[00:00:00] Welcome to another episode of Financial snickens. I'm your host, Alisa McCabe, owner at First Step's Financial, and today we are going to be talking about a c h payments. Now, a c h payments are called Automatic Clearinghouse, and what they are, are, they are transactions that come from your client's bank account directly into your bank account without a check.
Or any other transaction fees typically. So as a small business owner, you know that cashflow, especially steady cashflow is vital to the success of your company. And if your company's gonna grow, you need to be able to count on that every month. So we really need to embrace the convenience of a c h. And I have to tell you, most of our clients, Get that and they understand it.
So we're just gonna talk about how you can increase [00:01:00] your cashflow by leveraging these A c H payments for your clients. So first of all, the first thing is it's a simplified payment process for your clients. They can set up these automatic payments and it creates convenience for them. The last thing in the world that any business owner wants to do is spend time paying a bill.
It also eliminates. The manual need, the need for manual payment collection, so it reduces administrative tasks on your client's side so that they don't have to worry about their, their accounts payable person putting the information in. Bringing them in so they can sign a check. It streamlines that process for your clients.
It is, it is really vital to have that in place for. The benefit of you and [00:02:00] your clients. So the next thing is prompt payment collection. So what ends up happening when you set up this automatic a c H payment system, it empowers you to collect from your clients promptly and as a designated date. So you might tell them, It's due on the fifth of every month, and if you have the ACH H and you have it set up as automatic, you're gonna get paid on the fifth of every month.
You have set the expectations on both sides that your client expects you to pull that money and you. Have told them you're going to pull it. So there's everything is very clear to both of you. You also don't have to worry about missed payments or any delays or any reasons of scheduling, conflict, forgetfulness, you know, lost checks in the mail, any one of those things.
If this is already set up ahead of time. The third thing, you're gonna [00:03:00] get improved cash flow forecasting. So, I think that this is probably the most important. It helps you as a business owner to plan what you're gonna do with the money, you know, every single month, exactly how much money you are going to get on a certain day.
That allows you to plan for paying your own bills. That allows you for growth, that allows you to plan for hiring. It allows you to take advantage of opportunities. So the improved cashflow forecasting, I think is the biggest plus in having payments done on a c h. One of the other benefits to having an a c H system.
Payment is enhanced security. So I know people are afraid of things online, but in our experience, writing a check has [00:04:00] become one of the most unsecure ways to pay people. Either it takes months to get there, even when the check comes directly from the bank. Even when they do bill pay, it can take months to get to you.
Secondly, we have seen checks that are washed, which means that the information has been erased from it, and they write in a fictitious company and then cash the check, and some of the banks are taking these checks. So it's something to think about and that creates a whole host of problems for your clients.
So you could tell your clients that this is a way that you're providing security for them, because this is one of the most secure ways to get paid. It's an encryption. The money comes in through an electric transfer and it's encrypted, and you have to have some security around this payment. You don't ever take the payment through an [00:05:00] email.
You actually have them fill out a form, and if you use, uh, QuickBooks Online Merchant Center, they actually have a form available and you send it to your clients through a secure link and have them fill it out, and then they send it back to you, and then you put the information inside of your QuickBooks file, which you can't see either after you put it in or you make a phone call to your client.
Get their consent and take the information that way because we have seen fraud happen when people say, Hey, uh, can you pay me here and change my bank account banking information? And it's really a scam. So make sure that you are really talking to your client and make sure that your client knows that you will never ask them for information in an email unless there's a secure link for it.
Number five, efficient account management. It will help [00:06:00] you automate your accounts receivable. Your accounts receivable you will spend no time on because everything will already be collected. It will work out on your side and your client's side because your accounts receivable will be zero and their accounts payable for you at least will be zero.
They won't be behind on anything. There won't be any issues and it won't interfere with the work that you're providing for them cuz there's nothing worse than. Reaching out to a client to say like, Hey, we have to stop working because you're behind paying us. That is probably one of the worst things that can happen because it damages your relationship.
So this, when you set up an A c H payment and you put it in your proposal, your engagement letter, your contract, you put it right in the information. There when you start your relationship with them, they know ahead of time ACH H is gonna come out on the [00:07:00] fifth, on the 10th, whatever day you decide. That's when they're, that's when you are going to get paid for providing your phenomenal services to your clients.
It is a game changer. The biggest reason why small businesses go out of business is due to cash. So this will keep you in business so, Keep your clients happy and give parameters on the expectations you have. Small business owners I know are afraid to do this. They're saying, my clients won't go for this.
If you're worried about that and you're wondering how can I leverage this and use these benefits to help my company, I have to tell you, go to your clients and talk to them. Tell 'em you're instilling this new process. Hey, blame it on the accounting department. Say the accounting department says you have to do it this way.
And if you still get some resistance, talk to us. We can help you with it. Head [00:08:00] over to our
[email protected] or shoot me an email
[email protected] and we can talk about how to implement this amazing process that's not only gonna help you, but help your clients. See you later.
