of recurring revenue processed through GoCardless.
72 hours
for Capital powered by Pipe funding to reach account.
Direct Debit + easy finance = better cash flow
Since 2021, liv. has been helping to design, install, and support smart home and business automation technologies. Commercial customers might be redesigning the office for the new world of hybrid working whereas home customers could be installing smart home technologies as they renovate.
Because liv. offers subscriptions, software licenses, and other services, its business model relies heavily on recurring revenues.
“We’re collecting small amounts from a high volume of customers and the process of collecting those smaller payments became quite administratively time-consuming,” said Rory Hackett, founder of liv.
Customers were paying by BACS, or in some cases still sending checks. “It might be that if we are only billing them a small amount each month, they would wait for a quarter until they paid us. It affected our cash flow and our ability to pay our own dues, but we also didn’t want to switch wholesale to card payments either because the fees are so high.”
Faster cash flow with Direct Debit
To secure its cash flow and break free from tiresome payments admin, liv. decided to make Direct Debit via GoCardless the mandatory payment method for customers’ monthly bills. Now, each month it simply creates a batch of invoices in QuickBooks, which then schedules an automatic GoCardless collection on the due date.
“We process around 75% of our monthly recurring revenue through GoCardless, worth about £45,000,” said Rory.
GoCardless removes all of those pain points of collecting money manually. The way it integrates with our banking and QuickBooks accounting system made a huge difference. It really is frictionless, and our customers love it.
In addition to the subscription payments, liv. uses Direct Debit for one-off invoices. “There’s lots of reasons customers prefer to make one-off payments by Direct Debit versus credit card,” said Rory. “People like knowing their payment is going to come out on a very specific date, and they're also protected by the Direct Debit guarantee.”
Fewer failed payments
Should a Direct Debit fail, then Success+ from GoCardless uses its machine learning models to automatically retry at a time when the payment is most likely to be successful.
Customers, occasionally, might not have the funds in the bank account. Success+ has helped us guarantee those collections, even if they are a bit delayed. I think it gives customers confidence that they're dealing with a business that knows what it's doing, too.
Easy access to working capital
Although liv. has long-term financing facilities, it also has shorter-term cash flow needs. For those, it is now using Capital powered by Pipe, a service that provides access to funding based on the value of transactions processed by GoCardless, with payments set at a percentage of revenue.
“It was a very simple process,” said Rory. “From requesting the advance, it was a couple of steps of providing paperwork and a quick call and then the funds were in our account within 72 hours.”
“Having somebody to speak to, just to understand a little bit more about the product and how it would operate, was very useful in the world of doing things at arm's length,” he added.
Rory uses the GoCardless dashboard to understand his Capital funding. “I can see how much money we've accessed. I can see what our payment terms are. I can see how much money is left to be paid on that particular drawdown,” he said. “It's fully transparent and it's updated in real time.”
Capital is affording us the ability to smooth our cash flow. It allows us to invest in various projects. If one of our customers is having trouble paying us, it gives us a little bit more wriggle room and time to work with them to sort that out.
Capital powered by Pipe has even enabled liv. to invest in moving to new premises, which will feature a showroom that customers can visit.
A trusted solution
“I feel a high level of confidence in GoCardless as a business and how it operates,” said Rory. “It just gets the job done simply and effectively.”
“Many of our customers are probably unaware that GoCardless is running in the background because it simply works,” he added. “With payment processing, you want it to be frictionless and GoCardless just is. If I was to describe GoCardless in three words? Simple, effective and secure.”
