Introducing... Custom Monthly Recurring Billing

You can now customize the monthly recurring invoice day used on each proposal you send in Ignition. This means that you can issue recurring invoices (and collect payment) on different days for each client or proposal as you or they wish.

Do you want to invoice half of your clients on the 1st and the other half on the 15th? No problem. Your client, John, wants his payment to be collected on the 12th. You got it John!

With this latest update to our billing engine, custom recurring invoice days per proposal, it’s now even easier to solve the typical cash flow scenarios that service businesses are challenged with.

Later in this blog you will find the following tips from Ignition client, Julie, to learn about her top three tips for taking advantage of flexible billing in Ignition:

1. Set up and receive client payments automatically (without ever touching her ledger), and spread the Accounts Receivable throughout the month to ensure there’s always enough cash to pay the bills.
2. Adapt to your customer payment day, so it's easier for them to consolidate all their bills, including your bill, to a single day.
3. Eliminate your debtors by offering custom payment plans that work with their cash flow.

Let's start with a bit of background...

There’s one sure-fire way to guarantee positive cash flow for your service business: get paid.

Simple, right?

Well, small businesses all over the world have proven that it’s not so simple. According to MarketInvoice’s Late Payment Insights 2017 report, the world has a significant issue with getting paid on time:

So, knowing that a disproportionate number of SMB’s are not getting their money on time, is there anything that can be done to ensure that an invoice is never paid late again?

Yes. That’s exactly why Ignition exists. To solve the cash flow issue for services businesses once and for all.

How?

Through smart contracts which set proper expectations about the scope of work and automatically collect payments for both one-off and recurring services.

Why does this work?

Proper expectations removes friction and significantly enhances your bargaining power in terms of asking for payment upfront. Based on an agreed payment schedule, your PI contract will then automatically collect payments from your clients. It will even set up AND reconcile your invoices in Xero and QBO. You literally don’t have to lift a finger to run your Accounts Receivable.

The stats behind asking for payment upfront.

Service providers are often uncertain as to the best time to ask for billing information and will typically wait until the client has signed off and the onboarding process has begun. Unfortunately, this results in a disjointed workflow and multiple requests directed at the client.

As such, thousands of firms are moving toward the best-practice policy of collecting payment information during the sales process. Why? If a client is willing to provide payment information and agree to a payment schedule during the proposal process, it’s a good sign that they’ll be an ideal client. However, some firms are worried that their client won’t accept their proposal due to the perceived friction of asking for payment information upfront.

It’s worth noting the following statistics from Ignition in 2017:

So, if you were skeptical that clients would be willing to provide their payment information to you during the sales process, we hope these stats help you gain confidence in asking for it. This process does require clear communication and expectation settings around how you’ll be collecting payment from the client, but it will result in seamless payment collection and a better client experience.

With the latest update to our billing engine, custom recurring invoice days, it’s now even easier to solve the typical cash flow scenarios that service businesses are challenged with. Let’s meet Ignition client, Julie, as she shares her top 3 tips to achieve predictable cash flow and a great client experience all at once

Julie is an accountant. Like most professional service firms, she has bills she needs to cover on a monthly basis: Rent, software subscriptions, employee wages, phone and internet; the list goes on. After getting burned several times by clients, Julie made a strategic decision to only offer fixed fees for her services. Not only does it give her clients a better experience than the traditional hourly rate (no surprise bills!), it gives Julie predictability in her cash flow. Using Ignition, She’s even able to automatically forecast her monthly recurring revenue for the entire year using the dashboard.

Here’s a look at Julie’s typical month of (major) bills:

As we can see, vendors are requesting payments of all sizes from her consistently throughout the month. Had Julie stayed on the typical path that service businesses follow when it comes to Accounts Receivable (send an invoice and wait for the client to pay it), she could easily struggle to pay her own bills on time, thereby contributing to the global proportion of overdue invoices herself!

However, Julie was smart (well done, Julie!) and when she switched to fixed fee billing, she decided to plan her cash flow around her vendor payments. Using Ignition’s custom recurring invoice day feature, not only will she receive her client payments automatically (without ever touching her ledger), she can spread her Accounts Receivable throughout the month to ensure there’s always enough cash to pay the bills.

Julie's receives a call from a new prospect, John. Julie does a wonderful job of uncovering his needs and they’ve moved forward to the contract stage of the sales cycle. While discussing payment terms, John mentions that he pays his employees every month on the 12th and he likes to pay his supplier payments on the 12th as well. It just makes it easier for him to remember to pay his bills.

Julie is happy to accommodate this. First things first, she tells John that he won’t even have to worry about remembering to pay her bill, because he can set up automatic payments as he signs the contract. then, with Custom Monthly Recurring Billing, Julie can keep John happy and ensure that she collects payments from him on the 12th of each month. Simple as that! John is thrilled that she can accommodate his request AND take one less job off his hands.

Despite all the amazing changes that Julie made in her business to achieve predictable cash flow, she still has some significant debtors that are haunting her from her hourly billing days. Julie is determined to collect these outstanding debts but she’s conscious that some of her clients won’t be able to take the cash flow hit themselves. So Julie gets creative and reaches out to her clients with the largest outstanding debts to offer them a payment plan (For Julie, collecting part of the debt each month is always better than not collecting at all).

Her customers are on board with this so Julie quickly creates a proposal in Ignition and sends it off. The client enters their payment details and signs the contract, and Julie is now on the fast track to wiping out her debtors. Easy peasy!

It’s so easy, in fact, Dom Papaluca from Rise Business Solutions was able to use the same method as Julie to eliminate $380,000 in debtors:

Source: Dom Papaluca, Rise Business Solutions

Our mission here at Ignition is to see service businesses of all types take control of their cash flow and eliminate late payments from their business. If you'd like to try custom recurring billing days for yourself, start a free trial by clicking the "try it free" button below, or log into your existing Ignition account.