FlexPoint is incredibly easy to work with; they support their product from end to end, and the platform is stable and reliable. It has every payment portal functionality that you need.”
Garrett Snelling
FlexPoint's Working Capital Solutions have been crucial in helping Loud & Clear expand its services to enterprise-level clients. The boost in our number of clients & annual revenue has been staggering.
Patrick Kemp
FlexPoint is incredibly easy to work with; they support their product from end to end, and the platform is stable and reliable. It has every payment portal functionality that you need.”
Garrett Snelling
FlexPoint's Working Capital Solutions have been crucial in helping Loud & Clear expand its services to enterprise-level clients. The boost in our number of clients & annual revenue has been staggering.
Patrick Kemp
FlexPoint is incredibly easy to work with; they support their product from end to end, and the platform is stable and reliable. It has every payment portal functionality that you need.”
Garrett Snelling
FlexPoint's Working Capital Solutions have been crucial in helping Loud & Clear expand its services to enterprise-level clients. The boost in our number of clients & annual revenue has been staggering.
Patrick Kemp
FlexPoint is incredibly easy to work with; they support their product from end to end, and the platform is stable and reliable. It has every payment portal functionality that you need.”
Garrett Snelling
FlexPoint's Working Capital Solutions have been crucial in helping Loud & Clear expand its services to enterprise-level clients. The boost in our number of clients & annual revenue has been staggering.
Patrick Kemp
Efficiently managing invoices and payments is instrumental to the success of any Managed Services Provider (MSP) business. Accurate and timely billing ensures a steady cash flow, enhances client satisfaction, and facilitates business health.
However, many MSPs still rely on manual systems for these critical tasks. These manual systems are error-prone and costly, leading to inefficiencies that hinder MSPs’ operations and profitability.
Automated payment systems provide a reliable alternative for MSPs, allowing them to focus on delivering quality services to their clients.
This article highlights how MSPs can unlock efficiencies by shifting from manual to automated payments. We also discuss automation's numerous benefits and outline the essential factors MSPs should consider when selecting an automated system.
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Automated payment software offers key advantages for you and your MSP clients.
Increased accuracy, time efficiency, reduced costs, and scalability are just a few of the transformative benefits you enjoy when switching.
Your clients also benefit from timely and accurate invoicing, reduced costs, and an excellent customer experience, which leads to trust and better satisfaction.
Converting to an automated payment model helps MSPs enjoy the following:
Manual billing involves several steps that easily lead to errors.
First, you must calculate the costs of services provided.
Then, you need to determine the billable work completed during the period.
After that, you log into PSA or accounting software to create the invoice.
Any errors in these steps, whether miscalculating or missed time entry, can lead to inaccurate billing.
An estimated 60% of late invoice payments are due to incorrect invoicing, making error avoidance crucial to preventing unwanted payment delays and strained relationships.
An automated MSP payment software helps by seamlessly extracting servicing and billing data from Professional Services Automation (PSA) tools, such as Autotask and Connectwise, and invoicing tools, such as Quickbooks or Xero. This bidirectional sync reflects accurate data in invoicing and accounts for all client billable activities.
Automated billing systems handle transaction processing and invoice management much faster than manual methods. Instead of spending hours calculating costs and inputting data, automated systems can perform these tasks in less time.
This ensures prompt billing and frees up valuable time for you to focus on client acquisition, service improvement, and business growth initiatives.
Besides the time efficiency, results have shown that automation fosters better payment results.
A PYMNTS survey, for example, compared businesses that issued 500-1000 invoices monthly. The survey showed that organizations had an average Days Sales Outstanding (DSO) of 32 days.
However, those with high levels of automation had a lower average DSO of 29 days, while those with low levels of automation had a higher average DSO of 44 days. This results in a net savings of 15 days for organizations with high automation.
Take Excellent Networks, a Texas-based MSP, as an example. While utilizing manual systems, Excellent Networks collected most customer payments via check or card, which took, on average, about 25 days to process. Since migrating to automated payment systems, Excellent Networks has reduced this to 5 days, enjoying an 80% reduction in turnaround time.
As MSPs grow, transaction volume, client data, and billing information expand significantly. According to Mordor Intelligence’s projection, the Managed Services market will grow by USD 410.92 billion by 2029. MSPs looking to capitalize on this demand growth must learn to scale effectively.
Automated payment software is instrumental to this scaling thanks to its ability to handle increasing volumes of data. This enables you to focus scaling efforts on areas directly impacting client satisfaction and driving business growth rather than expanding the administrative workforce.
For example, WJP Technology Consultants, a Woodlands - Texas-based MSP, has scaled effectively thanks to automated payment software. Since migrating to an automated payment solution and using Autopay, they have increased their clients' payment speeds by 30% and enjoyed 3X faster payment processing.
Besides the substantial labor cost savings, payment software saves high costs by eliminating hidden processing fees.
Traditional payment processes typically involve third-party merchant services processors that charge high fees for each transaction. For MSPs with high transaction volumes, these fees can add up quickly.
Automated payment software, on the other hand, integrates directly with payment gateways, providing transparent and lower fee structures. This integration bypasses the need for intermediary fees, resulting in substantial cost savings for MSPs and their clients.
For example, IT Vortex, a Paramus, NJ-based MSP, has enjoyed such benefits. In the past, they utilized a manual invoice and payment system, which resulted in high fees and slower processing time.
Upon migrating to an MSP payment software like Flexpoint, however, the firm realized $15,000 monthly savings in invoicing fees and shortened payment cycles of up to 30 days.
In addition, automated payment systems offer convenient payment features, such as recurring billing and automated reminders, ensuring timely and consistent payments.
Research by McKinsey shows that 80% of the value of growth companies comes from unlocking new revenues from existing customers, mainly because they deliver excellent experiences.
In a business climate where 36% of MSPs identify customer acquisition as a top challenge, reinforcing client loyalty cannot be overemphasized.
Manual payment systems cause clients to have poor experiences, as they must track down invoices, verify billed services, and ensure timely payments.
Manual invoicing often takes several days and may cost as much as $15 to $40 each. This makes it evident that MSP clients also bear their 'unfair' share of the stress of manual payments.
Automated payment software solves these problems by sending invoices regularly and issuing timely reminders. The software also serves as a single source of truth for the MSP and the client, eliminating the need for clients to verify each invoice manually.
Also, by incorporating multiple payment channels into their setup, payment software saves clients massive fees, time, and effort.
Manual payment systems are deficient in complying with regulations like the Payment Card Industry Data Security Standard (PCI DSS). They typically lack the necessary controls to secure payment information and prevent the mishandling of documents required by regulators or auditors.
It is also important to note that manual payment processes expose your clients to a heightened risk of fraud, especially those making payments by check.
According to an AFP survey, check fraud was the most prevalent financial scam of 2023, with 65% of businesses surveyed found to have experienced an attack.
This alarming trend underscores the urgent need for MSPs like you to protect clients by transitioning to automated payment software.
Automated payment software offers secure payment portals that safeguard clients' information, reducing the risk of fraud and card information theft. The payment software provides much-needed security by encrypting cardholder data during storage and transmission, significantly boosting compliance efforts.
Additionally, payment automation software creates clear, tamper-proof audit trails. These audit trails document every action taken within the system, identifying who performed each task and when. This level of transparency is essential for compliance audits and ensures that MSPs can provide regulators with accurate and reliable records.
Payment automation systems are software that streamline billing and payment processes for businesses. These tools handle account receivables tasks such as invoice generation, payment processing, and bank account reconciliation, thus significantly reducing the need for manual intervention.
MSP payment automation software is designed to meet MSPs' billing and payment needs. Unlike generic payment solutions, it effectively handles the complexities of managing clients, diverse services, and varying billing cycles.
The software integrates seamlessly with the tools MSPs commonly use, such as PSA, and accounting software, such as Quickbooks and Xero.
The software accurately calculates service costs, tracks billable hours, and generates precise invoices by collecting data from these systems.
Furthermore, it is customizable to bill clients according to specified agreements across various billing structures, including recurring billing, usage-based billing, and one-time charges.
Payment software provides real-time insight into your revenue, outstanding invoices, and payment statuses. In addition, it simplifies payment processing by supporting multiple payment methods, including credit cards, bank transfers, and online payment gateways.
Payment software also facilitates compliance, enhancing adherence to guidelines such as the PCI DSS by providing features such as audit trails, cardholder data encryption, and rules-based access control.
Selecting an automated payment requires evaluating your business needs and comparing the available options in the marketplace.
In assessing these options, you’ve got to ensure that the software ticks the proper checkboxes, such as:
This article highlights how transitioning to MSP automated payment software is a game-changer for MSP by cutting down on errors, lightening billing workloads, and improving client satisfaction.
We also examine various factors to consider when selecting an automated payment software, such as its features, integration capabilities, compliance features, ease of client onboarding, and usability.
The right software supports business growth by providing a product rich in features and integrations.
FlexPoint is a prime example of such a solution that hundreds of MSPs use to automate their billing and payments.
FlexPoint provides features that enable MSP owners to eliminate manual and time consuming tasks related to their account receivables management while freeing them up to do what they do best: providing the proper IT services necessary for their client's business to thrive.
FlexPoint can help MSPs like you bill clients efficiently and collect payments automatically at scale with superior automation, invoice personalization, branded payment portals, and flexible financing options.
Ready to revolutionize your MSP payments? Discover how FlexPoint can elevate your service delivery and payment management. Visit us now or schedule a demo today!
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PCI compliance, encapsulated by the Payment Card Industry Data Security Standard (PCI DSS), stands as a linchpin for any managed services business. It serves as a comprehensive framework devised by the Payment Card Industry Security Standards Council (PCI SSC), aiming to fortify the defenses of businesses against potential data breaches, which can have severe financial ramifications.
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When it comes to payments, MSPs need industry specific software
Trying to better understand what your MSP is required to do for PCI Compliance?
Will FedNow transform the way MSPs get paid? Not just yet. Push and pull payments are key concepts in payments.
Automated payment processing eliminates errors and enables MSPs to handle client billing easily. Automated payment software also significantly enhances MSPs’ security and regulatory compliance efforts by providing a secure avenue for clients to make payments.
Client portals in the payment software also enable clients to reduce payment costs and make faster payments, ultimately increasing MSPs' cash flow.
The transition for an MSP from manual billing to an automated system can vary from a few days to several weeks. The duration depends on factors such as the number of clients you are onboarding, the type of billing arrangements you have with them, and whether there are already existing systems in place to integrate with.
Automated payment solutions integrate with other MSP tools, including PSA systems and accounting software. While the extent of ready-made integrations varies across payment providers, most offer APIs to ensure compatibility with whatever management tools you include in your tech inventory.
MSPs should look for payment software with strong data encryption. This encryption will protect sensitive information while transmitting and storing it. The software should also improve access security through tokenization and passwordless or multi-factor authentication. Moreover, the software provider must be reputable and implement regular updates to ensure robust security.