How FastPay Helped A Subscription Company Secure Their Cash Flow

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The subscription sector has grown by an impressive 200% since 2011.

But despite this boom, like any other business, subscription service companies aren’t immune to failure.

Indeed, the number of UK business deaths increased from 288,000 to 357,000 between 2016 and 2017, a death rate of 12.2% compared with 10.2% in 2016.

And one of the chief culprits? Compromised cash flow.

Here we explore how to ensure your subscription company remains the picture of health thanks to the potent powers of Direct Debit.

The Cash Flow Conundrum

cash flow conundrum

Keeping cash flow under control is crucial for business survival. Nail it and you have a far higher chance of becoming a success statistic. Neglect it and you’re setting yourself up for a fall.

Challenges to cash flow can come from all directions: below-par bookkeeping, unpaid invoices, unexpected expenditure, inaccurate forecasting and inadequate customer service.

Most of these potential pitfalls can be navigated by partnering with a Direct Debit bureau such as FastPay to overhaul and automate your payment system.

But how?

  • Manage regular payments via Direct Debit and you’ll be equipped with a fully-automated system that eliminates the risk of human error. Say goodbye to manually inputting figures into spreadsheets and hello to slick software and accurate records.
  • Moving your customers onto Direct Debit will drastically reduce the number of late payments you have to deal with. Instead, your subscription company will be paid the expected amount on the expected date. No more chasing debtors, no more worry about going into the red.
  • The predictable cash flow that Direct Debit generates means you’ll be in prime position to plan spending in advance. As your account balance fluctuates far less wildly than before, your forecasting will be accurate and you’ll be well-placed to deal with any unexpected bills.
  • Direct Debit’s smooth operation means customers will have the peace of mind that their payment is being taken care of. They’ll consider you to be a professional, trustworthy company who they’ll happily do more business with.

Subscription Company Success Stories

subscription success storiesPioneer Publishing delivers 28,000 copies of its local publications to households across Walsall. Their Pioneer magazines contain features and advertising to spread the word about local businesses to a precise target audience.

With many long-term subscribers, the finance team has an important job making sure that payments are collected on time.

Before they joined forces with FastPay, they were relying on a mixture of payment options including cheques, cash and Standing Orders.

This was starting to have a negative effect on their cash flow. The unpredictability of when they’d be paid and by which method was starting to take a toll on their subscription company.

Gillian Thomas, company director at Pioneer Publishing, said: “As our company began to expand, we found that cash flow was becoming more of a problem.

“Most of our customers are long-term, so we decided to explore options which enabled us to gain more control over incoming funds.”

Gillian knew that assessing their payment options was the key to this and after completing some research, realised that Direct Debit’s reliability, security and flexibility was the answer.

She looked into how a Direct Debit bureau could make this happen, comparing costs and services between different companies.

She said: “Having looked at several other companies who provide a similar service, we felt that FastPay offered by far the simplest and most cost-effective option.”

Now, 90% of Pioneer Publishing’s customers are paying by Direct Debit, a dramatic change from their original way of working.

Not only is cash flow guaranteed but the finance team have less admin hassle, fewer awkward calls to late payers and an online dashboard to efficiently track payments in real time.

And they’re enjoying exceptional customer service which makes their Direct Debit set-up effortless.

Gillian added: “The FastPay team are extremely efficient and supportive. It is very refreshing to receive superb customer service when needed.”

efficient service

Coach and Bus Week is another company based on a subscription service which is enjoying the benefits of Direct Debit.

As the only independent weekly title serving the UK coach and bus industry, they also rely on dependable, regular injections of cash from subscribers for business success.

Using FastPay’s Managed Service means they have predictable cash flow each month. Their customers also have the reassurance that their payments are covered by the Direct Debit Guarantee. This protects them on the very rare occasions that an error is made with their payment.

Lorraine Jackson, subscriptions executive at Coach and Bus Week, said: “FastPay provide a straightforward platform to collect some of our regular payments from customers.

“It’s a simple, manageable system and if we ever have queries we can always rely on customer support to respond effectively and quickly.”

Direct Debit comes with a bonus benefit for subscription service companies.

With a business model based on attracting, acquiring and retaining loyal subscribers, making regular payments as easy and smooth as possible minimises the number of potential unsubscribes.

Direct Debit allows you to change the amount your subscribers are charged with minimum fuss. All you need to do is give your customers advance warning and your bureau will take care of the rest.

This also gives people the flexibility to add or take items away from their subscription or to request a delivery bi-monthly instead of monthly.

And while they can be certain that their order will arrive on time, you can be sure that their payment will arrive in your account on the expected date. A straightforward transaction for all that’s based on trust and certainty.

The result? Brand loyalty and a thriving subscriber list!

For subscription companies, FastPay’s Direct Debit services offer the ideal solution to cash flow worries and business insecurity.

Instead, you’ll be enjoying a steady, predictable income to build even firmer foundations. Watch as your business flourishes, your bottom line booms and your customers sing your praises.

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