Ask almost any business owner, and they will tell you that Cash flow issues are one of their major pain-points. It’s the one thing that is always in the back of their mind. For some of them, it’s what keeps them awake at night. And justifiably so: A recent study by U.S. bank and cited by SCORE shows that a staggering 82%(!) of businesses fail due to cash flow mismanagement.
This information is probably not new to you as their accountant and trusted advisor, and you’re already taking a proactive approach to helping your clients improve their cash-flow. Melio’s bill-pay service can help you with this mission, whether it is you who handles the bill-pay for them, or they handle it for themselves. Here’s how:
1. Optimizing your clients’ payment schedule.
The Accounts Payable part of the formula is straightforward - pay as close to the due date as possible without risking late payment, which might result in late fees and harming your clients’ relationships with their vendors.
Melio allows you to schedule multiple payments in advance, so your clients make the bill payments right on time but not too soon. Once the payment is scheduled, you can track the payment status at all times to be sure it arrives on time.
The Accountants Dashboard allows you to switch between all your client accounts seamlessly without the need to log into each client account, so you can efficiently handle multiple bill payments for all your clients with maximum efficiency.
2. Helping your clients to get paid earlier.
Melio also enables you and your clients to send out payment requests to their business clients, upload or add invoices, track the payment status, and more. All from the same Accountant Dashboard. These tools can dramatically improve your clients’ cash-flow:
- Send payment requests and invoices faster: Many small business owners put off sending out invoices. Some still fill out invoices manually, pen, paper and all, and deliver them in person or via snail mail.
However, the longer it takes before your clients send their invoices, the longer it’ll take until they get paid, and the more adverse is the effect on their cash-flow. Therefore, it is paramount for them to handle payment requests and send invoices as soon as practically possible.
With Melio, you (or your clients) can send out online payment requests with just a few simple clicks, even if their clients are not using Melio. You can upload an invoice, add it manually or upload a concentrated list of invoices, to be sent out in bulk.
- Have better control of how and when your clients are paid: Just as your clients need to get paid earlier, the opposite logic applies to their clients, who have an incentive to pay as late as possible.
Melio eliminates any “the check is in the mail” excuses: your clients’ clients receive an online payment request. They pay online with an ACH bank transfer (for free) or credit card (for a 2.9% fee) and schedule the payment date, with zero hassle. Your clients get an ACH transfer straight to their bank account (even if their clients pay with a card) at the scheduled payment date, at no cost to them.
3. Readily available up-to-date cash-flow reports.
Cash-flow projections and periodic review of cash-flow reports are of crucial importance for accountants in improving their clients’ cash-flow.
But with manual bill-pay, there is generally a discrepancy between what’s in the books and what happens in the “real world,” since payments (whether to or by your client) are not recorded immediately and automatically when they’re made.
This obstacle, in turn, makes cash-flow reports less accessible because you need to eliminate any discrepancies first and make sure the books are up to date.
Melio has 2-way sync with Quickbooks online. All you have to do is connect your clients’ Melio accounts with their QBO accounts. All Accounts Payable and vendor transactions made with Melio are automatically synced with QBO, and automatically and immediately recorded in your clients’ books.
Syncing your clients’ accounts with QBO will make it easier and faster for you to produce up-to-date cash-flow statements and more accurate projections whenever you need to, while reducing to a minimum the effort involved.
4. Increasing float by paying bills with a credit card.
Most credit card issuers provide a 30 (and sometimes 60) day billing cycle. By paying business bills with their credit card, your clients can defer payments to the next billing cycle and enjoy up to 45 days of float, and by doing so gaining an often-needed breathing room in terms of cash-flow without having to resort to taking high interest loans.
The problem is, most vendors are reluctant to accept credit card payments. Here’s where Melio comes into play: Melio allows users to pay their bills with their credit card (for a 2.9% fee for the payor), even if their vendors don’t accept them. Melio sends them the payment either by ACH transfer, or a paper check, per your clients’ choice.
You or your clients can securely add their credit cards as one of the payment options in their account, and use it to pay all b2b bills, including utility bills, rent and more.
5. Allowing your clients better control over larger expenses.
When handling bill-pay for their clients, it is paramount that accountants make certain that an effective approval workflow is in place, so that clients keep their fingers on the pulse with larger expenses and are kept in the loop. A clients’ business decision, such as making a large purchase of goods, entering a new contractual obligation, or doing an office renovation should be an informed one, and sensitive to other upcoming material expenses. Otherwise, such a business decision can have a severe adverse impact on their cash-flow.
That is why Melio allows you to place a limit amount for your clients’ approval. Once set, any payment you make exceeding the limit will be pending until your client approves it. You can set the limit when onboarding your client to Melio, or at any other time.
Using any or all of these five tools will help you to work wonders for your clients’ cash-flow.