Measure Dollars Saved and Improve Cash Flow with Automatic Payment Processing

While receiving payment faster from customers is key, Managed Service Providers' (MSPs) financial management should also understand the cost savings directly attributable to accepting automatic payments. By calculating how automatic payments can improve the accounts receivable ratio, you can provide greater insights into your financial cost benefit analytical process. Let’s break down the benefits and dollar savings here for an MSP, which is receiving 20% of payments processed by credit cards and 50% of payments processed by bank debit.

Direct Cost Savings

As Wise-Sync integrates with Xero and QuickBooks Online, we estimate businesses will save an average $5,200 per annum on direct operational costs by syncing accounting data.

As the financial controller, not only do you have to oversee this process, but you also need to speak to customers who haven't paid their invoices.

By automating payment processes via credit card and direct debit, your business is bound to revel in a major opportunity to save money and time, whereby Wise-Sync estimates additional savings of $4,290 per annum. 

Reduction of Accounts Receivable Days Outstanding

At present, the industry standard for customers to pay their invoices is 35 days outstanding. By implementing automatic payments, your business can reduce this amount by 21 days to an average of just 14 days. 

Using the Wise Pay Calculator, based on a business with a $95,000 monthly turnover with 100 invoices, this represents $66,317 paid by customers and back into your business at an earlier stage each year.

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Net Cash Flow Improvements

The cost of automatic payments is well worth the investment as net cash flow improvements can advance up to $8,290 per annum.

When customers subscribe to Office 365 and other managed services, the business case is clearly favouring automated direct debit and credit card payments. 

If your business turnover is $100,000 per month, these savings can potentially reduce a bank overdraft or line of credit; saving on interest payments, extra administration costs and bank fees.

Cloud Accounting is the Future

The automation of manual recurring processes involving invoices and payment processing into the cloud is undoubtedly, the future.

Speak to Wise-Sync about how we can help you lower staff costs, enhance accounts receivable ratios and improve your overall business cash flow.

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