Let's take a deeper dive into some of the ways Orchid products can supercharge the benefits of Sage 300. In this case: 'getting paid faster'.
Late payments can "squeeze the lifeblood" from an SMB
Last year Sage commissioned and published a research paper called “The Domino Effect: the impact of late payments”. Many of the findings were sobering, but will come as no surprise to anyone who has run their own Small to Medium Business (SMB), or been responsible for collections at one.
- Globally, they estimate 11% of SMB invoices are paid late, with 7.5% eventually written off.
- They extrapolate this to a staggering USD 1 Trillion per year in late payments to SMBs!
- Cashflow is the lifeblood of SMBs, who have limited ability to absorb sharp fluctuations.
- Those who aren’t sent to the wall still need to invest significant resources in chasing payments. It’s the opportunity cost of this effort and expense that the researchers call “the domino effect”.
The research found that the most common impediment to aggressively chasing payment was a fear of damaging client relationships, even though this fear was often unfounded.
It may well be that this reluctance to assertively demand on-time payment contributes to a laziness on the part of payers, and a perception that payment terms don’t need to be taken seriously.
The paper concluded that good first step to changing this culture would be to encourage the automated chasing of invoices. This may seem less hostile to payers, and less confronting to payees.
How Orchid can help you get paid faster
Sage have listed “Getting paid faster” as of one of the 5 core benefits of Sage 300. We discussed this briefly in last month’s “Supercharging Sage 300” article, and suggested some ways that Orchid add-ons can “supercharge” each of those benefits.
With the findings of the Domino Effect article fresh in our minds, let’s take a deeper dive into ways that Orchid add-ons could help you get paid faster.
When we talk of Electronic Funds Transfer there is a tendency to focus on the Accounts Payable side. That’s understandable - the benefits of switching from paper to electronic payments are hard to ignore – but Orchid’s EFT Processing module also supports Accounts Receivable.
- The surest way to get paid faster is to get people out of the way! That’s just what happens when you schedule an automated transfer directly into your bank account on the due date.
- EFT Processing is particularly well suited to regularly recurring AR receipts, e.g. for monthly subscriptions or annual renewals. The small overhead of setting up a direct debit arrangement is easy to justify. You only need to do this once, then both parties to the transaction will reap the benefits of hassle-free future bill payments.
- And of course less human intervention doesn’t just speed things up – it also reduces the opportunities for human error or fraud.
Extender, Orchid’s powerful and flexible tailoring tool, lets you extend the functionality of Sage 300 in countless ways. This could include developing custom scripts to enhance your collections processes, e.g.:
- Generate statements and outstanding invoices, and email them directly to your designated customer contact.
- Check a customer's collection status to see if they are overdue, and if so place any open Sales Orders on hold.
Report Runner & Process Scheduler
Unsurprisingly, Orchid’s two core Automation & Productivity modules also have a role to play:
- Report Runner could, for example, be used to generate AR Aged Trial Balance reports for your customers, and email them to the relevant Account Managers in case a ‘person to person’ follow-up is still required. Default parameters are stored to make re-running simple.
- By adding Process Scheduler you can have control over exactly when collections reports are run and distributed, as well as scheduling the automatic execution of your Extender scripts.
Extender scripts can also be triggered in real time from a Sage 300 screen, and the results displayed in an Orchid Notes window. (We call this an "Extended Note".) E.g.:
- Trigger a script from the Order Entry screen to calculate and display a summary of the active customer's collections status, together with the most recent collections communications.
- If the customer has outstanding invoices, prompt the salesperson to have a collections conversation before allowing a new Sales Order to be submitted.