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the opposite of best practices in payment and collections_edited_edited.jpg

Best practices are words that are overused and often opinion-based as compared to referencing an acknowledged industry-wide method.

This article looks at the opposite of best practice calling out substandard practices in the payments and collections function using common sense as the frame of reference. 

The term "best practice" is overused and often not widely understood. In the business world, signifying the most efficient and effective way of accomplishing a task or achieving a goal, is based on repeatable procedures that have proven themselves over time.

In contrast, the opposite of best practice, often referred to as "worst practice," involves approaches, methods, or procedures that are inefficient, ineffective, outdated, or potentially harmful to the organisation's operations.  

This discussion delves into the characteristics and consequences of not good.

Lack of Automation 


One of the most glaring examples of poor practice in enterprise payments is the mismanagement of data and a reluctance to embrace automation.

More than a quarter (27%) of the Australian SMEs surveyed have experienced costs blowing out because of disconnected digital tools, and across Australian businesses approximately $1.4bn is being wasted each year on unused digital tools.


As we race headlong into the age of Artificial Intelligence where data is king, failing to accurately capture, verify and process can lead to significant inefficiencies and errors. Manual processes, commencing with manual data capture via paper-based or static online forms are prone to human error. Incorrect data or data not provided slows down operations and increases the risk of discrepancies, fraud, and non-compliance with regulations.  


Worse still, if you go to the beginning of many customers' payment journey – the onboarding phase, these issues can lead to customer dropouts and churn. Completely avoidable and catastrophic for any business. This contrasts sharply with the opposite, which advocates for the integration of automated systems that streamline data management, reduce errors, and improve operational efficiency.  

Poor communication in payment and collections

Poor Communication 


Effective communications are cornerstones of any successful enterprise function. The lack of clear, concise, and timely communication across the entire payment journey, is textbook poor practice.


Communication breakdowns can quickly escalate into something much worse for both the customer and the service provider. Misunderstandings and limitations because of legacy systems, processes, and technical debt delay the timeframe to payment success and damage relationships placing customers at risk, requiring effort to recover from.


Best practices encourage regular, transparent communication in both proactive and reactive forms as part of an overall communications strategy. 

Ignoring Customer Experience 


In today's competitive marketplace, just about all of us acknowledge that customer experience is paramount. Ignoring the customer’s experiences within the end-to-end payment process is a significant misstep.


Practices that inconvenience customers and introduce unnecessary friction such as complicated payment procedures, lack of payment options, aggressive collection tactics, and lack of understanding of a customer's payment hesitance can erode trust and loyalty, potentially driving customers to competitors.  


A survey by PayPal in 2020 found that 42% of Australian consumers have abandoned an online transaction because their preferred payment method was not available. 

Conversely, a focus on enhancing customer satisfaction through convenient, flexible, and respectful interactions, seeking to solve the issues that the customer is faced with, improves all customer satisfaction KPIs, increases cash flow, and requires less effort to perform the function. 


Inadequate Risk Management 


Failing to stay abreast of and comply with relevant regulations, such as:

  • Anti-money laundering (AML) laws

  • General Data Protection Regulation (GDPR)

  • Payment Card Industry Data Security Standard (PCI DSS)

provides no advantages. Neglecting these areas can expose the organization to legal, financial, and reputational risks.  


Best practices entail rigorous compliance with regulatory requirements, robust risk management strategies, and regular audits to ensure ongoing adherence to standards. Compliance, especially from a PCI perspective goes a long way to alleviate the natural reluctance customers have with making payments over the phone or online using tokenisation leading to operational efficiencies. 

Sticking to outdated methods out of comfort or fear of change puts the organisation at a c

Resistance to Innovation 


Any resistance to innovation and continuous improvement is a hallmark of poor practices in any business function. It will likely show itself as the payment and collection function being out of alignment with enterprise strategy, as it applies to growth, service, product and digital pillars. It also appears as a reluctance to adopt new technologies, a focus on the payment and not the customer, the creation of payment siloes and below-standard customer metrics. 


Sticking to outdated methods out of comfort or fear of change not only hampers operational efficiency but also puts the organisation at a competitive disadvantage. Best practices, on the other hand, emphasize the importance of embracing change, investing in new technologies, and fostering a culture of continuous improvement and in turn providing the opportunity to transform what may have been an operational problem into a sustainable competitive advantage. 




Adhering to poor practices provides no advantage, can be multifaceted, and can significantly impact an organization's bottom line, reputation, and operational capacity. Financial losses due to errors, fraud, data breaches, and inefficiencies; regulatory penalties and legal issues arising from non-compliance; damaged customer and vendor relationships due to poor service and communication; and missed opportunities for growth and improvement are just some of the potential outcomes. Ultimately, these practices can erode the organization's competitive edge, reduce profit, and restrict long-term viability.  



Keeping to the theme of the article, I wonder whether we have got it all wrong when we seek to understand how good we are by assessing ourselves against what could be an arbitrary best practice model. Maybe we would be better served by staying in this inverted mode, developing a point of view around how bad we are, and using common sense as the assessment instrument! 


Either way, the payments and collections functions of most organisations have improvement opportunities. If we bring it down to basics by focusing on removing the impediments for the customer to pay and making it easy for them to do so and the same for the collections function to do their jobs well and in a compliant manner, best practice won’t be far away! 




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