Collections Management: #7 Common Mistakes during Payment Collection

Collections Management: #7 Common Mistakes during Payment Collection

Payment collection may appear straightforward in most cases. Still, as your customer base expands and transaction volume increases, it becomes clear that even small inefficiencies can lead to delayed payments, increased support load, or even revenue loss. When businesses overlook the finer details of the payment journey, from invoice to checkout to failed payment recovery, the impact shows up immediately in cash flow.


Here are some common mistakes businesses make in their payment collection process, and how Zoho Billing helps bridge those gaps with a structured, automated, and predictable workflow.

Keeping the Long Payment Process

A common issue occurs when customers receive invoices with no clear path to pay. They often ask, "How do I pay for this invoice?" or "Do you accept UPI or cards?" When the process involves multiple steps, searching for bank details, asking for links or navigating through some confusing pages, payment gets delayed or abandoned.


Zoho Billing offers a one-click payment pathway through the hosted pages, a payment link, showing a clickable payment option on the invoice PDF, QR codes, etc. Customers can choose cards, UPI, net banking, PayPal, or direct debit and complete the payment instantly in a much more frictionless way.

No Proper Follow-up

Payment failures happen for many reasons. It may be due to an expired card, insufficient funds, or gateway issues. Without automated retries or clear communication, business risk misses revenue opportunities.


Zoho Billing addresses this through comprehensive dunning management, including automated retries, custom retry intervals, email notification and on-demand retry options. You can pause or resume dunning and communicate clearly with your customers about the failure.

Common Collection Strategy

Every customer behaves differently. High-value customers may need a lenient retry cycle, while smaller plans may require a more assertive approach. Using a universal strategy results in preventable churn.


Zoho Billing offers multiple dunning rules that let you tailor retry logic, intervals, and communication templates based on subscription, plan, customer, value, or currency. Each rule is executed according to its priority, ensuring the correct recovery strategy for the appropriate account.

Losing Customer During Checkout

Checkout abandonment is common when pages are too long, confusing or require excessive information. Customers might say, "I'll finish this later", which often translates to a lost sale.


Zoho Billing improves conversion through self-checkout pages designed for clarity, including single-page checkout, Google-powered address autofill, email validation, captcha support, and a transparent breakdown of recurring and one-time charges. This provides clarity on the purchase and holds precise data, just what the customer needs to know during checkout.

Giving No Free Hands for Trials

Requiring customers to enter their payment method during a free trial creates hesitation about purchasing. It increases resistance during onboarding and results in lower trial conversion rates.


Zoho Billing lets you skip payment collection entirely during trial signups, gathering only essential details and user verification. This reduces initial friction and helps customers get started without barriers.

Recreating Subscription From Scratch

When subscriptions are cancelled due to failed payments, some businesses attempt to recreate them from scratch. This leads to billing date misalignment, duplicate invoices, incorrect proration and inconsistent renewal cycle.


Zoho Billing eliminates this complexity using In-Term Reactivation, which restores a cancelled subscription to "Live" without creating a new invoice or altering the billing cycle. The subscription resumes from where it stopped, maintaining revenue accuracy and lifecycle integrity.

Late Fee Mismanagement

Manual late fee calculation often leads to inconsistencies. Businesses sometimes forget to apply late charges or add them incorrectly, leading to customer disputes or revenue gaps.


Zoho Billing offers automated late fee assessment via a workflow-based custom function and built-in late fee configuration for users. This ensures every overdue invoice is treated consistently without manual intervention.

Considering Customers As Anonyms

Incorrect addresses, outdated email addresses, or missing fields cause payment failures and communication issues. Customers are often unable to update their information during checkout.


Zoho Billing's multi-page hosted pages allow customers to verify their identity via OTP and update their name, address, phone number and custom fields before subscribing. They can also select from saved addresses, ensuring accurate billing and communication.

Payment Collection as a Manual Task

One of the biggest mistakes businesses make is treating payment collection as an isolated activity. Without a structured lifecycle, tasks such as follow-ups, retries, corrections, and reporting become fragmented.


Zoho Billing brings structure to the entire process by managing payment collection before, during and after the transaction. It automates reminders, manages checkout, handles failures through dunning, resumes subscription through reactivation, applies late fee and provides detailed reports such as Payment Failure, Time to Get Paid, Under Risk analytics, etc.

This end-to-end lifecycle approach ensures predictable cash flow and scalable operations.

 

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