With half of its customers paying by Direct Debit through GoCardless, managed web hosting and server provider, Catalyst2 has achieved a 20-30% reduction in overdue invoices.
Catalyst2 customers range from web designers to web development agencies to large ecommerce sites. Jacob and the team pride themselves on providing first class services and customer support based on the needs of the business – this is echoed in their five star Trustpilot rating.
We spoke to Director, Jacob Colton, to find out more about how a customer centric approach and a clear, recurring payment model have helped the business better serve their 5000 customers. Plus, we hear how GoCardless for Xero has helped Catalyst2 reduce admin overheads and free up time.
A recurring payment model
Catalyst2 offers a clear, recurring payment model that allows customers to pay monthly or annually. Finding a payment method that could support this was very important.
Jacob says, “Customers pay varying amounts, so we need a payments system that can support that easily - without more admin for us or hassle for the customer.”
“When we first started, we simply weren’t big enough to access Direct Debit through a bank so we were using a very clunky and expensive alternative. As a result, only 10 or 15 customers were paying by Direct Debit and the rest by Bacs transfer or standing order – leaving us with a lot of payments admin.”
In 2015, Jacob started to look for a more streamlined solution, that could take away the admin burden.
“We’re a small business, and we wanted to automate the payments process as much as possible – we don’t have the time or resource to spend extra time chasing late payments or,” he says.
The Xero integration
After using GoCardless through the online dashboard, Jacob discovered the Xero integration and connected the two platforms. He explains:
“Integrating with Xero has been a game changer for us”, Jacob explains. “There is no manual reconciliation, and customers get charged for a specific invoice so everything is a lot tidier.”
Using GoCardless for Xero, Catalyst2 managed to build on the time savings they were already making using GoCardless directly and avoided the need to hire additional staff for the finance team.
We were already saving around a day a week with GoCardless – the Xero integration has saved us at least another day.”
Since using GoCardless, the Catalyst2 team have been able to focus their efforts on the continuous improvement of their customer service. “We have the time to focus on finding better ways of doing things, improving efficiency across the business and focussing on the service we provide to our customers. This has included getting ISO9001 certified.”
A better client experience
Moving customers on to GoCardless has helped Catalyst2 reduce their overdues invoices by 20-30% – meaning fewer awkward conversations with clients. Jacob says:
“We were able to identify where it was most valuable to have customers paying by Direct Debit and as a result have reduced the amount of time that customers take to pay from around 90 to 30 days.”
We have all of our major customers now paying by Direct Debit, which is great not only in terms of admin but it also helps us get a real time view of our cash flow.”
GoCardless has been well received among Catalyst2 clients, with over 50% now paying their fees by Direct Debit.
“Our customers know that the Direct Debit Guarantee makes payments more secure than Bacs transfers or standing orders, so we find that our customers are very happy to pay this way”, he explains.