Unsurprisingly, how to get your company’s invoices paid faster is always one of our most popular blogging topics. This one from last July, “Get to grips with late payment”, was particularly popular and widely read, according to our website stats.
We’re choosing to write about it again because of some interesting findings from our online bookkeeping partner, Xero.
Credit and debit cards are paid 19 days faster than standard invoices
There is less and less resistance to paying business invoices by credit or debit card. And in order for your business to benefit from that, all you need to do is to be able to accept the most popular types of card.
Speaking on the Xero blog, Sue Pak, Xero’s New Zealand Head of Accounting stated that “We’re all busy, so if a client can pay online when they receive the invoice, they don’t have to remember to pay later…The sooner you receive the money (from your client), the sooner that money is working for your business.”
Citing Growthwise, an accounting firm based in Newcastle in New South Wales, owner Steph Hinds was quoted as saying “We try eliminate pain points for our clients. Once we have their invoicing [sorted], how do we get them paid quicker? We’ve got to make it easier for people to take credit cards, and that often will result in a PayPal or Stripe conversation…Then we roll it out, and we show people that they’re getting paid quicker, which they love.”
Xero looked at the difference in times taken to pay with a standard invoice and by credit or debit card in Australia, New Zealand, the UK, and the USA, and here is what they found:
In the UK, when customers were offered the choice of payment by credit or debit card, they paid up 19 days faster than by standard invoice alone.
To be precise, by credit or debit card, the payment averaged 19.26 days but with invoice it was 38.05 days.
In the UK, Xero works with PayPal and Stripe
You can link up your Xero account to PayPal and Stripe. There are no sign-up fees and you only pay a small fee for every transaction handled.
When you send out an invoice by email, the invoice will contain a link which takes your customer to a gateway page for payment. They can then send their remittance straight away.
Your Xero will let you know the payment is coming in. It will also create an invoice from Stripe or Paypal on your books to account for the transaction fee charged.
Modina’s credit control service
We’ve seen how using PayPal and Stripe with your Xero account can free up cash flow.
Modina also offers a credit control service that will also free up your time. Click here for more about our credit control service.
Invoicing and payment chasing take up too much time for small business owners. Including for companies with smaller turnovers who may not even be registered for VAT, this can take hours of your productive time away each week.
Let Modina handle this work for you – those few hours you gain back in a month means more time for you to sell (which will create more invoices in itself for us to handle for you!).
Contact us today.
For advice on getting paid faster or to find out more about our credit control services, please speak to our team today on 020 7183 8241, or email us on firstname.lastname@example.org