Payment delays have been a huge problem for Indian MSMEs since a long time. According to an Economic Times Report, 31% of the MSMEs say that their payments are usually delayed by 90 days or more. While trading on credit is done to gain trust and assist in long term collaboration, we cannot ignore the delay in payments by the clients that incur a huge loss for a lot of freelancers and organizations because they lose revenues, time, energy and peace of mind. If your business is partnered with other businesses or freelancers, they also need to be paid.
Overdue B2B invoices are a very subtle problem in the country, especially in the small and medium businesses (MSME’s) and we need to analyze and find out a solution to it and save the day. Facts state that on an average an Indian MSME spends 3 hours per week chasing late payments.
Healthy cash flow in the business is very important when it comes to maintaining or getting new resources, whether it is machinery, technology or human resources. When you have worked and put so much effort into getting the work done on time, then you definitely deserve a timely payment.
Why do businesses even work on credit or accept late payments?
Offering credit or allowing late payments to customers becomes necessary to remain competitive in the marketplace. If competitors are offering credits to gain a customer base, you as a business owner eventually end up taking the same risk. Sometimes, Indian businesses also work on credit to increase sales by making a product or service available on credit while the competitor is refusing to do so. Credit offerings are also made to customers to indicate that you respect and trust them to pay their bills on time and before their due dates. This helps in building customer relationships and loyalty. However, MSMEs in India are worst hit by this evil of offering credit and accepting late payments to customers.
Late payments can be avoided by clarifying your expectations since the time you start doing business with them and make sure there is nothing pending from your end. But even with these preventive measures, late payments are sometimes inevitable.
To reduce the delay in payments, businesses often send reminders to their customers. Deciding the timing and frequency of reminders is essential so that the customers do not get flustered. Obviously, no one would like a text or an e-mail to disturb them in the middle of a Sunday evening with family, or in an important meeting, or in every 6 hours. When reminders are sent manually, there is a risk of human error like forgetfulness, grammatical error and wrong timing of sending the reminders, etc. Considering such drawbacks and challenges with manual payment reminders, there is a need for automated payment reminders.
What is the usual process of manual payment reminders?
After a long month of hard-work and meeting client deadlines, your favourite part of the month comes – The payday by the client!
- You’ve hit that “send button” on the e-mail containing the Invoice and you wait for 1-2 days.
- There is no response from the client.
- Then you send them a gentle reminder on the third day, wondering why they haven’t acknowledged the mail yet. There’s still no response.
- You wait for another 1-2 days and re-send them the mail with the Invoice thinking that they haven’t received the mail.
- Unfortunately, there’s still no response yet.
- After a week, you finally call them up and ask for an update and they reply that they forgot to make a payment.
- Then there are certain issues in terms of the payment mode etc. After all the running after the client and checking the mail for a reply every minute, you get the reward you had been waiting for after a long patient wait.
Does it sound relatable? Sadly, this is a sad saga for a lot of MSME businesses in India.
Easebuzz Easycollect Automated Payment Reminders
Automated Payment Reminders like Easebuzz Easycollect reduce manual follow-ups and reconciliation and allow you to customize e-mail and SMS content for follow-ups at the click of a button. You also get real-time payment updates and you can manage all the payment-related activities from a single dashboard. Automated payment reminders make digital payment easy and the 7-step process converts into only a 3-step process: Login, Set payment automation and recieve payment.
In addition to automated subscription billing, Easebuzz Easycollect automated payment reminder also markets your products and services with invoice details auto-generated to your customers. Easycollect is an API driven software that can integrate and read values from your own software and sends payment links with reminders on its own. There is no manual effort to generate links for your product. With the usual payment link generators available in the market you have to manually create and disburse links to your customers to collect payments. With Easycollect it is auto-generated and response to payments is also sent back from our server to your server without any manual efforts. That’s why it is preferred over any normal payment link solution in the market.
All kinds of payment modes like debit cards, credit cards, Netbanking, Ola postpaid, wallets, EMI and Debit + ATM work with Easycollect. The software is absolutely free with no set-up charges. You will be charged only for the payment gateway charges. So, sign-up and register with Easycollect for hassle-free payments.