28 Sep Three ways to leverage technology so you and your suppliers get paid on time
Many people have heard the saying ‘money makes the world go round’. As digital transformation continues to drive economic growth within an ever-expanding digital economy, this seems truer every day. However, for many managed service providers (MSPs) and independent software vendors (ISVs), money can be a particularly challenging part of doing business.
By virtue of their work, MSPs and ISVs operate using business models that combine significant upfront costs with go-to-market strategies that result in revenue being collected monthly. This creates a mismatch in cashflow between MSPs and ISVs and their clients.
There are three steps that MSPs and ISVs can take to help mitigate this challenge to get paid, and also ensure your suppliers are paid, on time:
- Clearly defined (digital) contracts: clearly defined, written customer agreements are fundamental for business. They outline details for all parties including fees, charges, and billing periods, as well as any penalties for late payments. Organisations are increasingly leveraging digital contract tools to better manage workflows and streamline processes. This leads to better business experiences and, ideally, faster payments once the contract is signed and finalised.
- Establish quick and easy payment options: convoluted payment processes can create barriers to operations, so it’s essential that companies invoice quickly (and accurately, per the terms of the agreement). MSPs and ISVs should offer a range of payment options to their customers where possible, including requesting deposits upfront. This provides flexibility around payments while simultaneously guaranteeing an upfront payment for the business and eliminating the need to chase late fees as much as possible.
- Monitor and report on payments: by consistently monitoring payments and regularly reviewing invoices issued against projects completed, MSPs and ISVs can keep a better eye on their finances. Through reporting tools and schedules, they can ensure every invoice and payment meets the terms agreed with the customer, while immediately following up any outstanding payments.
Leveraging digital solutions can help to streamline operational processes, including securing payment from customers. This is why MSPs and ISVs are increasingly using technology financing partners to support subscription-based services and pay-as-you-go models. It lets them streamline the payment process and reduce mismatched cashflows.
BidFin provides a suite of competitive and easily accessible payment solutions for IT services that support sales and help to improve cash flow. BidFin delivers products that cater for the entire IT supply chain throughout the acquisition and retention of customers. For more information about how BidFin can help streamline your operations and help boost cash flow, visit https://www.bidfin.io/for-msp-isv/