As a B2B business owner, collecting payments from customers is crucial for your business as it impacts your company’s cash flow and the sustainability of the business itself. However, managing payment collections can be a challenging and time-consuming task. That’s where payment collection software comes in.
In this article, we’ll explore payment collection software in detail, including what it is, how it works, and the benefits it can offer your business.
What is Payment Collection Software?
Payment collection software or debt collection software is a tool that automates the payment collection processes for businesses. This tool allows you to manage AR payments more efficiently and effectively while reducing the risk of errors and late payments.
Payment collection automation usually is a feature that’s included in accounts receivable automation software. This AR software typically integrates with your existing payment system, such as your accounting software to streamline the debt collection process and track them in real time.
How Does Payment Collection Software Work?
The software works by integrating with the organization’s existing accounting software. Users can create automated workflows for sending out payment reminder messages or debt collection notices to customers or clients who have overdue payments.
This can be done through email, text messages, or phone calls, depending on the preferences of the organization and the customer.
Here’s how payment collection software typically works:
1. Integration With Your Accounting System
The payment collection process can be done by using AR automation software. It integrates with your existing accounting software. This allows the software to access customer information and track payment history.
2. Generate and Track Invoices
Payment collection software allows businesses to generate professional invoices and track them efficiently. Create invoices using customizable templates, specify payment terms, and send them to customers electronically. The software also tracks invoice statuses, delivery status, payments received, and outstanding balances, providing real-time insights into the business’s financial health.
3. Automated Multi-Channel Payment Reminders
Payment collection software also has the ability to automatically send payment reminders to customers when payments are due. This reduces the risk of late payments and the need for manual follow-ups. Using Peakflo’s accounts receivable software, you can create an automated workflow to make payment reminders to multiple channels such as email, WhatsApp, SMS, etc.
4. In-App Calling
In-app collection calls are a feature of accounts receivable software that enables businesses to make collection calls directly from within the software interface. This allows teams to place calls to customers without switching between applications. Peakflo’s in-app collection call feature streamline the collections process, improve efficiency, and help businesses maintain better customer relationships.
5. Multiple Payment Options
Payment collection software usually offers multiple payment options to customers. For instance, Peakflo has a self-serve customer portal where customers can clear invoices through different methods, such as online, credit cards, and bank transfers. This will ensure a more convenient payment experience for your customers.
6. Reporting and Analytics
Payment collection software can generate reports on payment activity, including payment history, outstanding invoices, and customer payment behavior. This provides valuable insights into your payment collection process.
In Peakflo’s AR automation software, we have several reports such as invoice status tracking and customer status tracking report to help you understand your customer payment status and behavior, as well as DSO time. Other useful reports include cashflow analytics, invoice collection cohort, aging balance report, and more.
Even you can also customize your own reports! Eliminate spreadsheet frustrations with AI-powered reports. Talk to our expert now!
Benefits of Payment Collection Software
Payment collection in Accounts Receivable Management (ARM) software offers several benefits for businesses, including:
Improve Cash Flow
Payment collection software can help improve cash flow by reducing the time it takes to collect payments. This means that businesses can get paid faster, which can help them better manage their cash flow.
If you use AR automation software, you can monitor your business cash flow in the cashflow analytics report.
Reduce the Risk of Late Payments
Since this collection software can automatically send payment reminders to customers, it can reduce the risk of late payments and the need for manual follow-ups.
Increase Productivity
Reduce man-hours by automating the payment collection process, creating payment reminders, manual data entry, and other time-consuming tasks.
Enhance Customer Experience
Payment collection software can provide customers with a more convenient payment experience by allowing them to pay online and offering multiple payment options.
Improve Financial Management
Payment collection software can provide valuable insights into your payment collection process, allowing you to make data-driven decisions and improve your financial planning.