The unexpected side benefit of BPAY
Several years ago the agency’s accountant introduced a new payment rule in an effort to smooth out the cash flow: the team couldn’t start a project until the customer paid a deposit (30-50 per cent of the project fee). Doyle reports this rule reduced some of the agency’s exposure to bad debt, though most deposits still took days to clear, as the majority of small businesses rely on electronic funds transfer (EFT): “If the customer did the EFT after 6pm on a Wednesday we’d sometimes have to wait until the following Monday – that’s not good when I’ve got to pay people on a Friday.”
This year Doyle’s business introduced a simpler payment method: “We went with BPAY because it’s easier. You know the credentials. Plus, I think that by putting the logo on our invoices helps us get paid faster. Anyone who has paid a Telstra bill knows how secure and trustworthy BPAY is and it’s a brand my customers trust and were asking for.”
Doyle reckons BPAY was easier to set up with his bank compared to other payment systems (“Some of the others make you feel like you’re going for a mortgage!”). He estimates the business also saves three to four hours a week that used to be spent working out which projects were paid for.
The main thing about BPAY
“Now we have BPAY as an option on all our invoices, it’s easier for customers. Their payments appear straight in our bank account the next day and we don’t lose the time we used to reconciling payments by EFT,” explains Doyle. He adds that faster payment processing means customers are more committed up front (It stops clients changing their minds), and the option for regular monthly payments also helps things along. One benefit is that the agency can not only start projects faster – it can complete them sooner, too.
“BPAY is a trusted name and it makes my company more reputable by offering it,” concludes Doyle. “Yes, there’s a lot less chasing payments, less trips to the bank and lower transaction costs. The main thing is that BPAY helps us accelerate cash flow – getting paid faster is what it’s all about.”
Making payments simple
Keith Brown, BPAY’s general manager of Business Services, explains how the billing service can make life easier for businesses collecting around 100 payments a month.
“In our research we found that 92 per cent of Australians are aware of the brand, so when billers have BPAY on their bills, they tap into the brand recognition and the credibility that’s associated with BPAY,” notes Brown. “Nearly three quarters of Australians already use BPAY.”
- Make it easier for customers to pay
“Display the BPAY logo prominently on your bills so that customers know you’re using Australia’s leading bill payment service. By being part of BPAY, small businesses also get access to the innovation that the banks provide around payments. It means your customers can quickly and securely make payments within the bank systems they’re comfortable with, including mobile banking apps and other online banking channels.”
- Encourage customers to pay on time
“BPAY appears in your customers’ bank systems alongside their account information. Customers often want to know they have money in their accounts first, whereas with other channels, such as credit card or direct debit, they can’t be certain. It’s like having your wallet open: you can see how much money is in there and decide when to make the payment. A large portion of consumers use their bank system’s payment scheduling functionality when they receive a bill to make a payment on or near the due date. They’re comfortable that the payment has been made and they don’t have to come back to check it.”
- Get payments the next business day
“We have rules within the system that ensure payments are processed overnight and in some cases sooner. If a payment is made before a bank’s cut-off time, generally 5-6pm, the biller will get the information the next day but they’ll see the value on the same business day. The BPAY payments are cleared funds, so there’s no ability to charge back those payments, and the biller receives funds that they can spend straight away.”
- Simplify reconciliation
“It’s simple to set up with your bank. Every business gets its own biller code, which is easily identifiable, and you can choose how you’d like to assign reference numbers — such as an account number, mobile phone number or invoice number. These references make it easy to track each payment. You’ll receive daily payment files designed for easy importing into your accounting system so you can quickly see who has paid you. It can free up more time for running your business, rather than working out who has paid and who needs chasing.”