Today, I want to show you how to improve your cash flow.
Speaking to one of my clients recently, he was saying to me, “Rudi, our debtors days is at 240 days, we are just such nice people, how do we get it fixed?”
So here’s the thing, taking control of your lock-up, that’s your debtors and your work in progress. It is actually really simple. Yes it is a process, and there’s a number of things we got to do, but in this short video I will explain to you one element, just one little step – this one step of a big bigger hole.
So this step is all about using direct debit. I know a lot of us use things like standing order, and that’s okay. But these days, setting up direct debit is really easy. So the website that we recommend to all our clients is a website called www.gocardless.com.
GoCardless.com is a really effective website. Transactions are really cheap. I think they cost 1% of the value, up to a maximum of £2 per transaction.
So the question is, why would you do direct debit as opposed to standing order?
Well, direct debit puts you in charge.
If you agree upfront with a client – this is how you’re going to pay, when you’re going to pay, and here’s the direct debit, obviously they still have to fill in the details, but it takes seconds to set them up in the website. The website will send them an email automatically, they put in their bank details, and then send them back, and that’s the authorisation done. It is set-up then. It means you can set up recurring payments on a monthly basis, ideally for the year in advance. Or if there’s an occasional one off payment you need to take, you are in control as well.
So again, reason with direct debit versus standing order, because you are in charge of your money.
So in summary – start using GoCardless, go on and register for free with it. It’s a completely inexpensive option, it will put you in charge. Put it in as a system for all your new clients coming on board. And then with your current clients, go through a process over time of shifting them over.
Now, we’ve got a step-by-step process to explain exactly how to do this, with a script word for word for it, obviously this video is a bit too short to go through all of that. But even without, you can still start putting something in place. Because that will put you in control of your cash, and if you’re like most of our clients, within a matter of months, you will see loads and loads of cash appearing in to your bank account.
So here’s one question for you, if you did have a direct debit set-up in your practice, putting you in control of your cash collections, and your cash flow, what would that do for your practice?