Tara of 5 Star Admin shares her tips on new payment technologies
Tara shares advice for small businesses wanting to adopt new payment methods and improve their cash flow.
Helping businesses fix leaky cash flow problems
With more than two decades’ experience in accounting and bookkeeping, 5 Star Admin director Tara McGowan has seen her fair share of payment debacles. Specialising in working with trades businesses, Tara has helped countless owner-operated businesses fix their invoicing and payments, and ensure they don’t have leaky cash flow.
Tara sees a few common problems across small businesses, but can call out a couple — ensuring online payments are enabled, invoices are sent correctly, and they’re reconciled appropriately in their accounting dashboard.
“In the worst-case examples, some clients are just paying whatever amount is on the statement without ensuring it matches a purchase order in Xero. This causes challenges when reconciling the supplier statement to invoices or credits, resulting in inaccurate payments,” McGowan says. “In one case a client paid over $7000 more than necessary to a major hardware store – they were wondering why they were always in credit.”
The secret to using new payment tech
Tara has three pieces of key advice for small businesses who want to adopt new payment technologies:
Don’t be afraid of the unknown
While the technology may seem complex, many of the most commonly used payments apps integrate seamlessly into Xero and take a matter of minutes to set up.
Turn on automatic payment reminders
The need to call customers and chase money can be daunting for many people. There is a lot of stress that comes along with not knowing when a client's going to pay because even though you've sent an invoice a week ago, it’s often fallen off their radar. Using payments technologies can enable automated payment reminders, and simple click through payment options that take the emotional stress out of the interaction and ensure cash flow is maintained.
Payment services costs are often outweighed by improved cash flow.
Often clients are worried that the cost of new payment technology will need to be absorbed or passed on to clients, however this relatively small cost is far outweighed by the improved cash flow generated by making it easier for customers to pay as soon as a job is completed. The cost internally to chase payments can be minimised by payment services reducing the administrative time for a small business in debt collection.
In the worst-case examples, some clients are just paying whatever amount is on the statement ... This causes challenges when reconciling the supplier statement to invoices or credits, resulting in inaccurate payments.
Tara McGowan, 5 Star Admin
You can learn more about 5 Star Admin on their website.
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