How To Get Paid Faster, Have More Reliable Income, and Be More Efficient By Setting Up Your Clients on ACH
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In this blog, I want to tell you how I make sure my team and I are never wasting our precious time chasing down payments from our clients.
You've probably been there before, checking your monthly outstanding invoices and realizing a client or two STILL hasn't paid their invoice!
And it makes sense why stuff like this happens because we're all so busy running businesses and having lives that sometimes things just fall through the cracks.
But I'm all about efficiency, which means that I'm always looking for ways to do tasks faster, without sacrificing quality. That's where automatons come into play!
I've shared about my love of systems and processes many, many times here in this blog, but it seems like one of the processes that lots of firm owners overlook is how they get paid. Accounts Receivable — it's something we help our clients maintain all day but we often let it fall to the wayside for ourselves.
That's why I've implemented an easy process in my firm than ensures quick, automatic payments month after month.
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Streamlining Your Accounts Receivable Process
As bookkeepers, most of our clients have us on a monthly recurring retainer. You could also work with clients quarterly, annually, or ad hoc (project-based), but those are less common.
For my monthly clients, I was getting frustrated with creating and sending invoices every single month. Then I had to wait for the client to see the invoice, pay it, and wait for the transaction to process.
But if a client forgot to pay on time, I would have to use what little time I had available to send them an awkward email and ask them to pay ASAP.
This process just didn't feel efficient to me, and it didn't seem efficient for my clients either.
One of the ways you as a service provider can deliver a great client experience is by taking even more off of their plate. They already expect you to manage their books, of course, but you can take it the extra mile by automating their monthly payment via ACH.
Should You Set Up Automatic Recurring Payments?
When I started my new firm, I knew I wanted to set up all my clients on a monthly recurring flat fee and implement ACH transfers. Some firm owners like to charge hourly so that they're only billing the client for the amount of time spent inside their books.
But billing a flat fee keeps the income predictable, and doesn't punish you for becoming more efficient. There could be variables in how much time you or your team member spends in maintaining the books each month. If you bill hourly, you might be able to give an approximate guess when the client asks how much to expect on their invoice, but it'll always change. I found that if I just bill a flat fee every single month, the client likes knowing exactly how much they'll pay (and I know how much I'll get paid which is great for budgeting and future planning).
What Is ACH?
ACH (aka Automated Clearing House) is a term that's used to define the electronic transfer of money from one account to another. If you've ever had a W-2 job and got paid via Direct Deposit, that's another form of ACH! In some states and countries, the laws about setting up an ACH are different from others, so just make sure you check your local laws before initiating ACH payments from your client's accounts. No matter where you live, it's SUPER important that you get the client's approval in writing to withdraw the monthly payment from their bank. That way there's no surprises on their end! And if your prices go up or they add on additional services, you'll most likely have to set up a new ACH and cancel the old one.
Heads up: This isn't legal advice, so make sure you do your own research and you're following the laws for your area if you choose to set up ACH!
*Please be mindful that I’m in the US and rules around ACH are different and may vary or not even be allowed in your country… so make sure to do your research for your countries rules!
Choosing the Right Payment Processor for ACH
You have a few options when you go to automate your incoming payments. The most common ones are:
QuickBooks Payments
Stripe
Bill.com
Melio
Square
And there's absolutely nothing wrong with using these, especially if you're already using QBO to manage books and do your own bookkeeping.
In fact, lots of bookkeepers love the QuickBooks Payments integration that lets them take payments directly within their bookkeeping platform.
The problem with any payment processor is that you'll be charged some fees for taking payments.
As of January 2023, QuickBooks Payments is set up with transaction fees like this:
These fees are pretty standard across payment processors, so QBO's still a good option with competitive rates.
I'm a huge fan of efficiency, but I'm ALSO a huge fan of saving money where it makes sense. That's why I started using Plooto for ACH payments!
Plooto lets you set up recurring payments with automations that take care of all the prep work and upcoming payment reminders. They'll even send the client emails when payment methods fail and they need to update their billing method or change their linked account information.
Ultimately, we went with Plooto for our automatic payments because the transaction fees are significantly lower than every other processor we've seen. They do have a monthly fee to have an account, but it's NOTHING compared to what we'd pay in fees from QBO or Stripe.
How To Set Up ACH During Client Onboarding
Since I choose to bill my clients a flat fee every month, this works perfectly for my firm. We onboard our clients using Dubsado, which takes care of the contract and the initial payment. Most of our clients' first invoice will include a clean-up fee to help them get back on track and set up for monthly maintenance. Once everything's complete in Dubsado, we'll set them up as a new client in our Plooto account. Then, we use Content Snare to start gathering all the important info we need from them!
You can read more about our client onboarding process in this post.
Keep in mind that this is just the best way we've found to get paid AND keep it simple for our clients. It doesn't mean that doing it another way is wrong at all! You just have to figure out what makes the most sense for you and how you like to run your firm. Automations are key to making your backend operations more efficient!
Want to give Plooto a try for yourself?
