Last editedMay 20223 min read
Are late payments causing problems? Get paid on time, every time with GoCardless!
If you are experiencing the stress and worry of late payments in your business, you are not alone, and it's not your fault!
Unfortunately, the US has a culture of late payments, with a significant 59% of small businesses saying they have direct experience with late payments. This causes numerous problems in the business.
However, late payments are not inevitable and can be quickly eliminated simply by changing the way you accept payments.
Benefits of collecting payments via GoCardless
1. Predictable cash flow
Late payments make cash flow unpredictable, stunting business growth, causing significant stress for owners, and putting a strain on business operations.
GoCardless hands you control of when you get paid, giving you predictable cash flow for peace of mind and business planning.
"Overdue invoices are virtually non-existent, and that makes us happy!" - George Ford Director, Veriphy.
2. Peace of mind
Dealing with late payments is incredibly stressful, causing uncertainty in the business, potentially impacting your own payments to suppliers and even staff payroll.
With GoCardless, you can stop worrying about late payments and focus on the critical aspect of your business.
"It takes all the stress away of people not paying." - Simon Denney Owner, Pure & Clean
3. Save time on late payment admin
Dealing with late payments is exceptionally time-consuming, with many hours spent on accounting for missed payments, phone calls and emails chasing the payments.
A study by Quickbooks highlighted that 65% of US small businesses spend 14 hours a week, or 56 hours a month, chasing late payments. In a GoCardless small business customer survey, GoCardless merchants spent only 2.6 hours per month managing late or failed payments. That is 95% less time than the 56 hours most US small businesses spend chasing payments!
GoCardless gives you back the time currently spent on late payment admin, allowing you to focus more on core business tasks.
"This has saved us a whole person's salary." - James McGlade, Founder, Growth Alliance
4. Admin automation reduces manual processes
Regular financial admin takes up a lot of time too. A study by Starling Bank found that small businesses spend between 19% - 31% of their total weekly work time dealing with payment admin!
In contrast, GoCardless provides one easy-to-use dashboard and integrates with cloud-based accounting systems (like Xero, Quickbooks, Sage and many more) to reduce manual processes and automate payment collection and bank reconciliation. The result is that businesses using Direct Debit through GoCardless spend 59% less time managing their payment admin.
"Eliminated 14 hours per week, per team, that was previously spent matching payments, equating to around £2,000 per month per venue in staff salaries." - Lee Mellon, Head of IT, Cripps & Co.
5. Better customer relations
Late payments lead to awkward conversations with customers and ultimately have a negative impact on customer relationships.
With GoCardless automating your payment collection processes you never have to worry about late payment conversations and can enjoy stress-free and productive relationships with your customers.
"GoCardless stops those awkward conversations with clients, it saves time and it obviously helps cash flow." - Saija Mahon, Founder & MD, Mahon Digital
How Does GoCardless Eliminate Late Payments?
GoCardless is built on ‘ACH Debit rails’ and enables 'pull' payments.
A pull payment is controlled by the payee, or in other words: controlled by you and your business.
The authorization is required only once and is given by your customer when the payment is initially set up.
Once authorization is granted, payments can be set up in a few clicks and are then are 'pulled' from your customers' bank accounts on the due dates set by you, with no further action required from either you or your customer.
"Over the last two years we have grown our cash balance by at least £350,000 and reduced our debtor days by more than half." - Ross Murray, Director, Acumen
How invoicing facilitates late payments
If you are like many US businesses and use invoicing as your payment method you've likely experienced the stress of late payments many times.
This method requires the business to raise and send an invoice, then wait for their customer to take action and settle the invoice, generally via a bank transfer.
Bank transfers of this nature are 'push' payments - they require the payer to take action to push funds to your account, so your customer controls when the payment is made, often resulting in late payments.
As GoCardless uses an automated push payment controlled by you, it is always paid on the date you schedule.
With GoCardless, previous problem clients are no longer an issue and payments stream in every month. - Guy Hudson, Owner, Norwich Residential Management
Accessing ACH Debit via GoCardless
Accepting payments with GoCardless is quick and easy to set up and can be used for recurring and one-off invoice payments.
There are no set-up fees and no contracts or commitments required to get started, and with GoCardless, you can start taking payments in less than a day.
GoCardless merchants have a clear view of incoming payments and visibility on who has/hasn't paid through the user-friendly GoCardless dashboard.
GoCardless also offers seamless integration with over 300 partners, including major invoicing software like Xero and QuickBooks, which puts payment visibility right into the workflow of your business.
Not only does ACH Debit with GoCardless eliminate late payments, but it also speeds up payment times. Research has established that businesses can get funds into their account almost twice as fast by accepting GoCardless payments on their online invoices.