27 Dec What’s A Realistic Time Frame For Getting Your MSP Clients On Autopay?
Like any small business owner, our partners want to set realistic financial targets when they implement new technologies, especially those that affect their bottom line. Proper expectations are a crucial component of any good business plan so, of course, most MSPs want to know how long it will take to perform various tasks, including getting their clients to use autopay.
The simple answer requires a good understanding of their existing customers. New clients are easy ‒they should use autopay from day one. As our partner, Kelly Siegel, CEO of National Technology Management suggests, “from the very beginning salespeople need to tell prospects ‘we are a checkless company.’ Ninety-nine percent of the time they will be fine with that.”
Many of our partners simply add an autopay requirement to their prospects’ proposals and begin discussing payment provisions during the sales process. Relatively few will ever push back if they value your services and understand the safety and convenience automated payments bring to their business.
After explaining the benefits your customers receive when they use the ConnectBooster portal, including the ability to view current and past invoices online and securely store banking information, it’s usually a slam dunk. A little enlightenment goes a long way.
Our MSP partners typically make autopay the cost of entry for new customers. It simplifies the financial discussion and eliminates all the future collections headaches for everyone involved. ConnectBooster provides the platform that makes that so easy.
Earn the right
The more common issue with autopay is the conversion of existing clients. MSPs usually feel more comfortable talking about technology that asking their customers to change old payment habits. The change to autopay is outside the comfort zone for some but, when done right, it eliminates many of those awkward conversations moving forward.
MSPs earn the right to get paid on time. Most providers simply don’t want to rock the boat. They may not want to press autopay the clients who keep their accounts fairly current, those who settle up 30 to 60 days after receiving each invoice, instead focusing on customers who are always in arrears or leave them hanging for months at a time.
Unfortunately, that philosophy leaves many MSPs cash-strapped. Providers work too hard let slow paying customers dictate collections terms. Inflated AR limits their expansion plans or forces them to borrow other peoples’ money ‒ at a significant cost.
Complete autopay adoption must be a top priority. What good is recurring revenue for a thriving MSP if they can’t collect it for 90 days or more?
Adopt a 21st-century payment policy
The time for change is here. One opportunity for MSPs to increase autopay usage for their clients on long-term managed services contracts is to offer financial incentives. Some MSPs offer a discount off their next invoice, such as a 5-10% reduction, or allow them to skip part or all of the next year’s scheduled rate increase.
The cost to the provider is minimal, but avoiding the hassles and reducing the time involved in the collections process is invaluable. A little creativity goes a long way.
“Many of our customers jumped at the opportunity to skip a rate increase by going onto an autopay plan,” stresses Peter Kardel, CEO of Clever Ducks, a San Louis Obispo, CA-based MSP. “They are now paying for their project invoices using ACH because of the convenience, even though there are no cost savings for them.”
Some MSPs implement that standard across the board ‒ with some going as far as firing customers that refuse to use electronic payments. That may seem harsh, but it’s hard to argue with providers who are putting more of their own money where it counts each month ‒ in their companies’ bank accounts.
A reduction in their collection headaches helps offset any revenue losses. Providers are then free to redeploy resources with new and more profitable customers.
That’s what autopay means for MSPs and why it’s so important to demand what they’ve earned. Fewer recurring collection issues, more cash in the bank, and happy customers.