Perhaps the most daunting problem affecting an "it's not all what it is cracked up to be" business owner is a payment that is late or not arrives. Think about the personal school owner who educates a parent concerning the monthly fee simply to obtain this answer: "Just give me a couple more days" Think about a construction firm owner who rightfully seeks a periodic payment by the customer and is dismissed with "I will pay you when I could." Imagine a gym owner who might have to perform back flips just to collect on that monthly payment.
Whether by choice or even necessity, there seems to exist a bandwagon of customers who might not so readily depart with their cash regardless of their responsibility or what is morally right. This lamentable circumstance (i.e., once an operator can't efficiently collect cash that is expected) seriously hampers money flow -- a company' lifeline, crucial to its energy. When business expenditures outpace revenues (negatively affected by overdue or non-payments), industrial failure is ensured.
There exists recurring payments in dealing with an undesirable customer whose money remains elusive. Many companies still embrace the collections process -- whether they perform this task in-house or contract with external agencies. In case the company chooses to contact the client directly, bill after bill might be forwarded which is quite labor-intensive and pricey. An owner needs to think about the expense of invoices, postage, overdue notices and set calls, and also the time it takes employees to meet this obligation (and the concomitant cover / benefits such personnel are accruing). Outside collection agencies are not necessarily an advantageous option. They generally maintain at least 25% of an owner's deserved profit.
The second way of handling the cash flow-challenging client is based on the premise that a business owner must be proactive. He/she needs to realize the benefits of automated payments, and how this process can more easily prevent the "Dear client, please cover me" letter.
Automated payments are a vehicle where a customer's account is automatically debited and moved into an owner's accounts on the precise date a payment is due. Upon the decision to obtain a product or utilize a service, a potential customer signs that a simple release form, giving permission to transport payment on a particular due date.
There exists two primary ways when check processing is demanded. 1 alternative is through paper drafts which may be issued via appropriate applications and delivered to the owner so that he can deposit them (like they were paper checks) or delivered directly to the proprietor' bank. The processing company acquires the customers' banking information and converts the information to the appropriate bank draft.