Any organization that accepts card payments will encounter a failed transaction at some point or another. For bricks and mortar retail businesses, dealing with this issue is relatively straightforward; either the customer provides another form of payment or they are unable to purchase the goods.
In subscription billing business models, however, the issue of failed transactions and missed payments is a little more complicated. As the customer has already received the benefit of the contract, they are obligated to pay the pre-agreed amount.
Of course, in reality facilitating such payments can be difficult and time-consuming. Recurring billing solutions are often the most effective way to collect these payments and ensure your company receives the funds it is owed.
Known as dunning, repetitive and methodical engagement is extremely successful when it comes to collecting outstanding payments. Effective dunning management uses a variety of techniques to ensure engagement and, where possible, facilitates a continued relationship with the customer or client.
Dealing with failed transactions
The first step to dealing with failed transactions is to avoid them wherever possible! To do this, you’ll want to select the right type of payment transactions for your business. If you’re using subscription billing, for example, gaining continuous payment authority can be a better option than accepting direct debits as they are more difficult to cancel.
However, even if you have continuous payment authority, failed transactions can occur if the customer’s account is empty of funds. In these instances, it’s essential to have effective dunning management in place to resolve the situation.
While some businesses attempt to handle overdue payments in-house, this can require a significant amount of resources. As well as hiring staff to deal solely with collections, you will need to implement effective software and spend a significant amount of time training employees so that they are acting in compliance with the varying regulations governing financial transactions and overdue payments.
As many companies simply can’t devote the resources required to deal with missed payments to the issue, they are left out of pocket. Fortunately, help is at hand. The collections industry collects over 30 million debts in the U.S. every year and successfully makes over a billion customer contacts. As experts in their field, they have the specialist skills, knowledge and tools to facilitate the swift resolution of overdue payments.
Outsourcing your dunning management
Rather than struggling to process recurring payments in-house and dealing with the inevitable consequences of missed payments and failed transactions, you can save time and money by using a subscription billing service provider.
In doing so, you’ll have access to their expertise and dunning management systems and avoid having to invest heavily to setup your own in-house collections department. Furthermore, you can be confident that your dunning management will be fully compliant with the relevant regulations.
To learn more about successful subscription billing and dunning management, talk to Billsby today. Simply contact us at +1 (855) 934-0707 to find out how our specialist subscription billing services can transform your business.