Most companies are quick to resolve payment issues on a case-by-case basis but solving these issues more holistically through delinquency root cause analysis is more effective and efficient in the long-run. This proactive approach to accounts receivable management isolates the most common delinquency factors, so businesses can take the necessary steps in resolving them. While delinquency root cause analysis solves some of your immediate accounts receivable issues, it can also improve other crucial areas of your business, like customer satisfaction and resource allocation.
Solve billing issues for good
You can’t control whether a customer has the funds to pay you, but you can address internally-driven accounts receivable management issues that impede speedy repayment like late bills, unclear terms, or hard-to-read invoices. These simple but often overlooked factors are very common and often cited by customers. These internal issues can push your bill to the bottom of a customer’s to do list and decrease your wallet share, especially if resolution requires a call to your customer service department. It’s simple, really: The easier you make it for customers to understand what they owe and when it’s due, the more likely they are to pay you back on-time and in full.
Improve Customer Satisfaction Levels
Once your delinquency troubles are remedied, you can begin focusing on other relationship-building initiatives for your customers. The process it takes to discover and implement the changes discussed in #1 can hold more value for you than just its immediate revenue outcomes. To uncover the friction points impeding payment, most companies conduct customer satisfaction surveys and leverage technology to identify patterns in customer speech and behavior, like their most frequently asked questions. As you learn more about your customers, you’ll discover more than just what it takes to resolve payments quicker. You’ll better understand the demographic makeup of your customer base and what attributes matter most to keep them happy, which you can use to improve your offerings and service performance.
When you take the time to analyze and address customer issues, you’re making an investment in growing your business. The short-term goal may be to get more money in your pocket quicker, but it requires a long-term companion goal of improving customer loyalty. The more satisfied a customer is with your products and services, the more likely they are to pay their bill or recommend you to friends and family. Reoccurring billing confusion and long hold times do not beget loyalty but demonstrating that you understand the customer’s viewpoint, respect their time, and are actively trying to resolve their issue quickly and permanently does.
Reduce Operational Costs
Tracking down payments can be a major drain on your personnel and answering the same invoice questions can slow down your customer service center. Reducing the number of delinquencies in a long-term, strategic manner increases efficiency while reducing spend in some operational areas over time. This frees up cash to invest in other areas of your business, like multi-channel support to drive even higher customer satisfaction or marketing to acquire new customers. It’s one of the reasons why this approach is recommended by forward-thinking first party outsourcing vendors and customer service agencies.
If you’re still trying to cure issues on a case-by-case basis, you could be wasting a lot of time and resources. Figuring out that’s preventing on-time payments is only one use of delinquency root cause analysis. This process is a great starting point for building a culture of continuous improvement for your organization. By taking advantage of delinquency root cause analysis, you’re able to learn more about reoccurring issues and quickly identify the most effective and impactful remedies for your business’ and customers’ unique needs.