Long-term losses continue to plague the U.S. Postal Service. Unfortunately, for the agency that appointed Benjamin Franklin its first Postmaster General in 1775, the COVID-19 pandemic is creating new financial and delivery challenges that may significantly affect the way they do business. The new USPS leader recently implemented major operational changes in an effort to trim costs that could further slow the mail. Without radical modifications to the agency’s business model, Postmaster General Louis Dejoy suggests that the organization’s chances of survival will substantially decrease in the coming months. The pandemic is exposing major weaknesses in their financial operations and accelerating the negative trends that have been plaguing the USPS for decades.
How will those adjustments affect your MSP business? If you rely on physical mail delivery to send invoices and receive payments, further delays could severely impact the timelines for getting paid. Those delays may add 2-3 days (or longer) on the front end of the payment process as your clients wait to receive the latest bill or on the other end, while you eagerly anticipate receiving and depositing their checks. Double that timeframe if your company relies solely on the USPS for delivering invoices and payments (no email or automation).
If your MSP is in either camp, now is the time to seriously reconsider your options. These proposed changes could significantly impact those who rely on the USPS for their collections process, from both cash flow and security perspective.
Less money in the bank
The longer it takes for invoices and checks to reach their final destination, the less money MSPs will have on hand to pay current expenses and expand their businesses. You know the story. Using your own cash to fuel growth is always cheaper than borrowing money from others.
Collecting payment for the work your MSP performs can be a tedious and painfully slow process without adding even more delays in the delivery process. Without automation, those activities can involve a lot of manual effort and tediously long waits, and the longer the wait, the greater the chance for mistakes.
All of those steps and delays can severely impact your cash flow. With the USPS slowing the delivery of mail even further, MSPs should reassess their current practices and evaluate options that can improve the speed and security of the collections process.
Higher security risks
Traditional mail and paper checks are fundamentally insecure. While the hard-working people at the USPS do their best to protect letters and packages in their possession, every process has its weak links, and things can get lost or stolen when not in the custody of a responsible party. The longer it takes to transport mail from Point A to Point B, the higher the risk.
And, as mentioned in one of our articles from two years ago, long before anyone outside of the science community heard the term “COVID,” paper checks present a sizable security threat to businesses. Each can contain a lot of personal and account information that, in the wrong hands, can have dangerous implications for your clients. Those details, in the wrong hands, could seriously compromise their privacy and security, including banking numbers that anyone could copy and misuse.
Compromising your clients’ bank information will not take much effort, especially with the latest copier technologies. All an opportunist with bad intentions will need is access to a single check. While mail delays may not seem like a security risk, the longer it takes for payments to reach your office, the more opportunities there will be someone to misplace or take that envelope.
Think about all the ways someone could get their hands on that small piece of paper. The greater the distance and time, the more chances there will be to lose that valuable letter. Even in a best-case scenario, when a client agrees to issue a new check, consider how much time it takes for them to stop payment and then make and send another. Meanwhile, you have bills to pay and less cash available for other things you may need to maintain and grow your business.
There are much safer and faster ways for MSPs to get paid.
Automation boosts cash flow and security
Hoping your clients’ checks are actually in the mail and not delayed or missing somewhere along the way should be a real concern. MSP owners rely on timely payments to pay employees and current expenses and fund the continued expansion of their operations, each vital to the health and longevity of a modern IT services business.
Automation is a viable solution. Rather than relying on the USPS for handling delivery and collections, MSPs are switching to email and digital payment platforms, and integrating those systems with their PSA platforms and accounting packages to speed delivery, minimize risks, and improve cash flow. Let innovation take the wheel and avoid all those old headaches.
Avoid excuses like “the check’s in the mail” or “I never received the invoice.” With email confirmations and reporting, you can easily track payments and outstanding balances, and autopay can help convert your AR nightmares into actual MRR.
Payment automation can ensure your MSP business avoids the problems that will come from the “new mail normal.” No more checks, stamps, or excruciating delays. Ensure you get paid promptly for the vital services your team delivers. Curious how easy to see to set up automatic billing? Check out ConnectBooster, the billing software used by thousands of MSPs who are transforming how they get paid.
