No matter what the industry, late payments from customers will always be a problem. They might not have enough money to pay, or they may have simply forgotten. Regardless, customer delinquency compromises your cash flow and significantly affects the bottom line.
This is no different for utilities companies. You probably have several accounts that are constantly behind on their payments. A few are manageable, but if there are too many, it is definitely something worth looking into.
But, how do you reduce delinquency rates without destroying the customer experience? Nobody likes the collection process. If you want to keep that account, it’s important to be careful with what strategies you use.
The Key to Lower Delinquencies
A good first step is to invest in professional utilities billing software. Comprehensive billing solutions have a variety of features, such as account management, tracking, automatic reminders, and statement generation. Banyon Data Systems explains how this accomplishes several things:
- You streamline the entire billing process, so nothing slips through the cracks. No more forgetting to follow up on accounts for weeks at a time.
- Customers get regular reminders and detailed billing information ahead of time. This reduces the likelihood of them forgetting or being unable to pay their bills.
- Providing alternative payment plans tailored to different customer types is also an effective measure. You can manage these with software.
- Having an online payment model is all but necessary in this age, and specialized accounting software can massively simplify this.
Your focus should be on making it as easy as possible for the customer to pay you. Provide multiple options, send them regular statements and reminders, and remove unnecessary steps.
As a final resort, you can also offer chronic delinquent accounts a settlement. This is usually more profitable than going through collections anyway, and it lets you part with the customer on relatively good terms. They may re-enroll in the future, or refer people to your company.