become so challenging to use that customers cannot comprehend them. So, offer your customers easy-to-use payment methods.
5. An Effective Strategy to Handle Excuses
Now that you know the technical problems that can cause a delay in your recurring payments. There is this one cause that sometimes becomes the cause of friendly fraud as well. Customers sometimes make excuses to avoid paying their recurring charges.
They will probably tell you that they did not receive the invoice or their payment got failed though they tried to deliver. In that case, you need to have a well-thought strategy. Studying the customer history can help you fight these excuses. And to learn the customer journey, you can also use your subscription handling software that provides you business analytics.
Many subscription handling systems are offering their recurring customers graphical representations of KPIs to get practical business insights. Use these business insights to identify if the concern of the customer is valid or invalid.