Automatic Payments: The Cost of Doing Nothing
Nowhere is the phrase “time is money” more true than in professional services. You are the product. Your knowledge, time and energy offer value to clients. To maximize profitability, your time is best spent in providing those valuable services.
At the end of the day, your firm is a business, and efficient use of time will result in a better bottom line. Today, firms that are most profitable leverage technology to automate routine processes to reduce the time (and therefore money!) spent on manual processes.
It’s True – Time Is Money. Doing Nothing Carries a Cost.
The “time is money” metaphor is particularly apt in client invoicing and payment processing. Hours spent by your team chasing paper, reconciling accounts receivable or managing manual billing processes equal time that could be put to a higher purpose.
Fortunately, APX electronic payment processing is changing the game. If your firm has not yet moved to an automated payments solution, now is the time to take action. Indecision, inactivity or procrastination in adopting automation could cost you more than you realize.
Costly Time Leaks and Broken Processes
More firms are realizing that manual AR operations are no longer feasible given the realities of operating in a virtual work environment. How many hours per month is your firm losing to the following common speed bumps in manual processes?
- Collecting and tallying billable hours
- Creating, customizing and printing invoices
- Reviewing invoices and correcting errors
- Stuffing and mailing envelopes on billing day
- Opening and entering incoming paper checks
- Reconciling under- and overpayments
- Sending reminders on overdue invoices
Unforeseen Costs of Doing Nothing
The hourly effort can add up fast, with every manually processed invoice incurring a cost up to $22 in headcount and processing costs. A firm that creates 1,000 invoices per month will incur $22k in invoicing costs. Be aware that other costly risks may result if your firm stays with status quo manual payment processes:
- Increased risk of payment fraud: The Association for Financial Professionals reports that 74% of organizations were targets of payment scams in 2020. Checks and wire transfers continued to be the payment methods most impacted by fraud activity. Automated payments secure and encrypt sensitive data, reducing the risk of fraud.
- Much longer days sales outstanding: A shorter DSO (think “time to payment”) improves cash flow. A study by Pymnts.com found that the average DSO among organizations that offer automated payments is 40 days; those who have not invested in any automation have an average DSO of 47 days. Without automation, imagine your paper invoice in an empty office, where it may be attended to at the end of the week. By comparison, your easy-to-pay digital invoice appears in the client’s email inbox, greatly increasing the likelihood of timely payment.
Keeping Pace with Client Expectations
Doing nothing about modernizing the processing of your payments will not keep you standing still – it will put you further behind the mainstream. The seismic shift in virtual work models has accelerated the move to automated business payments. Your clients are likely already using automated payments with other vendors and expect legal and accounting firms to offer a digital payments option. Firms that move beyond the fear of messing things up are realizing that an automated payments program can be quick and simple to implement and can be an integrated process within practice management software, and they are moving forward.
- 61% of B2B Payment Survey respondents intend to increase their use of ACH payments in the coming year.
- In the same study, nearly two-thirds of companies – 64% – report that they make more than half of all B2B payments electronically.
Next Step: Explore Abacus Payment Exchange
To sum it up, more than ever, clients prefer to receive electronic bills over paper invoices. Fast, accurate, automated and secure are the watchwords for digital transformation.
Adopting an all-in-one practice management solution with automated payments means you can accept online payment methods with easy management and reporting. An integrated payment system, Abacus Payment Exchange works with AbacusNext practice management platforms, as well as with QuickBooks and Microsoft Office 365, so your firm can benefit from one fully connected ecosystem.
Move your firm to an integrated platform that manages your practice and payments! To learn more, read our post “Beyond Pay Now.”
Questions? Talk to an AbacusNext representative: +1.888.994.8615