From XU Magazine, 
Issue 26

The payment method that helps your clients sleep at night

Learn how iwocaPay is changing accounts receivable for good

When Stuart discovered iwocaPay, he was looking for a way to help his clients stop worrying about cash flow and focus on the future of their businesses.
This article originated from the Xero blog. The XU Hub is an independent news and media platform - for Xero users, by Xero users. Any content, imagery and associated links below are directly from Xero and not produced by the XU Hub.
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Manchester accountant Stuart Hurst leads the Northern Hub at Accounts and Legal; helping clients set and reach their goals using smart tech integrations to give a service that goes beyond traditional accounting.

The challenge

Unpaid invoices cause unnecessary stress and cash flow squeezes for both clients and accountants. 

Over time, Stuart found himself doing more and more work to help his clients with cash flows - especially during the pandemic. For 9 out of 10 of his clients, their payables  were ‘massively outweighed’ - sometimes by over six figures - by their outstanding invoices. This was a stressful strain on cash flow. More importantly, it is an avoidable problem.

Generally, clients were taking a ‘hope for the best’ approach to getting paid, reluctant to chase payments for fear of damaging relationships with customers. ‘There’s a tendency to pay who screams the loudest. If you don’t ask for it you don’t get.’ Ultimately it leads to a chain of cash flow juggling, where someone’s waiting to be paid so that they can pay someone else. It’s a lose-lose situation for everyone involved and it needs to stop. 

The situation was worse for clients who were already giving their customers more flexibility and extended payment terms. It meant they were always footing the bill either by waiting for people to pay and not getting the money all in straight away or by just them not paying it.

For clients that were looking to grow rapidly, they needed the cash to invest in their business and reach those heights. ‘Cash flow is the key to expanding, for accountants and their clients! It’s quite exciting to work with clients who are looking to grow and, if the bookkeeping gets bigger and you start doing more strategic stuff, it means with larger fees for you too.’ Stuart needed a solution that would help his clients get the cash they needed in the bank sooner, without relying on them to chase after it. 

“One of the things that keeps you up at night is the money you’re owed. It’s [iwocaPay] certainly something my dad could have done with 20 years ago, people not paying promptly certainly wreaked havoc on our lives for sure. Especially right now with COVID there are a lot of people under financial pressure.”

The solution 

A simple checkout process that gets clients paid up front while giving their customers flexibility.

Stuart has added iwocaPay to his payment tools alongside Stripe and GoCardless. iwocaPay goes beyond facilitating payment and adds a simple checkout to your clients invoices; their customers choose to Pay Now or Pay Later and spread the cost over 3 months. ‘It’s sorted right at the start of the relationship, there’s the invoice and here’s the terms you pay it on. They can decide if you want extra time there and then and then it’s not our clients’ problem if they don’t pay, it’s iwocaPays’!’ 

Unlike the others, with iwocaPay up front payments are free for your client and their customer. ‘Pay Now is great and it’s free - so it saves a few pennies for those that are really watching the cost and makes paying easier.’ If they opt to Pay Later your client pays a 3% fee (charged at the end of the month) to cover the credit and collections costs, and their client pays interest after 30 days. It’s a ‘pay as you go’ model based on usage, there’s no subscription fees or payment charges. No matter what the customer chooses your client gets paid the full amount the second their customer checks out

‘From a customer perspective it’s great, I haven’t seen many businesses offer 90 days, and certainly not in such an easy to access way, particularly on the range of invoice value - so even businesses on the smaller side make use of it right up to the larger firms. And from our clients perspective the fact that they can get that money straight away without any risk is really appealing, particularly for those that are working in industries where it can be difficult to get paid or the payment structure is often spread out - it’s a great way of offering customers extended terms but you still get the money right away. It’s one less thing to worry about. You sleep a little bit easier at night, which is a bit cheesy, but true. It’s fit really well.’ 

Better yet, iwocaPay integrates seamlessly with Xero (with more platforms in the pipeline) making reconciliation effortless. “I love the fact that everythings connected. Xero is my absolute favourite accounting product. It’s our main tool, but you can’t just stop there, that’s just ridiculous in this day and age. Otherwise you’re leaving value on the table.’ With iwocaPay Stuart can get even more visibility into his clients finances, helping him work with clients to create strategic plans and make real improvements - going above and beyond just saving tax money and setting up compliance.

The pitch

iwocaPay’s straightforward setup and hands on support made getting clients on board easy. 

Some things take a lot of time to explain to customers, even just to get them to understand why it’s useful. Not iwocaPay. ‘It’s not complicated to show someone this, it’s an easy sell, you don’t need proper time to go through details with them, it’s very accessible and it’s a quick win on the payment side of things.’ When it comes to getting clients comfortable introducing it to their customers, iwocaPay has a whole host of resources and support available to them. Your client will get a launch pack and a dedicated account manager as soon as they sign up so they can get the most out of iwocaPay as quickly as possible.

Stuart took a systematic approach to rolling iwocaPay out to his clients, focusing on 5-10 he thought needed it most first. ‘Phase one is: who would this make life better for almost overnight.’ He organised calls with them and walked them through the iwocaPay demo journey. 

After that, look at clients who use more traditional payment methods that come with a standing charge. Next, feature it on your website, blog, newsletter or social media as a ‘new tool in the toolbox’. Stuart even has a mini newsletter at the end of his invoices showcasing upcoming features. Sharing videos is something Stuart has found work especially well in the past, ‘clients who I wouldn’t have thought would be interested will see that and contact me about it, so it’s quite nice to do that kind of stuff to to get them to reach out as well.’

Overall, Stuart is excited that his clients have a new tool to help them get paid. ‘The accounts receivable bit of accounting is always an interesting one because it’s the bit that often gets the least love but is the most important. We still find that asking for money is a bit of a taboo among clients and it’s still difficult for people. We’re always thinking about what actions can we actually take to make something better - iwocaPay is one of those tools that makes accounts receivables better and as a trusted advisor it’s our job to tell them about it.’

Why leave it there?

To find out more about iwocaPay and why it was built to get B2B invoices paid

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