Improving CashFlow by Measuring Dollars Saved with Automatic Payment Processing

While receiving payment faster from customers is key, financial management of managed service providers should also understand the cost savings directly attributable to accepting automatic payments. By calculating how automatic payments can improve the accounts receivables ratio, you can provide a 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 save on average $5,200 per annum on direct operational costs by syncing accounting data. As the financial controller, you also have to oversee this process and often speak to customers who have not paid invoices. Wise-Sync estimates by automating payment processes via credit card and direct debit, you save an additional $4,290 representing the opportunity cost of your time to your business.

Reduction of Accounts Receivables Days Outstanding

Currently, the industry average is 35 days outstanding for customers to pay their invoices. By implementing automatic payments, your business can reduce this by 21 days to an average of only 14 days. Using the Wise Pay Calculator, based on a business with $95,000 monthly turnover with 100 invoices, this represents $66,317 paid by customers back into your business earlier each year. Watch The Real Cost of Automatic Payments Webinar

Net CashFlow Improvements

The cost of automatic payments is well worth the investment as net cashflow improvements can improve up to $8,290 per annum. Having customers subscribing 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

Automating manual recurring processes of invoices and payment processing into cloud is the future. Speak to Wise-Sync about how we can help you lower staff costs, improve accounts receivable ratios and improve your business cashflow.

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