How To Collect Payment from Customers?

28 March, 2024

A business needs to generate revenue to be successful. The primary revenue source for most businesses is their sales. After a conversion, you need to stay on top of collecting payments from your customers. Undoubtedly, you want to collect payment while also maintaining a positive customer experience. Here, we’ve put together ways you can collect payment from customers in exchange for the products or services.

How to collect payment from customers

Here are positive ways you can collect money from your customers:

• Collect payments from customers up front
  
  You can collect money from your customers before offering them the product or service they want. This way, you can avoid the hassle of sending an invoice later and following up with the customer to make the payment. If you're selling your product online, you can add a 'buy now' button where the customer themselves can make the payment in full.
  
  Note that not all customers will be onboarding the idea of paying in full before getting the product or service they ordered. In such cases, you can request them to make partial payment. If you face troubles in collecting the balance payment later, at least you would have collected some money from the customer.
  
  

• Communicate payment terms in advance
  
  It would be convenient for the customer to agree to your payment terms well in advance. Let the customer know how you would like to receive the payment, be it online money transfer, cheque payment, or other payment means.
  
  You must inform the customer the period after service, after which you will send the invoice. You must also inform them the due dates for the invoice payment. Any taxes, late payment fees, etc., must also be communicated before offering your services.
  
  

• Offer multiple payment modes
  
  This is one of the effective methods for when you want to collect payments from customers. For instance, maybe your customer is not adept at online banking and would prefer cheque payments. Other popular payment modes you can offer are payments via Debit Card, Credit Card, NetBanking and Unified Payment Interface (UPI). This way, your customers are more likely to pay you on time.
  
  

• Offer financing solutions
  
  You can allow the customer to pay in instalments over a fixed tenure. For example, instead of paying a ₹1 lakh invoice amount, your customer can pay ₹20,000 for five months. This way, customers have an easier time paying and they are less likely to avoid payments.
  
  

• Pre-authorise transactions
  
  Pre-authorisation makes it easy for you to collect payments from customers, especially for hotel and restaurant businesses. Pre-authorisation refers to a tentative hold that a merchant can place on a customer’s Credit Card. During the pre-authorisation period, no amount is charged. The payment amount is simply reserved and the equivalent credit limit on the Credit Card gets blocked. When it’s time for the customer to finally pay, you can convert the reserved credit limit into a Credit Card charge.
  
  

• Send follow-up emails
  
  It’s not always that the customer is avoiding payments. If the customer has not made the payment by the due date, you can consider waiting a few days. After a few days have passed, you can send a reminder via email or through automated reminders usually built in the invoice-making software.
  
  

• Reconsider the client relationship
  
  After all your efforts to collect payment, the client may still ignore you in order to avoid the payment. You may want to consider terminating your relationship with such customers. Instead, you can invest your time and effort into customers that truly value you and pay you on time.
  
  

Ensure timely payment collection with HDFC Bank SmartHub Vyapar 

With the SmartHub Vyapar app, you can track and collect your customer’s outstanding dues using the ‘Pay Later’ feature. You can send reminders to your customers of the payment via messaging apps. The SmartHub Vyapar app lets you check the transactions received across all modes of payments in a single view. Subsequently, you can make timely payments to your vendors, pay for utilities and cover other business costs.

Download the HDFC Bank SmartHub Vyapar app to access simple solutions for all your business needs.

*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.