Quick question: What’s the fastest way to improve cashflow for the majority of a bookkeeper’s clients? Answer: Teach them about mobile payments. Many business owners don’t realise they can take credit cards on their smartphones as soon as the job is done, says John Birse, a regional franchisor for Jim’s Bookkeeping.
Small business owners are really interested in technology that helps them get paid faster, Birse says, citing a recent experience on a bookkeeping stand at a small business expo. Bookkeepers can make a big difference to their clients’ cashflow by introducing them to mobile payments.
“When I talk about GST and credits, (business owners) go cold. When I talk about (payments app) Square the crowd was three deep. They could see it would help them get paid,” Birse says.
The main attraction was Square’s $19 dongle, a tiny rectangle card reader that plugs into the headphone jack of a smartphone. “It becomes a focal point of conversation,” Birse says. “Identifying with them about payment was a really good way of starting a conversation with a business owner. You could show them how it saves you time and money.”
Cashflow is in the headlines in Australia these days. A reported $8 billion is owed to small businesses by mid-size businesses and the Federal Small Business Ombudsman has encouraged the government to legislate faster payment terms.
In response, a group of banks, telcos and other large companies announced a voluntary initiative to pay all suppliers within 30 days.
Supermarket giants Coles and Woolworths have committed to paying their suppliers with 14 days.
Too few businesses realise how mobile credit card payments can completely alter their cashflow for the better, says Birse. This is the opportunity for bookkeepers – to train their clients to ask for payment on the spot.
“When you provide a service you should be getting paid at that stage. But the average person has $20 in their wallet. You really need a method of taking card payments otherwise you’re missing out on being paid.”
Mobile payments devices also work for cash and debit card payments as well as credit cards.
For bookkeepers, “educating small business owners to ask for payment when you provide the service is really important”, Birse says.
And this is the role into which bookkeepers need to expand – becoming facilitators of change. Bookkeepers can help businesses identify new ways of using technology to be productive and do it more effectively than accountants can, argues Birse.
“A lot of people have identified the accountant as the person to do this. But I think that’s a mistake. They have lots of clients and they’re tax focused. They don’t have the immediacy of dealing with the client,” Birse says. “A bookkeeper sits up at night worrying about their client’s business.”
Birse prefers Square over mobile payments methods developed by accounting software companies. Square works with all accounting software packages and the signup process is simpler.
“I’ve used MYOB and Xero. For a lot of them setting up the merchant authority is quite cumbersome. You have to fill out forms and get authority from the bank to use the payment system,” he says. Square has no joining fee, no monthly fee and no contract. The rate for Amex cards is 1.9% compared to 5% on most other platforms, Birse adds.
Square has its shortcomings, Birse says. The accounting software solutions show the client’s details on the smartphone when processing the transaction. Square is working on a way to do this.