Median Accountancy & Taxation Services Limited found Direct Debit gave them a permanent positive cash flow. About three years ago I decided to re-brand my business and as part of this process I decided I wanted to correct all of the small niggles that I had put up with for the previous nine years I had been a freelance accountant. One of the biggest issues for me as a sole-practitioner was the fact that I was always owed somewhere between £5 – £10,000 in invoicing which is quite a large sum of money.
I was always owed somewhere between £5 – £10,000 in invoicing which is quite a large sum of money.
My wife was always saying ‘you’re really busy but never have any money’ … I think she suspected I was supporting a mistress somewhere! The obvious answer was to collect my fees on a monthly basis. I had looked in to this a few years earlier but standing orders were very cumbersome (and too dependent on the client to complete paperwork!) and a licence to operate a direct debit scheme was far too costly. This time around I put the question out on Accountingweb and the solution came back that I could use a third party to operate the direct debit on my behalf. This sounded ideal and one of the first names I came across was FastPay.
When I approached FastPay they responded quickly with quotes and as has been born out over the years, they seemed very professional from the start. I was particularly attracted to the fixed fee pricing based on a standard number of collections each month. It transpired that my 90 collections is a very efficient number as the standard pricing is based on 100 collections!
The set up process and communication to clients is time consuming and for the first couple of months you do wonder whether it is going to be worth the effort. However, within three months I had about 90% of my clients signed up and was collecting a similar % of my fees up each month. Most clients saw the new facility as a benefit as it enabled them to budget better for my fees. For me, suddenly I had money in the bank and my wife stopped checking my mobile phone!
Three years on and without doubt this was the best single thing I have ever done with my business.
Three years on and without doubt this was the best single thing I have ever done with my business. If that seems over-dramatic then perhaps you aren’t as attached to having permanently positive cash-flow as I am. The facility with FastPay has worked faultlessly from day one. I get early warning if a client changes their direct debit or bank account and the submission takes me about 5 minutes each month to send across via email. It has also reduced my administration significantly. Previously to increase fees for each client each year was a huge task but now I just notify them of the ‘tiny’ increase in the monthly DD and let FastPay do the rest. I am always bemused that many accountants still don’t operate this way …. the cost really is insignificant compared to the huge benefit and we are supposed to know a bit about business!