Cashflow Masterclass – The Ideal Customer Onboarding Process

As part of our commitment to improving the financial wellbeing of our clients, we are educating business owners on the fundamental principles of cashflow management.

In this article we deep dive into the ideal onboarding process for new customers, why this is important, what to do and how this can impact your business.

This article primarily examines the ideal onboarding process from a financial and administrative viewpoint, there are also however significant benefits for sales, marketing and operations too.

Let’s dive in…

Why is a customer onboarding process important?

An ideal onboarding process for new customers means that the process is standardised and efficient for both your business and your customer. An ideal onboarding experience should help your business identify who you are dealing with, assess financial risk and clearly set out commercial expectations with your new customer.

While a standardised and efficient onboarding process should be a primary concern for all businesses, this is something that is particularly relevant to businesses that offer their customers credit, regardless of whether they are businesses or consumers. And since onboarding a risky customer potentially represents a future risk to your businesses cashflow this is an important and fundamental part of managing your cashflow.

Onboarding is a critical point in the customer experience journey that often sets the tone of the relationship moving forward. If the experience is sloppy and poorly managed the customer may well take that as a sign that your business will also be sloppy and poorly managed when it comes to chasing overdue invoices. If that customer then becomes financially distressed they may well prioritise payment of other creditors ahead of you.

As a critical point in the customer experience journey, a well-executed and well-designed onboarding process will lead to reduced churn. By shortening the time from sale to onboarded, eliminating unnecessary steps and avoiding errors in processing your customer will be more likely to follow through with the process.

If your onboarding process inadvertently misses a step like obtaining a signature accepting your terms and conditions, you might find yourself in a poor position to pursue the invoice, escalate collection to an agency like us, or charge interest and collection costs. On the other hand, if your onboarding process is slick and efficient, your customer will most likely expect that your business will also be slick and efficient at chasing overdue debtors.

Standardising your new customer onboarding process will be more efficient saving you and your customer time and money and shortening the time it takes to start earning money from the new relationship. A standardised onboarding process is easier to communicate to potential customers and new staff so they know what they will be in for if asked. It also allows you to test and refine the process over time with a benchmark to measure from.

If your onboarding process includes a credit check, you will be more likely to catch risky debtors before they become a problem for your business – And you will have an opportunity to offer an alternative to a credit account if that new customer is borderline, avoiding the risk while still potentially keeping your new customer.

If your onboarding process is catching and filtering risky debtors, you will save yourself the hassle of chasing overdue invoices later and you may avoid the real cost of not getting paid at all. If your onboarding process includes terms that allow for escalation to a collection agency and costs, you will be covering yourself in case your customer doesn’t pay.

A standardised onboarding process will also be much more scalable, allowing for growth and avoiding cracks for new customers to fall through.

An ideal onboarding process will allow you to restate and define your deliverables with your new customer, ensuring you are both on the same page and potentially helping you to avoid scope creep in the future.

How do you design the ideal onboarding process?

Principals

When designing your onboarding process, think about the outcome you are trying to achieve, what information do you need to achieve that outcome and what is the easiest way to obtain that information. Refer to these principals to ensure you are on track and seek feedback from customers to check their perspective.

1. Make it easy

You should aim to find the balance of ensuring that your onboarding process is robust enough that you are not missing any vital information and making it easy enough for customers to navigate.

2. Remove pain points

Try and avoid asking for the same information over and over as this is a sure way to frustrate your new customers. Also, look at ways to make the transfer of information easy by eliminating the old, print sign, scan and send method. (See tools below)

3. Communicate

Let customers know where there are up to with your onboarding process. If there are hold-ups, manage their expectations. Once you have completed onboarding give your customer a copy of any agreements and ask for their feedback on the process, you might get some great insights.

Tools

There are so many tools available to help with customer onboarding so it can be a little overwhelming just thinking about it. The trick is to keep things as simple as they can be to get the job done. A flow chart is a good starting point for designing your ideal customer onboarding process, Lucid Chart is a good online flow chart tool. Engage your staff in the design process for additional insight.

1. Obtaining Information

A website is a great platform to use for capturing information from your customers, especially if they have already interacted with it as part of your lead generation process.

If using your website, you can integrate and use online forms systems like Gravity Forms or for a standalone system you can use Typeforms. Most of these systems will integrate with most major CRM (Customer Relationship Management) systems and accounting packages (Like Xero) which means less potential for errors with double handling data and a more streamlined process overall.

Online forms can also automate the process of collecting information, especially in situations where you might require authority from more than one person (i.e all directors in a company). An example of how this might work – The primary contact completes the main application form and then your system automatically emails the second business director for their authority with a link to a second authority from. You can also automate reminders if you are awaiting more information from your customer, scheduled email and SMS (Text messages) are popular for this.

Use automation where it makes sense but always have humans overseeing the process and intervening when needed.

If you must use a more traditional PDF form, makes sure the fields are editable, and your customer can sign it digitally. This removes the need for your customer to find a printer and a scanner and can shorten the time taken to complete the step.

2. Processing Information

Once you have all the necessary information from your new customer, you should have an opportunity to review their creditworthiness and decide if you will accept their application or not. We have a range of credit assessment tools available to help like credit reports.

With a credit report, you will have the best information at your fingertips with which to decide. You may decide that customer must meet a specific credit score to qualify for credit, or you will offer them a cash only account for example. Or you, may decide that you will require directors to provide personal guarantees. Our Business Support Specialists can help to advise you on what might be appropriate here.

3. Storing Information

Make sure you have a robust way of storing (and retrieving) any customer onboarding agreements, these are valuable documents. If you store these records in your email inbox, you risk not being able to find them when you really need them. We recommend using your CRM system or a secure cloud-based system like Microsoft OneDrive or Google Drive. You should also ensure that they are backed up securely such that if you lose access to the original copy, you have still have access via the back-up. You should also provide your customer with any copies of agreements should they need to reference it and provide corrections if anything is incorrect.

So, what does the ideal onboarding process look like?

While every business is different and the onboarding process might change, there are some key steps you want to ensure your process covers, particularly if you are offering credit.

1. Obtaining information and confirming identity

Know who you are engaging with, Do you need to undertake customer due diligence for anti-money laundering (AML) purposes? What other information do you need – A written product or service order confirmation?

2. Disclosure and acceptance

Ensuring your customer has read, understood and accepted your term and conditions of business and you have obtained and can retain proof of such, ensure your terms of trade a legally enforceable, give permission to undertake credit checks, allow you to escalate overdue invoices for collection and pass on costs.

3. Assess Risk

Run credit checks, we have the tools to help here and decide if you need more information to make an informed decision to offer credit.

4. Decision Process

Are you satisfied that the customer is a good fit, what is the credit score at which you won’t offer the customer credit? Will you offer them a cash account instead of a credit account?

5. Inform your customer of the outcome

If you offer your new customer credit, will you have a limit on that credit? What are the next steps for them, be clear what if anything they need to do. This is an important step to manage expectations and move the relationship forward.

6. Operationalise your new relationship

Once your customer has been onboarded you can pass them onto the other parts of your business to deliver your product or service. You should also survey your customer at this point and ask them what they thought of the onboarding process. This will give you insights into where you can make improvements and gives your customer an opportunity to raise any concerns or issues. Doing this early in the relationship will demonstrate you care about their outcomes.

Review and improve your process

Once you have your onboarding process running smoothly, it is tempting to “set it and forget it” but the danger is that you may inadvertently miss opportunities to improve the process or worse, your process may no longer be fit for purpose, exposing your business to new unknown risks.

Schedule in to periodically review your onboarding process, we recommend at least once a year at a minimum. Ask your staff where improvements can be made, ask customers what they thought of the process.

Review changes to legislation – AML, Fair terms, industry specific. Are you unintentionally exposed by inaction?

Review new tools – There are constant developments in new tools to improve customer onboarding and automation, look at what your competitors are doing. Is AI something that could help improve your onboarding process in some way?

New products – If you begin to supply and sell new products, does your existing onboarding process work for these, what changes do you need to make?

New customer segments that you might be engaging  – Do they have a different risk profile you need to consider?

Customer Onboarding Thumb

Final thoughts

An effective and standardized onboarding process is essential for managing financial risk, improving cashflow, and enhancing customer relationships. By streamlining information collection, assessing credit risk, and setting clear expectations, businesses can reduce churn, avoid late payments, and scale efficiently. Regularly reviewing and refining the process ensures it remains effective, compliant, and aligned with business growth. A well-executed onboarding process not only protects your cashflow but also sets the foundation for long-term customer success.

Want some help with your onboarding process?

Want some help developing your onboarding process? Get in touch with your local Business Support Specialists, contact us on 0800 324 768 or send us a message via the form below and we will get in touch with answers.

About EC Credit Control

We are a New Zealand owned credit management agency that has been supporting Kiwi businesses for over 30 years. As a specialist in debt resolution and developing business terms and conditions of trade, we have the tools and expertise to help minimise the risk to any business that offers credit. For a free no-obligation consultation, get in touch with your local Business Support Specialist.

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