Businesses that offer an online payment option on their invoices get paid 50% faster than those who don’t.
In the UK, businesses that offer an online payment option get paid around 20 days or 2-3 weeks faster according to stats from Xero online accounting software. For business owners that means less time chasing money and more predictable cashflow – leaving you more time to focus on the things you love about your business.
For customers, online payment is quick and easy, plus the option to pay by credit card offers greater financial flexibility.
By choosing one of the payment solutions on offer you can automate the payment process. Payment apps easily connect to most cloud accounting software packages, so you can send customised online invoices straight from your phone or mobile device.
Customers can pay the invoice instantly at the click of a button. Payments then flow seamlessly into the cloud accounting software and are matched to the transaction on your bank statement.
There are several merchant payment services that connect with accounting packages like Xero, Quickbooks or Sage. Here are some tried, tested and trusted favourites:
PayPal – recognised globally, PayPal is one of the biggest online payment platforms. Customers can make payments instantly with their own PayPal accounts from anywhere in the world in a currency of their choice. You can then choose how often payments will be deposited into your bank account via the PayPal app.
Stripe – lets customers pay with their preferred credit or debit card or by bank transfer. You choose who carries the Stripe processing fee and how often payments will be deposited into your bank account. When a Stripe payment is made, the transaction is matched to your Stripe statement – making it even easier for you to track payments.
GoCardless – gives customers the option of paying with Direct Debit. You request online mandates and set-up direct debit payments, then payments are automatically collected on invoice due dates, invoices are marked as paid and automatically reconciled in your accounting software.
For all three of the above options, if you don’t already have an account, you can easily create one from your accounting software in just a few clicks.
There is no cost involved in setting up merchant services such as PayPal, Stripe and GoCardless, but most take a small transaction fee.
Fees normally equate to between 2-4% of the invoice value for debit and credit cards. You don’t always have to accept credit/debit payments online – the ability to do so can be switched on or off at any time. To reduce transaction fees, some businesses choose not to offer online payments for invoice values over a set amount.
For direct debits the fee will depend on the size of the transaction but should be no more that about £2 in total.
The cost of fees however – balanced with the benefit of faster payments – is a small price to pay.
All payments made using online payment options are automatically recorded against the invoice in most good accounting software. For your customers that don’t pay straight away, automated payment reminders can be set up and customers will be emailed at set periods to highlight unpaid invoices to them, freeing you of credit control nightmares.
By getting paid faster, the health of your business’s cashflow will improve dramatically. For existing cloud accounting software users, payment apps are quick and easy to set up and payment options can be added to your invoices straight away.
Not using accounting software yet? For those not already set-up with a cloud accounting software, Xero is a good option for many businesses. Join us for WMT’s next FREE Xero demo to see how it could help your business or contact Jane Spraggs to start the set-up process today.