Both sides of the coin

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...

How 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.

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 of the same coin - the cash flow types of customers you should coin. Recognising and leveraging keep an eye out for in determining this can enable a business to suitability: catapult its cash flow and futureproof its capability to grow. 1. The customer in question pays a subscription or a fixed payment When to push Direct Debit on a regular basis (e.g they have clients on retainer). Direct Debit is a powerful 2. The customer in question pays payment method for businesses invoices on a regular basis which to utilise for recurring payments. may be the same or varying It automates payment collection amounts (e.g. for consultancy and reconciliation (saving hours). time and money), and the payment “The biggest benefit of Where these predictability GoCardless has been the apply, the ensures time saved having to chase customer businesses can customers who’ve not paid. I is likely in make more was spending several hours a a situation accurate cash week on the phone, or sending where they flow forecasts. out polite chaser emails to will favour Wherever clients – and that time tends to the ease of possible, stop you being efficient.” not having to businesses should Barbara Gaunt, FD Works pay invoices encourage their over the cash flow customers to pay by Direct flexibility offered by Debit. However, it’s not suited paying invoices. to every customer. There are two

Showing your customers Direct for flagging problem invoices, Debit is the way how to run your credit control meetings, effectively using Now that you know what to look for phone in conjunction with email, in Direct-Debit-suitable customers, consolidated communications you need to encourage them histories, the best to adopt this as their times to chase, payment method. “Our accountants A4G how to effectively recommended Chaser escalate your For new customers to us. All I can say is chasing, and your clients THANK YOU! Chaser is the the benefits of acquire, the best complete credit control automated credit method to get solution. We absolutely control, just them on Direct love it.” Gary Fordham, to name a few. Debit is to offer it as Olivers Mill Dedicating time every the default payment week to keep up on the method, highlighting the latest in best practice credit benefits to them. control is essential - our Chaser blog provides exactly that. For existing customers, it’s a different story. Right now they’re The Chaser software itself enables used to paying as they are, so to its users to most effectively convince them to switch to Direct put this knowledge into action. Debit your client not only needs to Overdue invoices can be sell them the benefits, they need to automatically chased according to ensure the transition is quick and custom schedules, and with fully painless. A clever and unintrusive customisable email templates to segue into offering Direct Debit is reflect your clients’ regular, handto tack it onto ‘Thanks for Paying’ typed email style. Chaser takes emails (if you’re scratching your time-consuming admin tasks off a head right now, we’ve got the finance team’s plate, allowing them lowdown on ‘Thanks for Paying’ to make better use of their credit emails over at the Chaser blog). control time for the invoices and Keep it short and sweet, framing as: customers that need it. With Chaser, they can get their non-Direct-Debit • Direct Debit is available to them customers paying them on time, in • The benefits of switching less time. • Quick and easy steps of how to switch Leveraging effective credit control

when a Direct Debit payment fails

Using effective credit control to get non-Direct-Debit payments paid

The art of amazing credit control is complex. Just scratching the surface of the subject matter, there is: knowing the info your customer needs to make payment, knowing how to correctly identify customer types and alter your chasing approach based on this, the business, having processes For customers that normally pay by Direct Debit, it’s easy to miss

disseminating info to the rest of a failed or cancelled payment or forget to chase it up, setting yourself up for bigger problems later. Polite persistence pays, as we say at Chaser, and this is the best way for your clients to frame their approach in getting a failed Direct Debit payment paid. payment failure, they should send the customer an inquiry email. A soft, understanding, and nonaccusatory tone is imperative - blunt wording or robotic financespeak can only hurt the relationship with their customer. The key element to include in the email is the easiest and most succinct set of instructions to rectify the issue that caused failed payment. The ideal outcome is for the customer to rectify that issue, after which your client can retry the Direct Debit payment collection. Making these reparations as smooth and as simple as possible ensures the customer will be likely to do it sooner - getting your client paid.

Be prepared that once is not always enough. Your client should have a series of these emails sent to their customer on a schedule, increasing the sense of urgency over time. Chaser automates this process, without losing the human touch. With your custom email templates and chasing schedules set in Chaser, any failed Direct Debit payments (and thus unpaid Xero invoices) can be automatically chased however you specify (with the capability to set different specifications for non-Direct-Debit customers). The first chaser the customer receives is best served informing them of the problem and asking them to get in touch to resolve it.

Direct Debit payments can fail for a few common reasons, including the customer having insufficient funds in their account, their Direct Debit mandate being cancelled, or even a bank failure. Your client will be able to see why a Direct Debit failed in their GoCardless account, but it’s always worth them asking the customer to rectify the issue rather than jumping to conclusions, especially if they see an insufficient

As it takes two days for a payment to be confirmed in their account, we suggest waiting at least four days after the invoice due date before your client sends any chasers. This ensures their customers aren’t hassled by being chased for payments they’ve already made.

Going forward, your client will want to continue sending their customer chasers every 1-2 weeks, with an increasing tone of urgency. This frequency lets them keep on top of the problem without harassing their customer. If they continue to have no luck in getting a response from the customer, Chaser can escalate the sender of its chasers to someone more senior in your client’s organisation. Try this after four weeks past invoice due date or three post-due-date chasers - whichever comes first.

Once your client’s customer does rectify the payment problem, it’s a good idea to send them an email thanking them. Like regular chasers, Chaser handles this automatically as well. It goes a long way in showing your clients’ appreciation for their customer and ensuring the customer responds

Catapult your cash flow

There you have it - the intertwining of Direct Debit and credit control to catapult your clients’ cash flow. With a combination of Chaser and GoCardless, both finalists for the upcoming AccountingWEB Software Excellence Awards 2017, their business is leveraging both sides of the coin to add incredible value to their finance function. Not only are you ensuring they get paid on time, you’re saving their finance team countless hours in doing so.

Founding Supporters: XU Magazine’s Patrons

Between 23rd March and 14th April 2014, we launched our campaign to raise US$25,000 to fund the magazine on Indiegogo, one of the world’s largest crowdfunding websites. Amongst those of you who supported the magazine are our Patrons, listed below:

5mc | Melbourne, AU accountantshub.com.au | AU Account Wise | Auckland, NZ Accounting Buddy | Adelaide, AU Accounting To You Pty Ltd | Melbourne, AU accounts2u | Wellington, NZ AccountsConnect | Sydney, AU Active Admin Ltd | Upper Hutt, NZ Adam Ramage | Melbourne, AU Adaptive Advisers | Melbourne, AU Addept Pty Ltd | Adelaide, AU Addflow | Melbourne, AU Admin Happy | Melbourne, AU All Round Accounting | Port Macquarie, AU Ashton Wheelans Limited | Christchurch, NZ Axis CPA Group | Connecticut, US

Bach & Company Chartered

Accountants | Indooroopilly, Queensland, AU Barcant Beardon | London, UK Basis 365 Accounting | US BBS Partners Business Hub | Brisbane, AU

Beacon Bookkeeping & Accountancy

Ltd | UK Bette Hochberger CPA, CGMA | US Biscuit Bookkeeping | Geelong, Victoria, AU Bitcoin Investment Group | Wellington, NZ BizFitness Limited | Nelson, NZ Bollands Chartered Accountants | Alcester, Warwickshire, UK Bookkeeping With Zero Effort | Melbourne, AU Books & BAS | Canberra, AU Books In Shape | Melbourne, AU Boost Bookkeeping | Brisbane, AU Btom | Pyrmont, NSW, AU Carey V. Downing, CPA, PLLC | Fayetteville, North Carolina, US Chaser | Global Cloud 9 Accountants | Auckland, NZ Cloud Accountants | NZ Cloud Accounting | Oregon, US CNJ Accounting | Edinburgh, Scotland, UK Coastal Bookkeeping For You | AU Concept Bookkeeping | Wagga Wagga, AU Connected Accountants | Global Consult to you | Melbourne, AU D J Ramey & Associates, PC - CPA’s | Brookfield, Connecticut, US Dailey Bookkeeping Services | Southfield, Michigan, US Daily Balance | Elk Grove, California, US Diablo Management | Auckland, NZ DJA Capital Pty Ltd | Melbourne, AU Elite Bookkeeping Solutions | Kirrawee, AU Engine Room CA Limited | Pukekohe & Tauranga, NZ Expert Cloud Accounts | Melbourne, AU Fax n Figures Bookkeeping | Canberra, AU Figurit Bookkeeping Pty Ltd | Mooloolaba Queensland, AU Finance On Demand | Seattle, Washington, US First Class Accounts - Ballarat | Ballarat, AU Francis Handcock | Wollongong, AU Fullstop Accounts | Cardiff, Wales, UK Futurebooks | Asia Generate Accounting Group Limited | Auckland, NZ Get A Life Accounting Solutions | Far North Qld, AU Gill McKerrow | Brisbane, AU Green Cloud Bookkeeping | Idaho, US

Heather Smith, author of Xero for

Dummies | Brisbane, AU i-Accounting & Tax Limited | Auckland, NZ Institute of Certified Bookkeepers | Melbourne, AU Integrate in the Cloud | Perth, AU Intersect Bookkeeping Services | Perth/Albany, West Australia, AU Island Accounting Solutions | US Jill Of All Trades | Gold Coast, Queensland, AU

Johns Creek Professional

Bookkeeping | Johns Creek, Georgia, US Joshua Lance CPA, LLC | Chicago, Illinois, US Julie Russell Bookkeeping | Auckland, NZ Justin Cooper | Melbourne, AU

Funded on:

Katalyst Office Management Ltd | NZ Kinder Pocock | UK Laurus Bookkeeping | Brisbane, AU & Global Nexus Bookkeeping Systems | Margaret River, West Australia, AU NQ PRO Bookkeeping Solutions | Townsville, Queensland, AU Number Nurses | Global Nuvem 9 Ltd | Northern Ireland, UK Orbit Accounts | Melbourne, AU Pavilion Accountancy | Ramsey, UK Quick Win Development | Global Rebecca Pizzi | Perth, AU Redman Tax & Consulting, LLC | Durham, North Carolina, US Robin M Wentzel, LLC | Honolulu, Hawaii, US Russells Ca | Bay of Plenty, NZ Spotlight Reporting | Global Star Strategies Bookkeeping | Melbourne, AU Stratus Online | Southern UK Tally Accounting, LLC | Greenville, South Carolina, US Titanium Accountants Ltd | Birmingham, England, UK Total Accounts | Perth, AU TradiePad Pty Ltd | AU Verte Consulting | San Francisco, California, US

Whitehead & Aldrich Chartered

Accountants | Preston, Lancashire, UK xerousers.com | Global Your Business Accounts | Sydney, AU