When you’re in the early stages of running a business, it’s vital that clients pay your invoices on time. Positive cash flow is key to making your company profitable and enabling you to grow. Utilising a streamlined payment solution like GoCardless for Xero will help you overcome those late-payment woes.
One company that’s reaped the rewards of integrating an automated Direct Debit solution with Xero is web agency, R & W Media.
We sat down with co-founder, Steven Wu, to find out how late payment was affecting their business in the early days, and how switching to Direct Debit has helped them both improve cash flow and get back time to focus on their core business.
The pressing issue of late payment
Craig Randall and Steven Wu founded R & W Media in 2012 with the aim of bringing effective ecommerce design and development services to retailers and wholesalers. They’ve used Xero as their accounting platform since the company commenced. They have worked with some well-known brands, including Nickelodeon, Cartoon Network, Warner Brothers, Star Wars and Marvel. But early-on, late payment was an ongoing and time-consuming issue for them, as Steven explains:
“Prior to using Direct Debit, we’d invoiced our clients manually by email. There was a lot of unnecessary chasing because there were a lot of late payments. That caused cash-flow problems for us, so we implemented other payment solutions… but they weren’t very effective and were quite cumbersome to use.”
This presented an issue. For Steven and the team, their aim was to focus on their core business; working with customers and getting their hands dirty with a variety of ecommerce projects and development jobs. But their time was being eaten up by credit control duties and endless phone calls and emails to chase up payment of overdue invoices.
Despite trying out a variety of online payment solutions, they didn’t feel they found a system with the right mixture of features. Their ideal payment solution had to be:
- Easy to use with a great user interface (UI)
- Simple and quick to set up
- Cost-effective for the business.
That’s when Steven found GoCardless and saw that he’d found a payment solution that ticked all these boxes.
Why GoCardless ticked all the right payment boxes
What Steven liked about GoCardless for Xero was the ease of sign-up and the simplicity of the main dashboard when compared to other online payment solutions. In minutes, the agency was set up with an effective Direct Debit payment option. This had the added benefit of the whole process being automated from start to finish.
“Once we set up a Direct Debit in GoCardless, it’s collected automatically and we get notified. This means we don’t constantly have to chase up clients. GoCardless also emails our clients, so they get notified straight away when payments are going to be taken.”
This seamless automation of Xero online invoicing and collection of fees via GoCardless’ Direct Debit functionality meant the agency had finally overcome those late-payment challenges.
With Xero as their accounts system, the team could fire off online invoices to clients and be more confident customers would pay on time. All their clients needed to do was authorise an initial GoCardless request to pay by Direct Debit. Then all they had to do was share their bank details. Once set up, payment would be automatically taken as soon as they reached the invoice due date.
A seamless solution to late payment
Since making the switch to Direct Debit, Steven and the R & W Media team don’t have to worry about late payment having a negative impact on the success of the agency.
Fees are paid automatically, and transactions are reconciled in Xero through the transparent integration with GoCardless and their Xero account. This not only improved the overall cash flow within the business (removing any cash worries at expensive points in their business cycle), but also makes their whole financial admin process far more effective.
GoCardless for Xero and your business
If you’re a Xero user and want to remove the hassle of late payment issues, using GoCardless is a no-brainer. With one simple integration, you can automate your entire payment and cash-collection process. This means you can get back time to grow your business.
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