For many businesses, accounts receivable management and chasing down unpaid invoices are ever-present challenges that have a significant impacts on cash flow. It’s important to take the most efficient and effective approach by leveraging the communication style that’s most likely to drive an impact. Historically, that might have been using the phone to call, but not anymore. Read on to see why an email approach is more likely to get you the results you want: getting your invoice paid.
The Best Time for Action
An email is likely to reach your intended audience at the perfect time to take action - when they are on their computer engaging in work. It’s easy to go directly from email to the attached invoice and then to online payment. On the other hand, a phone call could interrupt them in the middle of another task they will likely return to once they hang up. Will they remember to get to your invoice after returning to their task? Not likely.
According to a study from the American Journal of Psychology, successful recall of information is higher after reading information opposed to “hearing” it. Emailing your debtor details about the services provided and payment instructions means they are more likely to remember that information - and more likely to remember to add paying your invoice to their to-do list. Emailing other key information can also increase the likelihood of recall and payment, including payment terms and any penalties for late payment.
Communicate a Hard Line
Not all of us are brave enough to take a stern tone with a customer. A written email, however, makes it easier. Even if this communication style doesn’t come naturally, you can use collection letter templates that are pre-written to sound formal and firm. Remember to leverage different emails for the various stages of lateness, increasing the stern language as the invoice ages. In addition, it’s always a good idea to draft your email, put it away, and then come back to it to ensure your words and tone aren’t off-putting. Yes, you are communicating something serious, but avoid embarrassing yourself and your company by using too harsh a tone or the wrong words. Another suggestion is to have a colleague read an important, serious email to make sure you’ve gotten your point across, yet haven’t truly offended the recipient.
Business Owners are Busy
Chances are, your payor is as busy with their business as you are with yours. How often are you either near your office line or willing to interrupt your current task to answer the phone? An internet research firm recently found that 62 percent of phone calls to small businesses are not answered. An email will be delivered and read that day.
The “CC” Factor
If your past due client is not the senior-most leader of their company and hasn’t responded to your initial past due outreach, “CC” their boss on your next email, reminding them of the past-due invoice. Chances are, the issue will be resolved quite quickly now that their boss has visibility. There simply isn’t an equivalent “kick in the pants” for phone calls.
Less Time Spent on The Phone
These days, business owners spend less time on the phone, period. According to the NFIB survey of small business owners, they spend less than 15 percent of their day communicating on the phone. If owners are spending less time on the phone, it will be harder to catch them and convey your message, compared to emailing.
Time and People Available?
Chances are, the customer you’re attempting to collect from doesn’t have a dedicated person for AR management or even a specific person to answer phones. According to the SBA, more than 90 percent of all U.S. small business have just 1-20 employees. In addition, a survey of small business owners found they spend 3 hours or less each week on accounting tasks. Ensure you are communicating with the person most likely to manage AR issues. If the delay in payment persists, ask your point of contact if there is someone else at the company you could work with who has more bandwidth.
Email Provides a Call to Action
Emails give you the opportunity to have a clear focus and a prominent call to action, while phone calls, if they are answered, often result in longer periods of small talk that can easily result in stall tactics. How many times have you heard a customer say, “I don’t have it right in front of me, let me take a look and call you back.” Take advantage of email to keep your payor focused on getting their invoice paid.
What has been your experience on best practices between emails and calls? AR managers use YayPay to automate and streamline the successful communication strategies that they have identified to provide the best customer experience regardless of the invoice volume they are facing. What tried and true strategies have you discovered?