An edited version of this column appeared on Forbes, September 1st, 2010

 

Isn’t it fun waiting to be paid?  Don’t you just love calling on customers when an invoice is overdue?  Or being given excuses like “your invoice got lost” or “we only process checks once a week/month/quarter”?  As a business owner, collecting money is one of my very favorite things to do.  What, you don’t agree?

Kimberly Martinez doesn’t agree.  Like most normal small business owners, she struggles to get money in the door on time.  Her $2 million a year fashion accessories firm Bonitas International LLC (www.boojeebeads.com) sells lanyards, “organza bags” and other things my teenage daughter and wife would buy.  Kimberly’s wholesalers have been taking longer to pay her.  And it’s been frustrating.  So she did something about it.

About a year ago she signed up for American Express’s AcceptPay (www.acceptpay.com) service.  And things have gone quicker and better.  

Now she’s sending out electronic invoices to her customers.  The invoices are customized to her business, showing her logo and personalized messages.  She imported a customer list so the amount of time it took for her to get up and running was minimal.  The invoices are saved and resent each time after she modifies the transactions.  Some of her customers get recurring invoices too, which the service allows her to automatically setup.  This way no billings fall through the cracks.  And billings go out immediately no matter what distractions are taking her attention in the office. 

The invoices get emailed to her customers.  She requests a return receipt to make sure they got it.  And for those especially “fun” accounts, she has someone from her office quickly call just to Make Sure they received the invoice in their email.  It’s so easy to blame non-receipt on those evil spam filters, isn’t it?

The invoices have a link for immediate payment.  Customers can use any credit card, not just American Express.  All they have to do is click on the link, enter in their credit information and….Kimberly’s been paid.  .  The service can also be setup, with a little more effort, to initiate immediate transfers from the customers’ bank account if they authorize to do so.  

This sounds like pretty simple stuff, doesn’t it?  It is.  For small business owners who take a little time to learn it.  And the benefits are significant.

For starters, Kimberly doesn’t have to maintain or manage her customers’ credit card numbers.  “That’s just a lawsuit waiting to happen, isn’t it?” she asks.  It absolutely is.  Mismanagement of personal data, particularly credit card data, has been a growing liability for small businesses.  AcceptPay will take care of that headache.

Time has been significantly cut down.  The customer does the data entry.  Payments are recorded automatically.  Kimberly can synchronize this data directly with her QuickBooks accounting system.  Other customers can choose to just export payment data to a Microsoft Excel file for importing elsewhere.  Data entry errors are minimized.   A personalized receipt is automatically emailed to the customer for their records.  Bookkeeping on both sides is minimized.  And because it’s an online service, the data can be accessed from anywhere.  

”My customers love this” says Martinez.  “They don’t have to process checks.  They’ve cut down on their own paperwork.  They’re not dealing with getting invoices in the mail.  They can pay us quickly.  It’s another convenient option for them.”  

But the big benefit is, of course, cash.  In the bank.  Quicker.  Since implementing AcceptPay Martinez says that her time to collect an average invoice has decreased from 70 days to 53 days.  That’s a 24% improvement.  By knocking down a typical $100,000 accounts receivable balance by 24% over the past year, Gonzalez has earned a couple thousand bucks in interest and gave herself a little more bargaining clout when it comes time to pay her bills.  And her bookkeeper has reduced the time she was spending on collections too.

AcceptPay costs $20 per month for unlimited everything – invoices, cash receipts and all the other bells and whistles.  Transaction fees on credit cards still apply, but they always applied.  A couple of hundred bucks a year to save a couple of thousand seems like a pretty good deal to me.  Sure, I’ll miss the “fun” of collecting from those silly, non-paying accounts.  But I think I can cope with that.