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The Back Room

The Back Room has saved thousands by ditching credit cards and its bank’s manual payments system for automated, international payments from GoCardless.

The Back Room
The Back Room
The Back Room

About

Offshore services

Integration

Uses GoCardless for Xero

Office locations

Payer locations

Find out more about The Back Room

Key benefits

8

DSO has dropped from 25 days to 8 thanks to automated payments.

$25k

saved annually in bookkeeping costs.

Global payments, with a local service

The Back Room is a New Zealand-based provider of offshore accounting and business support specialists, operating across New Zealand, Australia, the US, Canada, the UK, Europe and Asia.

“We help clients overcome talent shortages and unlock what we call the three freedoms: time, wealth and stress,” said Wayne Findlay, CEO and Co-founder. “Time means creating internal capacity for higher value work. We’re cheaper than onshore hiring, which creates wealth to invest in your business. And time and wealth together add up to less stress for businesses and their people.”

And time, wealth and less stress are exactly the benefits that The Back Room has realized since deciding four years ago to get paid with GoCardless.

Tedious bank processes

As a career accountant, Wayne is a big believer in ACH Pull as a reliable and low-cost payment method. But using his bank’s own payments system gave him and The Back Room nothing but trouble.

“It only allowed collections in one currency, New Zealand dollars, which was extremely limiting for a global business like ours,” said Wayne. “It also didn’t link with our Xero accounting software, which gave rise to an extremely tedious and error-prone process of manually uploading payment files and then manually matching payments as they came in. Our only other option was cards or international wire transfers, which rely on customers to process them. Cards are also extremely expensive.”

Less admin, and cheaper than cards

Wayne decided to make a change four years ago when he heard about the GoCardless integration with Xero at Xerocon.

“Integrating GoCardless with Xero means that payments are automatically collected when an invoice falls due, and then auto reconciled once they clear,” he said. “By getting rid of all that admin, GoCardless has saved us at least half an FTE in bookkeeping, worth around $25k annually.”

Credit cards are a popular payment method but the fees are so high that The Back Room has little choice but to pass those costs on to customers. ACH Pull from GoCardless, on the other hand, is cheaper to process, which creates an opportunity for The Back Room to offer better value to clients.

“We always ask that customers use GoCardless, but if they insist on paying by card there are a couple of conditions,” said Wayne. “First, if they miss a payment – which often happens when you’re relying on customers to manually process payments – then they must switch over to GoCardless. And second, we’ll pass on the credit card fees, which we don’t do with GoCardless.”

Strategies such as this have seen The Back Room achieve 73% adoption of GoCardless, and a side-by-side cost comparison with cards makes it easy to see why.

“Credit card fees are usually around 3%, which means an extra $450 on a monthly bill of $15,000, compared to less than 1% and around $150 on GoCardless,” said Wayne. “When customers see that, most of them say ‘OK, GoCardless it is,’ – even in the card-loving US.”

More cash in the bank

Cashflow, as measured by days sales outstanding (DSO), has also improved dramatically while visibility has increased – vital for an international business.

DSO has dropped from 25 days to just eight thanks to automated payments. That's real, tangible cash in the bank, and means we don't have an issue with chasing late payers anymore.

“We’re always shuffling money from one market to another to cover expenses or wages. The GoCardless platform provides crystal clear visibility into what’s coming in and when so we can plan with confidence.”

Global scale

The Back Room has customers across the globe, and cross-border payments can be complex and costly, often requiring at least a bank account in each market and often individual payment partners too.

By contrast, the global reach of GoCardless allows The Back Room to collect payments in local currencies using its Wise international bank account.

“GoCardless integrates with Wise, meaning we can collect payments in clients’ local currency with a single integration and a single bank account,” said Wayne. “This is yet another example of how GoCardless has transformed our scalability.”

Wayne does, however, have one regret when it comes to GoCardless: he wishes he’d started using it sooner.

“GoCardless would’ve been perfect when I had my accounting firm,” he said. “It improves trust between businesses and their clients; you just know what you’re going to get paid, and when. You could call it the perfect stress reliever.”

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