If you ask any business owner how they keep their business running, they’ll likely have the same answer: Keep the payments rolling in!
For businesses in the trades, maintaining good cash flow is all about invoice processing and payments. You need to quickly invoice customers for your project, service, or maintenance work so that you can deliver the best customer experience and know that money’s coming in.
You also need to be able to take payment from customers and push those funds into your accounts quickly. And, the easier it is for customers to pay, the faster you bring money into the business. Keeping this cycle running smoothly and efficiently is a vital part of cash flow management.
Before we jump to the main benefits of automating payment processes, let’s first define what it means and how it works.
What is Payment Automation?
Payment automation brings money into a bank account faster–at the tap of a card in fact– among other methods, by eliminating the middleman. The middleman being cashing checks after payment processing has manually passed numerous hands within a company.
For field service businesses, a payment automation system is a faster, more secure way to collect payment for project, service and maintenance work. (And setting one up will make your finance department fall in love).
What Tools Are Available for Payment Automation?
There are plenty of accounting software tools that specifically help businesses better manage the invoicing and payment processes. But, a field service software can streamline invoicing and payment workflows. A good field service management solution includes invoicing and payment tools that employees can access in one place. Even better, some solutions integrate directly with your accounting software to form one seamless cash flow management tool.
How Does Payment Automation Work?
With a payment automation system in place, information normally stored using paper methods, for example customer invoices, are digitalised. A digital workflow is put in place removing the need for human interaction to move the process forward. This differs from manual processes of invoicing and collecting payments, where invoices and payments are sent and received through the post. Customers then also have to deliver the invoice to your accounts payable department, where it has to go through the correct financial processes.
That’s a lot of steps (and time spent waiting for funds to arrive in your account) just to keep money flowing on a day-to-day basis.
Benefits of Implementing a Payment Automation Solution
Luckily, there are a variety of payment automation solutions that help streamline payment workflows. And the benefits of adopting these types of workflows are tenfold. Let’s take a look at how it can help reduce fraud risk, speed up processing and improve billing accuracy.
Reduce fraud risk
Taking electronic payments and using a payment automation system reduces the risk of any fraudulent activity. You get increased visibility over any financial transactions that you can easily dip in and out of. If you see any irregularities, you can quickly investigate to make sure all is as it should be. When it comes to taking payment, paper-based methods are far more time consuming and open to security risk. Maybe the information is accidentally left on a desk or in a truck. The last thing you want is a customer querying a payment and the receipt or transaction details are nowhere to be found.
Payment by cheque is one the most frequently targeted methods for fraudulent action. Which is another reason why strengthening the security of sensitive data is vital.
Enjoy faster processing
Between field staff and the finance team, many internal processes can be streamlined and sped up with a payment automation system. You can increase productivity because it’s easier to secure payments. Plus, the finance team won’t need to worry about chasing late or overdue payments as notifications for both ares usually built into the payment automation process.
In addition, field staff can take payments while on-site. With more time on their hands, they stay better organised and avoid missing essential payment documents, updates and communications.
Better yet, staff are more productive when they aren‘t tied to hard copies of invoices and receipts and can instead access the correct records digitally, at the right time, no matter where they are.
Improve billing accuracy
Payment automation minimises miscommunication and removes the need for back and forth phone calls or emails regarding payment. Furthermore, it limits the amount of errors that happen when manually tracking payment amounts and information. These errors can negatively impact financial reporting and in turn, impede your ability to accurately forecast profit and loss.
With fewer manual errors, you can be confident you are making data-driven decisions that support your business cash flow.
Increase payment flexibility for customers
Automated payment solutions give customers payment flexibility, providing them with options to pay with a credit or debit card in addition to cash and cheque. Providing flexible and convenient payment options speeds up this process and means your customers are more likely to pay on time.
Furthermore, this means commercial customers don’t have to chase approvals or signatures from their own team before they can send payment to you. They can pay instantly with a card in person, online, or over the phone. And for residential customers it ensures the process is seamless and as straightforward as possible.
Reduce transaction costs
Manual invoice processing involves higher transactional costs.This includes the number of staff it takes to process an invoice. For example, you’ll need to think about each of their hourly rates and the amount of time spent on invoices throughout a month. Furthermore, there may be conversations happening between estimators, the field staff and the finance team about jobs which can be streamlined through automation. And that all plays a role when discussing transactional costs. In addition to the labour related to invoicing, you have other costs such as supplies needed to produce, send and mail invoices. Although relatively small, all costs matter. As well as any finance tools which have a monthly or annual fee attached to them.
Implementing a payment automation system completely cuts those costs down. You spend less time chasing overdue payments, which gives employees the flexibility to focus on other areas of the business. There is no need for so much stationary since invoices get sent digitally to customers. You’ll also save on internal transaction costs by switching to a streamlined, centralised system to automate payments.
Existing accountancy integration
Some solutions integrate directly with existing accounting software to form one seamless cash flow management tool. For example, simPRO integrates with accounting platforms such as Sage, Xero and QuickBooks to form an end-to-end solution that helps you manage jobs from lead through to payment. This creates a single source of truth with payment and invoicing data from all your in-progress jobs. As a result, you have a complete picture of your cash flow at any given time and can make better informed business decisions based on actual numbers.
With the right payment automation solution there are huge advantages for your business. Faster processing, reduced business costs and enhanced visibility are just a few of them. You’ll see an increase in productivity from your field staff as they’re able to take payments and process out on the field, bringing revenue into the business faster. Ultimately, a centralised hub where you can streamline payment processes strengthens relationships with your customers, and makes things easier for the business when it comes to internal processes.