BY JUSTIN HARLEY, VP INTERNATIONAL BUSINESS DEVELOPMENT, ESSENSYS
Part 9 of the free eBook: The Complete Guide to Growing Your Flexible Workspace Business
Cash collection is what all shared workspace operators are working towards. It is the primary objective of your efforts and is what defines how you manage your overhead, reinvest in your workspace and grow your business. What many operators don’t define prior to opening a space is how they will manage the debt collection process or even what it entails.
Payments are collected via credit card, recurring bill payments or autopay. There is more to it than meets the eye. If you prepare well it can be a very simple process, and if not, debt collection can become a monthly recurring obstacle. Here’s what you need to know.
Collect Accurate Data
Securing payment for your services begins with collecting data during the member setup and generating accurate invoices. Streamline the collection process by gathering payment information at the time of services bookings prior to sending the contract or license agreement and the terms and conditions. Give members the option to setup direct payment options via ACH, Credit Cards, Check or POS and tag your customers based on their payment method.
The key to invoice generation is tracking all products consumed from your services marketplace and seamlessly integrating the data into your financial software so that all charges are captured accurately. Generating invoices can be done effortlessly with the right tools. With software automation, you can run payment collection at the touch of a button.
Operators must integrate with payment gateways such as Infintech or Stripe to authorize and process credit card or direct debits to collect payment for your services. As for any other merchant, credit card processing fees are incurred by the operator. This is a cost of doing business that operators often accept in exchange for the best technology capabilities. For example, Stripe has advanced capabilities such as verifying credit card transactions, fraud risks, credit card expiry dates and can function in multiple countries and currencies. Spending cash on these services is positive investment that can result in greater benefits for the merchant operators.
There are newer platforms such as RentShare that charge the customer a fee rather than the operator, much like a broker would charge a tenant. Direct debit or ACH transfers allow operators to collect payments without incurring a charge from the processing gateway. Once payment information is stored in your system and your members are signed up for credit card or recurring payment, and a secure environment is established to process the transaction, you can run collections in one batch. Automatic payments reduce debt risk and increases the speed with which you can collect payment for your services
Protect your credit risk, business integrity and private customer information with PCI compliant tools and integrations. This means that your business is meeting the data security standards set forth by the Payment Card Industry for accepting, processing and transmitting payment information over a secure environment.
If dealing with unreliable customers, enable a point of sales system from which customers are forced to pay for services on the spot. This ensures cash collection and reduces your debt risk.
Having the ability to report on debt payments or credit charges and other business insight is almost just as important as being able to run a batch of credit cards. The mechanism with which operators match the cash collected to the invoiced amounts must be as efficient as possible.
This expedites identification of bad debts or repetitively faulty customers. Advanced reporting capabilities lends business insight that helps to guarantee you are collecting the amounts owed to your business.