For anyone in business, actually getting paid in good time for the work you do is often the biggest problem. Unpaid bills cause significant cash flow problems and, therefore, stress. We, like other businesses, struggle with this too but made some changes at the end of 2019 that have seen us getting paid much faster.
Xero recently carried out research on late payment of invoices and found that the average small UK business owner is owed £24,841 in late payments on any given day, according to a study of two million invoices. In other research, around 50,000 small businesses fold every year because of cashflow problems.
There are lots of actions you can take to get paid faster (see Get your invoices paid on time) but the one step we have made in Mint that has made a significant difference is to offer more ways for customers to pay us.
We have always taken direct debit payment to collect fees. We use GoCardless and we love it. It has full direct integration with Xero which makes it even better . For this to work it does rely on clients signing up to direct debit, but you can add a link to sign up onto your Xero invoices to help with this process. You can check out GoCardless for Xero here.
Aside from direct debit, BACS or bank transfers are really the only payment options we have offered historically. BACS isn’t complicated but, depending on your bank, can be annoying to set up and so we decided to try out Paypal. Paypal fees aren’t the cheapest but the change to the time we receive payments has been significant. We now have a significant number of clients paying by PayPal on the day they receive their bill - this was unheard of before.
So if you are struggling to get paid, why not look at offering your customers a number of ways to pay when you send them an invoice?
Make sure you watch our short videos on setting up new bank accounts and payment methods on Xero to get the most out of this: