BILL.COM BLOG

Hey, did I get paid? Efficient Ways to Track Customer Payments

Customer Payments

It’s time to get paid!

That’s right—you sent your customers their monthly invoices. Soon, you’ll be collecting ACH payments, eChecks, paper checks, EFT transfers and more to bolster your cash flow and keep your company flourishing.

Now, here's the rub. How do you track which customers have paid…and which ones haven’t?

On the surface, it seems like a problem you can solve simply. You reconcile each incoming payment with each customer and invoice number. That may work if you only have a handful of invoices (maybe 10 or 20) each month. But if you’re replicating this effort over hundreds of invoices each cycle, this can prove a formidable and time-consuming task. Many businesses don’t have an unlimited amount of people power or hours to dedicate to this effort.

So how can businesses easily track customer payments? The good news is, you've got options! And Bill.com is here to break the process down and prove how bookkeeping automation can give you back your most valuable resource—time.

Why is it so hard to track customer payments?

If you’re using paper, the act of tracing payments is immensely complicated. You mail the invoice and wait for the customer to receive it. They review it and cut a check (which can take weeks or longer), then mail it back to you. If they don’t note what invoice the check applies to, you must hunt through customer information to associate the right payment with the correct account and invoice number. Then, you must manually note in your accounting software that payment was applied, make a bank run, deposit the check and wait for it to clear. This process can take weeks or even months to complete. And it can bleed over into other payment cycles, making it hard to determine how much has been paid and what’s due over time.

The same complications can extend to electronic payments. If you aren’t using an AR solution, you may receive invoice payments through the company’s bank or payment portals. Then, you must ensure the payment is applied to the proper invoice and noted in your accounting software.

These two scenarios relate to receiving payments. What about the times when you don’t have payment? Can you easily track which payments have been received and which ones are pending? Can you tell if the customer has even received the invoice? If you can tell the customer hasn’t paid, then you initiate another time-consuming task of reaching out, inquiring about payment, making a note as to progress, and continuing to wait for the money to arrive.  More importantly—if a customer reaches out to you with questions, that can vastly slow down the payment process if your response isn’t timely and tracked for future reference.

Make it easier to track customer payments.

Take these two steps to monitor customer payments efficiently:

1. Ditch the paper and move everything online, including invoices and payments.

2. Adopt a solution that provides essential features to streamline and automate the AR process.

Goodbye, paper invoices and payments.

Online invoicing and payments provide unprecedented transparency into the payments process—much more so than paper. Sure, it can save you resources, time and money (less paper and postage, less time to print invoices, less time  waiting, etc.), but more importantly it provides a higher level of transparency into the status of customer payments.

Hello, cloud-based AR.

You can send invoices electronically on their own. Perhaps you create them in Word and then email them out manually to customers. It’s still an improvement over paper invoicing and payments, but it still lacks real-time information and reporting when you rely on a manual process.

If you adopt a cloud-based AR solution (such as Bill.com), you’re arming yourself with a higher level of intelligence when it comes to tracking customer payments. You create a digital, easily accessible history of invoices, payments and documents. The solution also offers you advanced ways to track payments, including:  

  • A branded, online payment portal where customers can review their invoice. After invoice creation, a protected link is sent electronically to your customer. They then access the portal (only pre-authorized individuals can do so) to view the invoice. The portal allows customers to interact with you. They can enter questions into the portal screen. You receive a notification and can respond in seconds or minutes. The conversation is preserved for later reference.
  • Added transparency. Not sure if the customer has received the invoice? With Bill.com, you can find out if it has been viewed by the customer, along with the date and time this occurred.
  • The pathway to consolidated digital payments. When a customer views the invoice, they have the option to pay by pushing a button. The payments, whether they are ACH, EFT, eChecks, credit cards or more, are immediately associated with the correct account and invoice number and quickly land in your banking account.
  • Reporting on payments and outstanding invoices. Bill.com opens with a dashboard that highlights recent payment activities for both incoming and outgoing. You can also create a report that will list all outstanding payments.
  • Automated reminders. Bill.com will monitor payment statuses on invoices and automatically send a reminder if payment is not received within your predetermined time frame. You no longer have to dig through files and disparate payments to determine who has paid and who hasn’t. And you certainly don’t have to set hours aside for phone calls or personal emails to remind customers yourself.
  • Recurring invoices. This is the gold standard of AR. If your clients owe the same amount every month (or quarter or year), Bill.com will automatically send an invoice on the designated date. You don’t have to do a thing.
  • Recurring payments. Even better than automatically sending invoices is automatically gathering payments. With your customers’ permission, Bill.com will automatically draft an ACH transfer or credit card payment (or whatever mode of payment the customer prefers) for the amount they owe. The money is delivered directly to your banking account and attached to the customer and invoice associated with it.
  • The elimination of manual data entry with integrations. Bill.com integrates with leading accounting software including QuickBooks Online, Xero, Netsuite, and Intacct. When a customer pays an invoice, that information is captured and noted as paid by Bill.com and then synced with your accounting software to ensure the information is reconciled appropriately. No more data entry is necessary and you get a more accurate view of AR activities.

Gain visibility and transparency by trimming the complications, time, and effort associated with tracking customer payments. 

Bill.com

Kate Wilson
Social Media Manager, Bill.com
Kate is in charge of all things social at Bill.com. When she's not writing every type of content imaginable, she's drinking strong coffee and debating the use of the Oxford comma with her coworkers.