In this series of posts, we will talk about risk when it comes to billing. Each post will cover a specific type of risk and give some ideas of how to mitigate it. Although risk has a negative connotation, it’s important to understand that risk includes both the intentional and unintentional actions of payers.
Risk comes in many forms, and your business may be more susceptible to some forms over others based on things like your vertical, how your product is delivered, what payment methods you offer, etc.
The most important part of understanding risk is to start simple with a definition. When we say the word “risk” at Paid, we are referring to the chance that you will not be paid. And by extension from this definition, it becomes clear that there is always a non-zero chance that you will not be paid. Simply put:
All billing has some sort of risk.
Most people think of risk as fraud, untrustworthy customers, or customers that misrepresent their ability to pay bills on time. These all are real factors, but as mentioned, there is also unintentional risk. It can come in the form of banks rejecting charges, typos on checks, or customers simply forgetting to pay.
This series of “Managing Risk” tries to enumerate both the intentional and unintentional risk factors for billing. We’ll chat about how risk creeps in but also how you can keep it at bay. Often the solutions are a mix of testing and iteration, but more often than not there’s more than one way to beat risk.
“Beating risk” means that we have a way to track progress. Given that there are many forms of risk, there will be various things we will need to measure. Throughout the series we will also talk about metrics to track, tools you can use or build, and ways to measure risk. The goal should be to have a (hopefully declining) graph to show how all our hard work is paying off.
So let’s leave this overview here with one simple goal: The “Managing Risk” series strives to reduce your billing risk through enumerating various factors and mitigation tactics. Unfortunately, we can’t promise we will eliminate risk entirely, but our goal is to help you making risk in your billing a negligible factor.