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What Is A Customer Payment Portal?

john — Mon, 09 May 2011 16:33:43 +0000

Payment Portals and Electronic Invoicing
In their simplest form, Payment Portals are a way for customers to pay their bills without the need to print and mail a check. Combined with Electronic Invoicing, they can be a very powerful technology for both suppliers and their customers:

Customers can not only pay their bills online, but also have quick easy access to all their account, invoice and balance information.
For suppliers, it can be a significant expense avoidance/ productivity tool that encourages customers to self-service their accounts and avoid the need for phone calls and follow-ups.

Let’s see how this can work.

First, rather than sending a paper invoice, the customer is emailed an electronic invoice or group of invoices. The email itself summarizes the amount due and lists the invoices which are attached as a PDF or other electronic document.

The email and each invoice contains a link, which when clicked, immediately takes the viewer to the Customer Payment Portal website which:

lists the customer’s open invoices for payment.
allows the customer to select the appropriate invoices
gives a selection of payment methods (ACH, echeck or credit card)

What could be simpler?

The expense and environmental impact of paper is avoided for both the invoice and the check.
For the supplier, no invoice needs to be printed, stuffed and mailed; on the return end, the check is not held up in the mail and does need to be opened or processed by a bank lockbox and applied to the customer’s account.
For the customer, no check needs to be printed, stuffed and mailed.
No postage is needed on either end.
Everything is quick, efficient and environmentally friendly.

Payment Portals can also offer much greater levels of functionality. I’ll go into that in my next post.

Getting Paid Painlessly

Ken Roberts — Fri, 29 Apr 2011 21:28:36 +0000

Everyone is hurting with the economy the way it is. Technology is adding to the confusion by providing new ways that customers want to pay at a blinding speed. It can get confusing with all the new options available, and it seems to take more resources than ever to handle all the possibilities.

How do you cut your costs, get the money you are due and manage all the headaches at the same time? Here are some ideas that might reduce the noise a bit:

Plastic, not paper. Dealing with cash or checks costs more than you might think. You have to handle it, count it, move it from your drawer to the bank, all with human hands, and it takes time. Businesses which handle cash also pay higher insurance premiums. Much of the same logic applies to handling paper checks.
People are using their credit cards more and more. Despite the fees, accepting plastic or checks electronically cuts out all the costs and many of the errors of humans handling paper money.
Electronic invoicing has become commonplace, and online payment is building steam. These things started slowly but have been steadily gaining ground. More companies offer electronic invoicing and the convenience of it all has tremendous appeal.
Using electronic payment eliminates all the time normally spent in real-world transport of that cash, which means you get paid faster.

Online invoicing and payment centers are ultimately more convenient for today’s well-connected people. We’re busy, always on the go. We want to see it, pay it and get it over with in a moment with the least amount of bleeding possible. If you’re going to go that route, follow that strategy as far as you can.

One thing common in online invoicing is an overabundance of images and advertisements. There are several things wrong with that approach. If it looks like spam, they’ll push it over to their spam bucket and it will never be read. Their email client will then start recognizing your invoices as spam, and they will never see an invoice again. Even if they know it’s a bill, why would they want to wade through all the junk to get to the bottom line? Finally, why pay somebody to jazz up an invoice when really all you want to do is get your money? Keep the advertisements separate. It doesn’t cost extra to send two emails instead of just one. Just put a simple link to your website at the bottom and you’ll be covered.

Your invoice should look like an invoice and have as few extraneous details as possible. The only graphic additions should be there to validate the origin of the message or clarify the content. The entire message should be designed for exactly one purpose: Let the customer pay the bill as simply and quickly as possible. No fuss.

Your online customer portal should be the same: They should see the current balance with a “pay now” button as soon as they log in. They should be able to easily see their billing and payment history. They should be able to dispute all or part of the bill, and add notes and see notes for each invoice.
While they’re paying though, it won’t hurt to add in a check box for “Make this payment automatically” or “Send me offers for programs that may help me.”

ACH – Payments Your Business Can Bank On

John — Mon, 18 May 2009 19:53:00 +0000

The Automated Clearing House network (ACH) provides an extremely reliable and effective system to transfer funds electronically from one financial institution to another. This includes recurring billing, pre-authorized debits, internet / telephone payments and checks converted into ACH payments. It is estimated that the number of items paid through the ACH network will continue to double every 5 years. Now how can your business benefit from providing ACH payment options to your customers?

The most obvious benefit to an ACH payment would obviously be the speed at which the payment for your goods or services are transferred to your account. Remittances are typically transfered in the early morning hours before the banks are open, with this being the case ACH payments are processed before paper items, and available funds are committed to those ACH items on a first in, first out basis.

Another benefit is automatically realized by your businesses accounts payable department. As your customers adopt ACH as their preferred method of remitting payments there will be a direct reduction of paper check processing. With the addition of check processing scanners, even customers who insist on paying with a paper check can have the funds for their payment processed easily through ACH.

As the economy continues to tighten it’s belt there are ever increasing concerns regarding audit trails and insufficient funds notification. Providing a solid audit trail for remittances and deposits is easily managed through ACH processes. Each transaction is uniquely identifiable and search-able. This includes, origin, destination, dates, amount and other information which follow NACHA operating rules and Federal reserve guidelines. ACH also allows for real time notice on insufficient funds regarding payments. With this the item can be directed to collections in a timely and efficient manner ensuring the best possible odds of collecting the balance due.

There are many more benefits to the ACH process including, better customer relations, improved cash flow on recurring or monthly payments, and making it easier for your customers to pay in a timely manner without reminders and follow ups. Visit Greenbill.com for more information on our ACH services for you and your customers.

The Cost of Paper

John — Wed, 06 May 2009 17:51:10 +0000

We all heard the stories, computers would eliminate paper. There would be no need to print pages and pages of hard copy, all your important documents would be available at your fingertips. Unfortunately with the evolution of the computer and increasingly cheaper plug and play printers, paper usage has increased tremendously.

With a simple mouse click or two, reports are generated, invoices printed in triplicate and letters, complete with typographical errors are created, most only to be thrown away either at the source or final destination. What is the true cost for a single page document to your companies bottom line? What are the ways to reduce this waste of both resources and money?

Larry Phelps has kindly provided us with these statistics on the staggering cost and quantity of paper in the workplace. For more information please visit his site and his expertise on efficient and environmentally document imaging. larryphelps.wordpress.com

Over its life-span, a single sheet of paper ends up costing an average of $30. -Delphi Group.
Every year 7.5 billion documents are created and 15 trillion copies are made.
E-mails will double to 60 billion a day in 2 years.
7% of documents are permanently lost.
The average document is copied 18 times.
90% of business information is still on paper.
Misfiled documents cost $120 each.
4-drawer file cabinets cost $25,000 to fill.
and $2,000 per year to maintain. (Source: Coopers & Lybrand 2004)
$14,000 worth of productivity is lost per worker per year due to their inability to find the data they require to do their job.-IDC Canada.
Professionals spend 50 percent of their time searching for information, and take 18 minutes to locate each document on average. -Gartner Research.
US companies spend approximately $20 on labor costs in order to file a document, $120 on the labor required to find a misfiled document and $220 to reproduce a lost document. -Coopers & Lybrand.
Companies typically misfile up to 20 percent of their records – thus losing them forever.

With these facts in mind, it only makes sense, both financially and environmentally to examine the options for online invoicing, electronic payments and software based accounting. All of these provide a significant reduction in paper, paper related costs and environmental impact.

See for yourself , try the Greenbill Green Billing Calculator and find out how much paper is really costing your company.

Are you collecting your invoices effectively?

Joshua Burnett — Mon, 30 Mar 2009 01:54:16 +0000

Measuring your efforts

In an earlier post I talked about calculating your DSO. The most well know way to benchmark your A/R is by using the Days Sales Outstanding (DSO) calculation. It’s a common, well understood indicator that is widely used. The fact that it is so common makes it easy to find DSO numbers for an industry or individual company, both locally and across the world. This enables you to benchmark against those DSO numbers and ask questions about your receivables. You can answer such questions as: How am I doing with my customer base compared to company X in my same industry? Are my terms in line with others in my industry? etc.. However, many credit professionals will tell you that they dislike DSO as an internal benchmarking metric and I will give you an example why.

The DSO problem

DSO is not the most accurate way to indicate if you are collecting effectively. DSO can be misleading as it has a key weaknesses, that is it fluctuates with revenue. Changes in sales inversely affect the DSO. If your overdue receivables balance stays the same an increase in sales for the month will lower your DSO. If you suddenly have a dip in sales your DSO will shoot up. DSO, while valuable for benchmarking, cannot alone give you a clear picture of the performance of your A/R. Three other measures of collections performance include ADD and CEI. These help complete the A/R picture and let you know if you are truly being effective in your efforts to get paid faster.

Collection Effectiveness Index

The Collection Effectiveness Index (CEI) is becoming increasing popular in the credit and collections world. CEI was developed by Dr. Venkat Srinivasan and the Credit Research Foundation (Link). With the Credit Research Foundation collecting statistics, it is also possible to do the same industry benchmarking and comparisons that you might do with DSO. CEI is a percentage that expresses the effectiveness of collection efforts over time. The closer to 100 percent, the more effective the collection effort. CEI is ratio that measures the quality of collection efforts over time. It is essentially the percentage of receivables closed or paid in a given time period. While “Percent Current” has a implied limit of 100%, this is not the case for CEI.

Note: for a definition of credit sales see this post

CEI is a more appropriate measure of performance over time while DSO is for measuring performance at a single point in time. CEI makes comparison with other companies possible just as DSO does. CEI does not change if a company nets their receivables by removing items they deem disputed and therefore un-collectible.

CEI and DSO should move in opposite directions which makes sense. If your collections efforts increase your DSO should decrease. DSO and CEI can, under certain write off and revenue conditions again, track the same way and thus we have another exception.

This leads us to 2 more performance indicators that are important metrics.

Best Possible DSO

The Best Possible DSO indicates the “best” possible days you can collect on your invoices. This measure uses the “current receivables” instead of the total receivables balance. Current receivables is the amount of your A/R that is not past due.
The closer your DSO is to the Best Possible DSO, the closer you are to collecting as fast as possible. You should not expect that you ever hit this number as is almost never possible. Assuming you give 30 days term (30 days to pay), if you can get within a 3-5 days of this you are doing really well.

Best Possible DSO = (Current Receivables x Number of Days in Period ) / Credit Sales for Period

(for a definition of credit sales see this post)

Average Days Delinquent (ADD)

Average Days Delinquent (ADD), which is sometimes called Delinquent DSO, calculates the average time from the due date to the paid date. In other words its the average days invoices are past due. It provides a snapshot to evaluate the overall company’s collection performance but it’s also useful at the customer, customer type, collector segment, etc.. This not the same as Average Days To Pay which is based on the historical information of the actual closed invoice while ADD is based on a snapshot in time (Thanks Terry)

Average Days Delinquent (ADD) = Standard DSO – Best Possible DSO

Example

Summary

In light of the fact that DSO alone does not accurately measure performance in credit and collection, we can now arm ourselves with 2 more indicators for accurately measuring performance; CEI and ADD. When CEI and DSO track the same way because of revenue fluctuation or changed in terms of sale ADD comes to the rescue and takes both into account.

While DSO has its faults, its is a must have indicator because it is so well understood and enjoys wide acceptance amongst financial professional. When combined with the ADD and CEI you can truly get a complete performance picture of your accounts receivable.

The DSO Calculation (Days Sales Outstanding)

Joshua Burnett — Sun, 29 Mar 2009 23:01:14 +0000

DSO stands for Days Sales Outstanding

It is a commonly used measure for the invoicing collection process. Investopedia defines DSO as “A measure of the average number of days that a company takes to collect revenue after a sale has been made”. If you are strictly a cash business your DSO will be 0. If you generate invoices for your customers and give them credit terms (some number of days before they are supposed to pay) then you will will have an accounts receivable balance and thus a DSO . You can use the DSO number to measure the efficiency of your collections. Since DSO is so popular you can also use it as a gauge against other companies in your industry.

Calculating your Days Sales Outstanding

The calculation is as follows.

Example

Here is a very simple example of how to calculate DSO.

A company started June with $700 in receivables (Invoices still not paid from May and earlier).

Lets say the company had sales of $1100 in June.

The company got cash for $100 that was not cash for invoices. Some one came into their office and gave them $100 for a widget that never got invoiced.
They generated invoices with Net 30 day terms (customer has 30 days to pay) for the other $1000. These are “credit sales”. The total Credit/Invoice Sales for June will be $1000 (not $1100 since they got cash for $100 and never invoiced it, the DSO on that cash is 0).
During the month they got payments on invoices of $500.
So $700+$1000-$500=$1200 for their accounts receivable at the end of June. 700 that was still open + $1000 in new invoices – $500 in payments
NOTE: it does not matter what invoices the $500 got applied to or even if it gets applied for the DSO calcualtion. It just matters what the A/R is at the end of June.
Their accounts receivable at the end of June would be $1200. The DSO for the month of June would be $1200/$1000 X 30 (# of days in June) = 36.

A 36 day average to get paid is not to bad. Generally speaking, if your DSO is under 40 (assuming Net 30 day credit terms) you are fairly efficient at collecting your money.

DSO measures efficiency not effectiveness.

In a future article we will show you the problems with DSO. Your goal is to get paid faster and there are other performance indicators that can be used, along with DSO, to get a clearer picture of your collections effectiveness.

Check out this next post in this to get a couple of alternative ways to measure your effectiveness

“It’s Easy Being Green”

John — Wed, 25 Mar 2009 20:31:38 +0000

With all the current focus on the world economy and the challenges we all face each day there has been a marked decrease in the “Green” campaigns which were so very prevalent just a year or two ago. This was brought to my attention not only in print and other forms of media but right at home, when questioned by my 8 year old.

He question to me was, “Why does recycling and saving seem more important when people have less?”

Now this may contradict my opening statement, yet it is very clear that although there is less outward focus on being “Green”, companies and individuals would appear to do more regarding conservation and recycling in times of economic strain. Reusing materials, equipment, and reducing energy usage to save. Swing shifts at the office to reduce heating and cooling costs, electricity usage at non-peak rates and on, and on. The same is very true for individual households. Lights turned off which otherwise would be left on, reducing fuel by commuting less or by public transportation, reusing items which otherwise would be thrown away, it is human nature and one which should be evaluated to help with the quest for a “Green” planet.

Now the challenge is to keep these habits in place during times of economic growth and abundance. Easier said than done? Well, we have begun a list of what we do as a family to help conserve and reduce energy, disposables and resources at our house. The kids have figured that with these notes we can see exactly how our “Green” habits can be retained as economic times improve. By continuing these habits we will be even farther ahead as we move into the future, helping the planet for my children’s children.

Try it at your home or business; you may be surprised exactly how easy it is to be “Green” and to stay that way.

10 ways Greenbill can enhance Quickbooks invoicing & billing

Joshua Burnett — Wed, 04 Mar 2009 03:07:59 +0000

We have received a number of questions on why you might need Greenbill if you are already using Quickbooks and emailing invoices. What does it offer? Why should you bother. I traded a few emails with a friend David Mammano who suggested a simple top 10. Thanks for the idea Dave.

10. Seamless 2-way integration with Quickbooks.

9. Get up and going with Greenbill in minutes. It is painless and leverages your existing Quickbooks data.

8. Get up to date access to who paid and who owes from anywhere online. Works on the iPhone too.

7. Greenbill makes it super easy to get paid online via Credit Card, Paypal, Google Checkout or better yet by ACH/eCheck.

6. Quick and convenient ACH/eChecks. ACH is $0.35 per payment instead of 2-3% of the transaction.

5. Your customers will love the your branded web portal. Its simple, fast and easy to use.

4. The reporting kicks ass. See trends and payment patterns for your customers that you have been missing in Quickbooks.

3. Set it and Forget. You never have to worry about making sure the invoices and reminders get to the right people.

2. Our Customers get paid 10 days faster on average when they use our solution for their invoice delivery, collections and online payments process.

And…..(Drum Roll Please)
1. Go Green and Get Paid Faster. If you are still sending paper out of Quickbooks, STOP IT. Greenbill is good for the planet and good for your business.

Invoices, Friend or Foe, Part 2

John — Fri, 13 Feb 2009 23:20:14 +0000

Now that your customer has been invoiced for your services or products the next step is to have them provide payment. That is the name of the game and this is the hard part. Although your customers are honest and trustworthy, getting them to pay sometimes can be a chore, and the easier it is, the more likely payments will be timely. There are several options which can be provided. The first and least efficient is to provide a paper invoice and a return envelope. This is to be avoided at all costs; it is slow, expensive, subject to human error and may delay payment by several weeks or months. With electronic invoicing and payments, credit card, e-check, lockbox and ACH are all options which reduce payment time and increase payment accuracy. When the electronic invoice is generated and sent payment method links are attached to the invoice. Your customers may then log in to their payment portal of choice and submit remittance against the referenced invoices. Simple, easy and fast, exactly what your business requires to stay ahead of the competition.

Next we will review and detail managing open invoices, tracking customer payment trends and scheduling automatic follow ups for invoices due. With a comprehensive and easy to use work queue for collections, management and collecting your open invoices is no longer a dreaded task. The results, your relationships and communications with clients improve and your company gets paid faster.

Getting Things Done.

Ken Roberts — Sat, 07 Feb 2009 04:32:48 +0000

Business today is frantic. It’s easy to get distracted by the latest emergency that hits your inbox.

It’s important to remember that someone else’s lack of planning is not always your emergency. Even if their situation really is dire, and even if it directly impact’s you, your best course of action may be to put that item down as “next” on your list, rather than dropping everything to deal with this new issue.

It takes a significant amount of time to switch your brain to a new context. See Umich study. Every time you change tasks, you leave your prior task in an unfinished state, figure out what has to happen with the new task and then get started on that. If new tasks keep landing in your lap sooner than you can get the old one done, you have to switch contexts more than once per task. If your tasks change often enough that the context switching takes longer than the time spent doing your task, you are thrashing.

The longer you spend working productively on any task, the more effective you become. When you switch from one task to another before the first is done, you have to add the time it takes to familiarize yourself with the new project to the time it takes to finish both tasks.

We each have several lists of things which needs to be done. We have a long list of things which need to be done some time when you get a chance, like a vacation in a far-off place. This is the sort of thing you dream about, plan for and then some day you go. We also have a list of things which need to be done by a certain time. Sometimes this list gets so long you miss deadlines. The critical list is your short list. This is a small number of things you want to finish today. Sometimes your short list never gets hit because somebody else’s emergency bumped you off of it, and you are working on their list.

If you can manage your short list of things to do, then you can minimize the number of times you need to switch contexts, and by doing so you get more done. When someone contacts you with a task, you need to evaluate that event against your own priorities. If the event is a true emergency, there is nothing wrong with dropping what you are doing in order to help. However, if it can wait long enough for you to finish what you are doing, you can more effectively finish your list of tasks. Better yet, if you can place it further down on your list you can maybe get through your short list on time, saving the new thing for a new day.