Stereotypes aren’t always fair. But it’s reasonable to say that the traditional view of payments professionals is conservative, diligent and process driven. That’s a compliment: nobody got paid faster by making big bets and playing fast and loose with the numbers.
That is why businesses are used to a clear, precise and transactional approach to billing. It’s a process which can be mapped on a flow-chart from start to finish, with a neat timeline from invoicing to thirty days right through to collections or court.
The idea of apparently ceding control to your customers, allowing them to decide when they’re going to pay, therefore might go against everything that’s true and holy in the Receivables canon. Surely it rips up the timeline and surrenders fulfilment of the payment process?
I would argue the exact opposite.
You are surrendering some of the mechanics of payment, but gaining vastly more control over the ideal outcome, the North Star: getting paid.
First, the idea that you had control over the traditional payments process was an illusion. You had one moment of clarity – at 30 days – when a client had either paid or not. Before 30 days, you had no visibility at all. And even at the 30-day mark, you might only then find out that you had made a minor error in the original invoice, and the whole dance starts again. Does that really feel like control?
In the Bluechain world, where a client can nominate their payment date, you have total visibility of the commitment, many days ahead of time, and – because it’s been self-defined – a very high chance of payment on the date promised.
Second, the idea of having control is somewhat dubious in and of itself. The customer can always choose not to pay. They ultimately own the transaction process unless you’re prepared to put in a huge (and uneconomical) amount of legal effort, because business will always fundamentally operate on the underlying currency of trust. When you give customers a “decline” option or the chance to quibble (as Bluechain allows), you’re not ceding control. You’re getting insight which, again, you would previously have had to chase for, many days later.
Third, in the Bluechain world, it’s easy for customers to stick to a payment date. When a bill comes into an SME business, with all the financial pressures they are naturally under, they often won’t want to pay immediately. With Bluechain, they can set-and-forget a payment date – the software does the rest. In the old world, it would sit in a pile of unpaid bills, often unwittingly leading to collections activity which is unwanted, unnecessary and just adds costs to both parties.
The customer was always in control. When we prioritise the outcome rather than the traditional mechanism, we can make transformative advances in experience. We exchange flexibility in the mechanism for the real prize: a smooth and lower-cost payment.
Philip King has 42 years’ experience in credit management and related disciplines. He was Chief Executive of the Chartered Institute of Credit Management from 2005-2020. He also served as Interim Small Business Commissioner from 2020-2021, supporting small businesses in their trading relationships with large customers, particularly in relation to payments.