Have you ever wished you could find an business advice column which helped you design easy to use solutions which start helping the bottom line of your business today?
So have we! And that is why we are excited to announce “Rock Your Bottom Line” a new advice column from Laura Joki C.P.C., Business Process Architect, Business/Systems Design Coach & Owner of Rock Your World, LLC in Lincoln City.
Laura has agreed to share her experience and advice in best practices, actions and policies with us to help stabilize and propel sustainable business growth on the Central Oregon Coast.
In her first series, Laura will explore with us actionable items to help you improve your bottom line right away through an in depth look at your Accounts Receivable Flow or how you get the money from your customers pockets to your company’s bottom line.
Rock Your Bottom Line – Strategic Business Advice for Savvy No-Nonsense Entrepreneurs
Steps You Can Take Today to Improve Your Bottom Line
When I speak to clients about my history as a Business Process Architect, upon mentioning Accounts Receivable (A/R) as one of my specialties, quite often I receive, “quizzical dog face” and a following blank expression until it’s explained that Accounts Receivable is a legally enforceable claim for payment or, your customers bill and the process your organization engages in to complete successful collection.
Depending on how your business works, your accounts receivable policies might have your customer pay at the time of service or your company might invoice your customers, expecting payment in an agreed upon time frame after completion of your delivery of goods and/or services.
Today, I will address a few simple changes an additions you can implement easy and with very little additional pain or training. Your first step is to:
Remove Barriers for Payment
What do I mean? Well, let’s do a little self evaluation, grab a piece of paper and write down the following:
What kinds of payment does my business accept? (Check? Credit Card? Paypal?)
What gateways my business provide for payment? (Pay by mail? Pay by Phone? Pay online?)
How available is my business to receive money? (Who can receive payments within your company)
Now, let’s break down your answers:
What kinds of payment does my business accept?
What kinds of payment you accept, communicates to your customer how important their comfort is to you. In a world full of almost limitless both cash and non-cash based payment technologies, I will say to you that if you are not taking all major credit cards and electronic wallet payments (Apple Pay/Google Wallet) you are leaving yourself behind and potentially creating more overhead on the back end with prolonged efforts to collect the full amount due.
Case Study: I was working for a client who refused to take American Express because the processing fee was 1% higher than the other cards, however, their clientele was solely small business, which at the time, many small businesses enjoyed using their American Express for it’s flexible structure. After interviewing their A/R clerk, I learned that many customers asked to use their AMEX card and asked that the company consider accepting the card and they were repeatedly shot down. I asked the A/R clerk how many hours per month they spend pursuing payment on invoices who, IF the company accepted AMEX, the customer would then sign up for Autopay? After learning the answer was over 20 hours per month, I brought that information to the owner of the business. For simple math purposes, the clerk was paid $15/hr so 20 hours would be $300+Benefits/Taxes. Armed with this information, it was very easy to help the owner see that it was a better investment of their clerks time and energy to work accounts which need support rather than track down payments, simply unpaid due to inconvenience on the customers behalf. As well all know, a penny saved is a penny earned and this is paramount in accounts receivable.
What gateways does my business provide for payment?
How you help your customer pay their bill also communicates your businesses beliefs surrounding partnership with a client. Does your business make it easy to accept payments? With emerging technologies and systems to manage money and keep our payment practices secure, it’s important to take a holistic view of your revenue channels.
We are entering an age where more and more often, the act of paying for goods and services is not a person-to-person transaction, we will address both methods for taking payment starting with Hands On or A.K.A. the stuff you pay your employees by the hour for.
For those who use Hands On payment processes (face-to-face or phone):
Who in your organization can accept payment? Answer billing questions? Handle billing disputes? What are their hours? Other duties? Who else is trained? Who has been empowered to resolve disputes? These are all questions you should be asking and reviewing regularly with your goal to be to remove barriers to payment. When someone contacts you so they can pay you, you should be able to accept that payment right away with minimal hold times and NO VOICE MAIL if at all possible. In all transactions in your business, your actions should communicate to your customer that their time and comfort are important.
Now onto Passive Payment Systems (PPS) or what I like to call “Set it & Forget it”
When we start talking about PPS, think of the times you called your utility company and made a phone payment to an automated system or paid a bill online, these are passive payment systems and assist in keeping customers happy and the amount of money you spend collecting the money you are owed to a minimum. Different PPS systems look different but pretty much function the same, your client does NOT have to interact with a human to successfully complete payment.
For example, in my own retail facility, I offer “Interest Free Payment Plans/Layaway Plans” and the way I administrate them through my choice of Passive Payment System, is to send an electronic invoice to my client with a total amount due on the end date of the payment plan and requesting an immediate 25% down payment. Once the customer makes the initial payment, with a one button click I can send reminders to my clients email and they can pay at any time of the day from any online connected device at their convenience. When the bill is paid in full, my system notifies me.
What kind of PPS might be right for your business is unique to the type of business you engage in, setting up one or more ways for your customers to interact with your business through their electronic devices and clearly communicating your new options to your customers will set your A/R system up for success!
Next Step? Who takes and talks about payments in your company and what happens when, something goes wrong? Or right? What if the bill is not ready to pay and the customer has a concern or question? Well, we will tackle that next week.
This article is meant to be general in nature and should not be construed as business, legal, tax or financial advice related to your personal situation. This article is opinion and is provided for informational and educational purposes only. Laura Joki believes the information has been obtained from sources considered to be reliable, but does not guarantee the accuracy of the information provided. This information is not meant to be a complete summary or statement of all available data necessary for making business, financial or other decisions and does not constitute a recommendation. Please consult with a tax/legal professionals regarding your personal situation prior to making any financial/legal/business related decisions. Please note that the information provided may include references to concepts that have legal, accounting, human resource, business regulation and tax implications. It is not to be construed as legal, accounting or tax advice, and is provided as general information to you to assist in understanding the issues discussed. Laura Joki does not give tax, legal, or accounting advice, Laura Joki’s specialty is in business process, customer service and interpersonal relations. Nothing contained herein is intended as a solicitation or an offer to buy or sell any product or service mentioned and they may not be suitable for all persons.
Laura Joki is a Business Owner in Lincoln City, Oregon, has an extensive history as a Business Process Architect and is offering business consulting services. She can be reached at (541) 351-8423 at Rock Your World or via email at email@example.com
Copyright 2017 – Laura Joki
Comments in this report are strictly those of Laura Joki and do not necessarily reflect the views or opinions of NewsLincolnCounty.com, its staff or advertisers. Laura Joki is not affiliated with www.newslincolncounty.com website and is not responsible for any other content posted to this website. (04/17)