Managing your clients’ payroll scheme helps to keep their cashflow under control but are they inadvertently jeopardising yours?
As a professional accountancy practice, you stick to a strict billing cycle for your PAYE service and rely on payments arriving promptly.
But how do your clients pay you? Standing Order? Cheque? Over the phone by credit card? And when? Yearly? Quarterly? Monthly?
This mixture can only be a recipe for late payments, compromised cashflow, wasted time and admin headaches. But there is a way to streamline this muddled payroll scheme picture with no fuss, no frustration and no financial upheaval.
This guide will show you why the smart money is on Direct Debit and how you can use it to power your accountancy practice forward.
Direct Debit vs the Alternatives
You’ve set your billing cycle, informed your clients and offered them various ways to pay.
But time and time again, there are some who for love nor money just can’t seem to stick to your payment terms.
Whether you invoice them monthly or yearly, a standard 30-day system just isn’t cutting it with your cashflow.
Traditional payment methods such as Standing Orders and cheques are rapidly heading for the highway. They’re unreliable, inflexible and prone to problems.
Consumers want to pay for products and services quickly and efficiently: one tap of their contactless card, one-click log-in to an online payment portal or a simple set of Direct Debits to pay regular bills.
If your business is getting left behind on the technology trajectory, a Direct Debit bureau allows you to outsource payment collections and introduce a fully automated digital system.
You can slowly phase out accepting Standing Orders or cheques for existing clients and when asked to set up a payroll scheme in future, make Direct Debit the only invoicing option.
Your clients get a flexible, reliable and secure payment method. You get predictable cashflow, reduced admin tasks and satisfied customers.
Outsource and Outshine
Setting up a payroll scheme is complicated enough without adding payment uncertainty into the mix.
You can bid farewell to unpredictability by choosing a specialist Direct Debit bureau who will manage a system of regular monthly payments you can rely on.
It’s pretty much guaranteed that some of your competitors already offer this service to their clients and are reaping the rewards.
And you’ll be one step ahead of those who don’t.
Initiate and Migrate Your Clients
If you’re concerned that some of your clients might be reluctant to make the switch, the benefits to them are easy to shout about.
Take advantage of the trust they have in you to stress why Direct Debit is the best choice: you already advise them how to improve and manage their cashflow, they can have faith in your expertise here too.
Once you’ve signed up with a bureau, moving them onto the new system is a simple process.
All they have to do is complete a Direct Debit Instruction either online, over the phone or on paper.
All you have to do is forward that information onto your bureau and they’ll take care of everything for you.
Amazing Automated Accounting
Now you’re set up to accept Direct Debit for your services, you and your clients will quickly start to feel the flexibility.
You’re in control here. You can alter the date, amount and frequency of each payment while your clients will remain fully in-the-know with their own finances.
If you currently take a chance on your cashflow and only invoice once a year, Direct Debit allows your clients to spread the cost of your PAYE services equally.
Once set up to pay in monthly instalments, they will pay you on time, every time.
And any increase in your fees can be added to this amount so it doesn’t come as a shock at year-end when finances might not be as robust.
So now every time you set up a payroll scheme, you’ll know exactly when to expect cash from your clients.
Predictable revenue to keep your practice moving forward.
But what if something goes wrong and you’re faced with an unexpected non-payment?
Automation extends to a comprehensive reporting system which informs you of any cancellations or bounces as they happen.
You can quickly respond to and resolve issues with minimum fuss and maximum efficiency.
Stress-busting Software Solutions
You know that to set up a scheme you need the best software package available.
It’s saving you time on importing data, money by issuing pay slips online and costly fines by keeping you compliant with new legislation.
But did you know that technology can also revolutionise how you collect client payments?
Specialist Bacs-approved software is used by bureaux which can be fully integrated with your systems. You can also take advantage of powerful APIs and integrate with applications such as Xero.
Streamlined accounting and easy reconciliation at your fingertips, you can say goodbye to double-keying data, human error and time-consuming cross-referencing. It’s all taken care of.
The demands of payroll management keep growing.
It can be an onerous task juggling the day-to-day changes to your clients’ employees’ status, not to mention complying with Real Time Information and automatic enrolment into pension schemes.
You need to keep on top of all legislation while providing excellent customer service which, of course, includes dealing with invoicing professionally.
Direct Debit reduces the possibility of payment conflict. You won’t need to chase payments, you won’t need to make that awkward phone call, you won’t risk losing an important client because of a billing misunderstanding.
There’s peace of mind on both sides, leaving you and your staff free to focus on the job in hand rather than whether you’ll ever get paid for it.
You’ll be well accustomed to advising your clients that spreading their regular payments is crucial to positive cashflow and business success.
So, if you’re not offering them the chance to do exactly that when paying for your own PAYE services, you’re at risk of looking unprofessional.
Existing customers will be easily persuaded that Direct Debit is safe, reliable and convenient.
New customers who are interested in setting up a scheme with you will want to know that paying by Direct Debit is an option. Otherwise, they could turn their attention to your competitors.
The ease of paying you without the hassle of writing and posting a cheque or arranging a Standing Order will only work in your favour when attracting new business.
You may think taking on another supplier is an outlay your practice can’t afford.
But don’t make the mistake of underestimating the cost savings outsourcing your payment collections will bring you.
Direct Debit bureaux charge as little as 3p per collection and many have a transparent fee structure which makes it easy to budget.
The drastic streamlining you’ll see across your business – fewer admin hours, contented customers, reliable cashflow - will make it well worth the investment.
Freedom to Focus
Direct Debit will give you the freedom to focus on your everyday job of crunching the numbers and building your business.
Its numerous benefits will significantly streamline the work involved in setting up a scheme.