No More Ghosted Payments: How to Keep Past Due Payments from Haunting Your A/R Organization

The spookiest, scariest problem that accounts receivable (A/R) teams encounter isn’t found in haunted houses or moonlit graveyards—it’s lurking in their payment processing operations. Invoices go out, and A/R team members expect timely payments. However, this isn’t always the case. Many invoices are unpaid and haunting A/R teams—ghosted payments. 

According to a PYMNTS article, nearly 3 in 10 business owners cite delayed payments from customers as a top challenge they are facing in their back-office receivable operations. In 2023, the average days sales outstanding (DSO) for businesses amounted to almost 48 days. And, roughly one-third of payments took at least 60 days to be received.¹

While these phantom payments can send chills down the spine of even the most experienced A/R teams, there is a solution to exorcise the payment ghosts. By implementing an A/R automation solution into back-office payment processing operations, your organization can ensure payments don’t turn into restless spirits.

In this blog, we’ll explore the “why” behind these ghostly ghouls, the treats you can use to keep payments from vanishing, and how to keep payments moving swiftly through your A/R lifecycle.

Understanding Why Payments Ghost Your Business

Ghosted payments can creep up for a variety of reasons including delayed invoicing within paper-based receivable operations, a lack of flexibility across payment options and methods, and even missteps in the customer payment experience. 

Customers today expect the convenience and speed of multiple payment options, paper-based and electronic alike. From contactless online payment options to mobile payment acceptance, and even mailed-in payment options—customers desire the flexibility to pay when they want, how they want. Without these different payment capabilities, your organization might see an increase in ghosted payments.

Treats That Can Keep Payments from Vanishing

To prevent invoices and payments from joining the collections graveyard, it’s important to understand the treat-filled solutions that can help to prevent payment ghosts. 

Proactive Collections

One of the best defenses against ghosted payments is to engage with customers before they vanish from your payment processing operations. By implementing and integrating a proactive A/R strategy into your receivable operations, your business can help to prevent those dreaded disappearing acts.

An A/R automation platform that includes a seamlessly integrated proactive collections module notifies customers of new and outstanding invoices by sending out timely, personalized reminders with a convenient link to an online payment portal. This ensures that customers are aware of upcoming and past due dates. 

Vanishing payments? Not anymore.

Proactive collections solutions also include real-time aging reports that help businesses monitor outstanding invoices and identify potential payment issues across their customer base. By pinpointing customers who are past due, businesses can focus efforts on resolving issues within their collections. 

Faster Payment Methods and Channels

Offering an array of flexible and fast payment options is a key strategy to prevent payments from haunting your A/R operations. Electronic payment options like ACH/EFT and credit/debit cards allow your customers to make payments from anywhere, anytime. Additionally, streamlining paper-based receivables with advanced check processing and mobile check capture solutions allow your organization to automate and accelerate payment acceptance, processing and posting.

Other benefits of offering an array of payment options include:

• Convenience - Customers are able to choose the payment method that best suits their needs, whether that be ACH/EFT, credit/debit card, check, or cash. No tricks, only treats.
• Improved Cash Flow - Payments accepted through an A/R automation platform are processed faster than traditional, legacy methods. This helps your business get paid quicker and avoid payments getting caught in the collections cobwebs.
• Cash Application Automation - All incoming payments are automatically posted to any back-office system, allowing for the entirety of the A/R lifecycle to be streamlined. 

When customers can choose the payment method and channel that best suits their needs, you break the curse of confusion and help to eliminate past due payments from haunting your back-office.

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Ghosted payments don’t have to haunt your accounts receivable operations. By understanding why payments vanish, proactively engaging with customers, offering flexible payment options and leveraging A/R automation tools within your back-office operations, you can keep your cash flow strong and customers happy. 

A/R automation provides the treats you need to keep your payments “alive.” With the right strategies in place, you can prevent payment ghosts from becoming a nightmare that haunts your receivable operations. 

Happy Halloween!

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1.  PYMNTS Report | Need for Speed: Faster Payments Are Key to Businesses' Financial Health, October 2024

2. PYMNTS Report | Tapping AI's Potential for AR Optimization, November 2023