How to set up automatic draft payment and processing systems
It’s tempting to start shopping for a solution to upgrade your invoicing and payment processing. But first, it’s time to overhaul your back-office procedures.
Prepare your workflows and people for the change
Start by appointing someone to completely own this change. If you’re just starting out with automation, a person must create the standard operating procedure (SOP) documents to systemize the work and train others. Or, if you’re upgrading, someone must overhaul the current SOPs and manage the upcoming change.
This person’s job is to assess your business model, industry, and current practices. Then, they’ll draft a proposed “new method” of draft payment administration. This proposal will include who is involved (and what their role and responsibilities are) and when in the customer relationship each event will take place. Finally, they’ll present this new plan to the team and ask for input before implementing the new procedure.
You can enlist an employee for this role, or you can outsource the work to a team that has done it before. Ignite Spot has helped upgrade the invoicing and draft payment processes for many customers in the past. We can share unique-to-you perspectives from experience, helping you capitalize on opportunities and sidestep pitfalls.
One example of this experience is a lesson learned early on: Prioritize the customer’s convenience over your own.
“Making things easier on the customer makes things easier on you,” Robyn says, smiling. “Trust me.”
In practice, Robyn says this means prioritizing the payment info collection step. Position it as early on in your customer relationship as possible.
“The earlier we collect payment and bank information for drafting, the better the overall customer relationship has been — consistently over time.”
Narrow down the options
There are so many AR automation tools today that you may be overwhelmed with choices at first. Here’s how to quickly narrow down the options and find your fit.
Remember, your new processes (established above) dictate what technology you’re looking for — not the other way around. Find a solution that fits those processes. Rule out any contenders that force you to adopt their processes, thus deprioritizing your customer.
Plan to purchase two solutions: one auto-invoicing and one autopayment processing. Auto-drafting requires the combination of these two processes. Many solutions today offer both in one, but in some cases, it still makes sense to subscribe to two separate services and integrate them to work together. Almost all of today’s newer tools integrate with one another, but occasionally, one doesn’t fit, or it creates clunky redundancies. Avoid those.
Another way to narrow down the options is to search for sector-specific tools. There are auto-invoicing and auto-payment processing solutions for every industry. There’s also an option for every business size and maturity level.
For example, most commercial banks offer an ACH draft payment solution. “The bank’s own tool may be perfect for businesses just starting out,” Robyn says. “It’s what we used at Ignite Spot — until we outgrew that solution.” Robyn’s team began feeling that the technology was a bit expensive for the basic features. They also noticed it didn’t integrate well with other tools and wasn’t able to scale with Ignite Spot’s growth. So they upgraded as they matured.
There’s also an auto-invoicing and draft payment tool for every business model. Square’s payment processing is good for small e-commerce stores, local boutiques, gyms, or bakeries. A B2B service provider, on the other hand, will want something more robust and flexible.
To familiarize yourself with some of the features of the most popular tools, check out these:
Adjust and refine as you go
Many of these tools offer free trials of their premium plans, so give your choices a test-drive before committing. This experimentation can be unnerving with actual customers, so set up dummy accounts for this purpose if needed.Collect feedback from your team members to learn what works, what doesn’t, and what you can continue improving to make the payment experience even better for your customers in the long run.