You might be surprised to learn that less-than-optimal practices, concerning accounts receivable, are reason small businesses struggle and fail. However, when you ask “why”, it’s known that inadequate cash flow is an extremely significant financial impediment to success for an entrepreneur. Therefore, it’s clear that when accounts receivable pile up, cash flow suffers.
Companies that are unable to collect payment from their customers have to turn to their cash reserves or to seek outside financing to make ends meet. This means that less cash is available to help you grow your business. Therefore, the proper management of accounts receivable is one of the best reasons for a small business to hire a payment processor that provides ACH solutions.
ACH (Automated Clearing House) is a nationwide computer-based network that electronically processes financial transactions between institutions that participate in it. A payment processor will give your business an on-ramp to ACH payments and make it easy for you to send bills and for your customers to pay them. It will take the burden of managing your accounts receivable off your hands, freeing you and your employees to do the important work of running and growing your business.
For example, at VeriCheck we understand how frustrating it can be to have outstanding accounts receivable and, even when a customer pays, how laborious it can be to take checks to the bank and deposit them. One key service that we offer is a Recurring Billing solution as an efficient option for collecting monthly payments.
Recurring Billing is an automated payment model that allows you to automatically deduct payments from the customer’s bank account on a periodic basis (weekly, bi-weekly, monthly, etc.). This option requires the merchant to obtain the customer’s banking information and authorization at the start of the installment plan. This authorization will remain in place until the receivables are fully paid or the customer withdraws permission.
Another good practice for handling receivables is to use QuickBooks® software. Through our partner Fi-Soft, VeriCheck is able to provide a direct integration to QuickBooks, allowing our customers to seamlessly integrate their accounting and payment processing systems.
You can now send invoices to customers directly from QuickBooks with a pay option built into the invoice. Customers will be able to pay invoices with ease, and payments show up in QuickBooks, so that relationships can be easily managed.
Improving your handling of accounts receivable is just one way in which VeriCheck will help your business run more efficiently and be more profitable.