Do you like your cashflow… hot, mild or lemon and herb?

Billing is often the painful portion of running or starting a business… the easier parts would be providing the service you offer, the support and the big smile… with all of that in mind starting or trying to establish a business also means that you often wear many different hats and billing is not really given the focus it deserves.

Every Penny Counts:

Starting out it may be simpler and easier to just start sending out invoices via more manual platforms like Excel, Pastel or Quickbooks etc, but as your business starts to grow you will find that this will become a total administrative nightmare, and the billing component of your business becomes crucial… because cashflow is the lifeblood of any business.

As your business grows you will also start to find that invoicing is not the only portion of billing that becomes crucial. You will require an comprehensive  solution that allows you to receive automated payments, monitor overdue accounts, issues payment reminders, host audit logs of your billing data…. your services may change and you will require more complex billing rules etc.

Hoping to just pull everything together at the end of each month, and relying on your memory to decide who to invoice for what, when to adjust a prorata amount…finding that notebook that you drafted your income and expenditure down is very poor strategy when it comes to such a critical part of your business.

This really begs the question — should I wait for my business to grow before I start committing to a billing system?

A common misconception is that billing or software systems are going to be a huge expense and therefore, in the beginning, billing does not receive the necessary priority when it comes to  budget allocations.

This right here is really one of the core visions that we have had for SnapBill from the very beginning, a billing system that in conjunction with payment gateways— would offer both the guy starting out as well as the enterprise business… a solution that will cost him (or her) less than achieving it all manually or at the expense of an accounting department.

We have encountered clients who are willing to spend R3000 on internet bills every month, but cringe at the prospect of paying R216.60, for a Startup billing package that would be a large determining factor on the accuracy of his income— which is essentially his cashflow to pay those Internet bills.

On the note of R216.60, yes this is what it currently costs to run a Startup package on SnapBill (a Nandos Family Meal costs more).

Let me just actually literally un-bracket that for you quickly:

X2 Full Chickens, X3 Large Side, X6 Portuguese Rolls and a WHOLE 2 Litre Coke….

SnapBill_Nandos_Meal

(we like ours HOT, just out of interest)

For all of that (and even a 2 litre Coke), you could make use of an entire billing system, to automate your invoicing, run debit collections, accumulate reporting data, send out unlimited bulk emails to your clients, run payment warnings, sell your services online via our signup forms, add additional permission based user logins for your employees, build custom billing rules to match your billing requirements, run bulk imports or exports on your data, load an unlimited amount of clients and banking details to be stored, send out 50 invoices for the month and have access to our CDV checker to validate banking details.

I think the only question left should be, what tastes better? Nandos or Cash?

(Yeah we like our cash HOT too.)

The sooner you incorporate a billing system into your business, the less kinks you will have to iron out at the end of the day and you will be ready when you land that big client because figuring out your billing system afterwards or as you go along is not an ideal situation to be in.

Your business growth will determine your billing needs, so as you grow you will gradually upgrade to the appropriate SnapBill package. There is therefore no need to make any giant leaps, but by using SnapBill you will have started building a solid foundation for your business from day one :).

Debit orders, mandates and naedo explained

What are debit orders and how are they processed?

Debit orders are payment instructions provided by a third party (service provider) to the bank account of a paying customer in terms with the authority (debit mandate) granted by the customer of the third party.

In simple terms, this is the permission granted by a customer to a service provider to collect money from their bank accounts/credit cards without the customer having to initiate the payment, it is an automated process.

Debit orders are commonly used to collect monthly premiums on insurance products, magazine subscriptions, bond repayments, medical aid premiums etc. Wherever there is a subscription service, there will always be a need for an effective means of receiving payment.

Debit orders are particularly useful in the subscription service industry as it protects both the customer from i.e perhaps forgetting to make payment which could render a suspension on their service and also protects the service provider from having to deal with non-payment.

The most crucial component of running debit orders, is having proof of authorisation — debit order mandates.

Service providers are required to obtain either a signed or voice recorded debit mandate from it’s customers. These mandates generally authorises a payment collection on a specific date (or repeatedly on a fixed date) for a specific amount or variable amount with an upper limit if for example there is a 10% increase in fees each year.

Once debit orders are processed on a customers account, the information of the transaction will then be reflected on the customers bank statement with a reference to the source of the debit. Some payment gateways that collect funds on service providers behalf, do not provide the service provider as the source of the collection and instead reference their name.

You may want to confirm how your payment gateway sources it’s reference to avoid customers becoming confused and resulting in the disputing of payments which in turn raises your dispute and unpaid rates.

If the payment reference is of significant importance to you, we would suggest that you make use of a 1st-tier payment gateway.

1st-tier payment gateways provide you with an account that ties in directly to Bankserv, collecting funds directly into your account, whereas other gateways act as a third party collector who collects on your behalf via their own account at Bankserv.

At SnapBill, we are integrate with Direct Debit, a leading 1st-tier payment gateway. Direct Debit provides the only debit order collection facility in South Africa which allows for obtaining authorisation via signed electronic debit order mandates.

NAEDO – Non Aunthenticated Early Debit Order

Non-Authenticated Early Debit Order (NAEDO) aims to level the electronic debit order collection playing field by creating an equal opportunity for creditors to collect funds from their debtors. The NAEDO system is a National Credit Act initiative launched in September 2006, which allows bank accounts to be “tracked” for funds after “bulk credits” (e.g. salaries) had been posted to the account.

A collective demand was established by various role players within the payment collection industry for a more comprehensive solution for payment collection that benefited both the creditor and debtor.

According to the Payments Association of South Africa (PASA) – here are some of the issues that gave rise to the demand:

  • Unsuccessful collections – some customers withdraw cash from their bank accounts as soon as it becomes available, assuming that their debit order obligations have already been deducted. This leads to unsuccessful collections and unpaid transactions.
  • Illegal practices – Some lenders pursued various avenues to overcome the above in order to protect their capital. These included card and PIN storage, preferential payment collection systems and sort at source arrangements. Access to preferential payments mechanisms was not available to all lenders due to varied risk profiles, with the result that certain classes of beneficiaries always had access to account holder funds before others.

Find out which of our supported payment gateways provide NAEDO facilities here, or chat to us about the various debit order options available with SnapBill.

Welcome to the Wiki

In an effort to perfect our billing world… we’ve taken our support site and completely revolutionised it.

We have designed a Wiki-styled support hub for all things SnapBill related, you will be able to find detailed descriptions about every function within SnapBill… tutorial’s, advice and regularly updated know-how’s.

Use the Wiki to search for anything you are struggling with, follow our getting started guide and you will be well on your way to Super-Snap-Billing.

Continue reading Welcome to the Wiki