Natasha Goldstein is Founder & Managing Director of The Accountkeepers.
Back to Blog
Hello wonderful colleagues, clients, and friends. Here at The Accountkeepers we love accounting and finance technology. We know from experience that if used correctly, it will save our clients thousands of dollars in back-office costs every year. I often getasked by prospective clients “what’s the most impactful thing I can do to streamline my back office?”. The answer always surprises and is almost never loved.
So, what is the most impactful thing a leader can do to streamline their back office and save money? Three things really, and they’re all related to how you get paid.
Why are these the most impactful things you can do? Simple, they will save you the most time - and therefore money - down the road.
Ever heard of an Accounts Receivable (AR) Clerk? Well, that’s an employee whose sole job is preparing, accepting payments for, and applying payments to, sales invoices. Most companies who send invoices by mail, accept check payments, and generally do not automate their invoicing process end up needing an AR Clerk. AR Clerks usually make about $15/hour, so a full-time AR Clerk will cost you, with benefits, roughly $37,500 per year. Following the three steps laid out above cuts out at least two-thirds of the work involved in the invoicing process, and often negates the need for an AR Clerk altogether!
When you enable these payment options in QBO, you allow QBO to do this work. Invoices are sent directly from the system, payments automatically come in via ACH or credit card (which eliminates the “accepting payments” part of the Clerk job), and Quickbooks applies that payment to the correct invoice (which eliminates the “applying payments to sales invoices” part of the Clerk job). All that's left is preparing sales invoices.
Some of you may note that QBO's credit card processing fees are not as competitive as other firms such as Stripe. This is true. If you are going to be doing a lot of credit card sales (high dollar volume), I would look into cheaper options as those fractions of a percent will matter in the long run. For those who only allow certain customers to pay by credit card, and the dollar volume will be low, I would recommend just using QBO. The ease will outweigh the small cost savings.
As for checks, well, if you receive a paper check, you can’t automate anything, even if you follow steps #1 and #2 above. Someone has to deposit that check, and someone else has to apply that payment to the correct invoice. I cannot stress enough how much I encourage a no check policy! You may only have "a few" clients now who pay by check, and "most" pay electronically, but the number of check payers will grow, and with it, so will your back-office costs.
Overall, I can't express how many companies I run into that would save tens of thousands of dollars per year if they moved to electronic invoicing and payment. Your company may only have a dozen invoices per month now, but that number will grow fast, and the time needed for invoice management will grow with it.
Most entrepreneurs and financial leaders I work with don’t like this advice. They don’t want to rock the boat with customers. They see revenue coming in the door, and the last thing they want to do is make it harder for that to happen! But here’s the thing: I’m not sure a customer has ever stopped working with a vendor because they didn’t accept paper checks, or because they required them to pay via Quickbooks ACH payment or a similar service. Sure, very large companies (think Microsoft) and government agencies may force you into it, but the bulk of customers will not.
So you're convinced! You will stop accepting checks, send invoices electronically, and accept payments exclusively through your invoicing system. How should you do this without annoying your customers too much? Here's an easy idea: give them $25 off their next order with you as a thank you for their understanding in implementing this change. That goes a long way! And now, you're paperless.
At The Accountkeepers, we help companies automate their accounting processes every day. We completely change the back-office of our clients, allowing them to grow without seeing an equal increase in back-office costs. Sometimes it takes a few months, some habit changes, and some education, but it always ends better than it started. If you think your firm could benefit from our work, give us a call today. And if you know a startup about to begin making sales, forward this Tip along, it will benefit them in the long run!