Both Sides of the Coin Catapult your Cash Flow with Direct Debit & Credit Control
@chaser_hq
Brad Ewin, Marketing Executive, Chaser Brad is a former Mechanical Engineer, once Enterprise Software Consultant, and now Marketing Executive. His diverse experience, analytical mindset, and penchant for the creative has him blowing up in the cloud accounting scene with essential, actionable insights for SMEs to achieve amazing credit control and develop an elite finance function.
The late payment problem is widely known. At last check Xero found, in their Australian data alone, more than 3.8 million overdue invoices were unpaid. More shocking is that a 2016 report by the FSB found 50,000 UK businesses could’ve been saved from closure in 2014 were they not struck with late payment problems. Late payment isn’t something your clients can afford to ignore any longer - the life of their business could depend on it...
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ow does a business prevent itself from becoming a statistic? By maintaining the healthiest cash flow possible, with a combination of Direct Debit and amazing credit control practices.
of the same coin - the cash flow coin. Recognising and leveraging this can enable a business to catapult its cash flow and futureproof its capability to grow. When to push Direct Debit
There are incredible apps in the Xero ecosystem to facilitate this. GoCardless for Xero is the UK’s leading Direct Debit solution allowing users the ability to automate payment collection and reconciliation from their customers. Chaser is the highest-reviewed credit control software on the Xero App Marketplace, enabling their users to intelligently manage and automate their credit control function without losing the human touch. Each of these apps is well recognised in their field, however combined they provide much greater value to a business than the sum of their parts. Often seen as unrelated, they are in fact two sides 76 / Issue 12
types of customers you should keep an eye out for in determining suitability: 1. The customer in question pays a subscription or a fixed payment on a regular basis (e.g they have clients on retainer). 2. The customer in question pays invoices on a regular basis which may be the same or varying amounts (e.g. for consultancy hours).
Direct Debit is a powerful payment method for businesses to utilise for recurring payments. It automates payment collection and reconciliation (saving time and money), “The biggest benefit of and the payment GoCardless has been the predictability time saved having to chase ensures customers who’ve not paid. I businesses can was spending several hours a make more week on the phone, or sending accurate cash out polite chaser emails to flow forecasts. clients – and that time tends to Wherever stop you being efficient.” possible, Barbara Gaunt, FD Works businesses should encourage their customers to pay by Direct Debit. However, it’s not suited to every customer. There are two
Where these apply, the customer is likely in a situation where they will favour the ease of not having to pay invoices over the cash flow flexibility offered by paying invoices.
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