Acumen is a forward thinking accounting and advisory firm helping its 2000 clients take their businesses to the next level.
After taking over the business 10 years ago, Director Ross Murray and partner Steve McKenzie continued this commitment and harnessed the power of technology to not only provide clients with a better service but also to put Acumen on the path to profitability.
We spoke to Ross about how optimising the way the firm took payments has helped Acumen to boost cash flow and reduce bad debt as it continues to grow.
The challenges of getting paid
Before moving to GoCardless, Acumen took payments by either cheque or bank transfer. This meant that the team had to spend time manually processing payments and reaching out to clients when payments weren’t made on time. Ross explains:
“Cheques and bank transfer meant a monumental effort went into credit control and being on top of people paying us. And when payments were late we had to spend time calling or emailing clients to find out why. That, in turn, took my focus off driving the business forward to managing cash flow, which isn't a good use of anyone's time.”
At this time, Acumen could be waiting up to 90 days to get paid. Ross says:
“It’s never easy to talk about money with clients. So when clients got bills they knew that they could hold off paying us or if there was an increase that hadn't been discussed they wouldn't pay until we contacted them. This meant that we had a lot of cash tied up in our customers accounts.”
“So, we’d got to the point where we were a profitable business but the cash flow was still poor and the bad debts were increasing.”
Moving to a recurring model
Ross started looking for a new payment provider and found GoCardless through the dashboard on QuickBooks online. He explains:
“I was fed up with not getting paid. So, I started looking for something that could just help us get paid faster - simple as that.”
“We setup GoCardless through QuickBooks and haven’t looked back.”
Since then, all Acumen clients have started to pay by regular, monthly Direct Debit. Ross says:
“Moving all of our clients to monthly Direct Debit has absolutely transformed our business in terms of cash flow."
“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.”
Focusing on growth
“We don’t have to worry about getting paid anymore which has freed us up to focus on other areas of the business and growth.”
“We are continuing with acquisitions. We have two this year that will increase our turnover by around £700,000 a year - once completed, we’ll be looking at their clients and seeing how we can get them using GoCardless too.”