There’s no greater feeling for a salesperson than sealing the deal with a new customer. However, this excitement might wear off when the time for collecting payment for the product or service comes. According to this survey of 475 members, 25 percent had trouble collecting payments.
But what if it doesn’t have to be that way? What if some of the customers have simply forgotten about making the payment, and you didn’t remind them on time because you lost track?
What if you’re waiting too long to send out reminders out of fear of coming off as greedy and unprofessional?
Most importantly – what if you could achieve a lot more with your money simply by improving the process of collecting payment?
State your payment terms in writing without any ambiguity
A handshake might be worth a thousand words, but nothing beats getting the terms of the deal black on white. Do not hesitate to write down even the smallest details within your payment terms and think of every possible scenario to make sure you are covered for all of them.
Your agency will probably have a template that can be used in most situations, but some specific travel arrangements will have to include specific payment terms.
It’s very important that your payment terms are written is such a clear manner that the customer can’t get confused about the meaning.
However, the most important thing is that they are easily accessible to your clients. You can do this by attaching an extra document containing the payment terms. Or if you’re using specialized travel software, you can include the payment terms template at the end of every itinerary, invoice or other documents you can easily create within the travel system.
Make sure your payment terms can’t be understood in two different ways.
Determine who owes you money
If your travel agency is dealing with high volumes of inquiries on a daily basis, hopefully, you’re closing a fair share of them which leaves you with many bookings to confirm and invoices to issue.
Depending on the travel business’ unique payment terms, your customers will probably be required to pay a deposit to secure their reservation whereas the rest of the arrangement will have to be paid at a later point in time or possibly in installments.
The bigger the number of bookings, the bigger the number of invoices that need to be paid and the more time necessary to keep all payments on track.
If you are managing your reservations in Excel tables, keeping payments on track will be a time-consuming task requiring several manual steps.
Firstly, someone would have to manually go through all bookings and extract the bookings that are nearing the payment end date or those in which the payment date has been exceeded. Then, they would have to manually send out reminders and notices to the customers who made those bookings.
Tired of doing everything manually?
Increase the success rates of collecting payment with travel software
Keeping up-to-date with payments status is very simple for agencies that are using travel software.
All their customers and bookings are centralized in one place and it is easy to filter out the bookings that are nearing the payment end date or extracting the bookings that are overdue.
Once those bookings are identified, it only takes another click to send out reminders from inside the travel system.
If you want to delegate the task of sending out payment reminders altogether, the travel software can perform this job for you by setting up triggers. For example, it’s possible to set up a trigger such as to send out an email reminder for bookings that still haven’t been paid 15 days after the booking is created in the travel system.
These notices are sometimes referred to as “first contact courtesy notices” or “gentle reminders” and are very efficient with customers who have every intention to make the payment but have simply forgotten to.
Furthermore, it’s possible to set up another one if the booking still hasn’t been paid in 30 days, for example. This notice could state that the due date for payment is nearing and warn the customer about the consequences that might ensue if the payment is not completed on time, such as the cancellation of the booking.
The benefits of keeping track of cash flow
On top of keeping up with unpaid invoices and increasing the chance for collecting payment on time, there is another important benefit that travel software brings to your business.
Within a few clicks in the travel system, the travel agency can receive a financial report that can help predict the future cash flow based on your past booking trends, revenue and expenses in your company.
With insight into the future, your agency can feel more confident about making future investments in your business strategy.