What has the payments industry learnt during Covid-19 and what does it mean for accountants, asks Pooja Pankhania.
Many businesses across the UK have had no choice but to adapt to the challenges presented by Covid-19. Payments-based business London & Zurich helps clients from multiple sectors manage their payments, including accountants and accountancy firms. We have observed that the pandemic has led to differing outcomes across different sectors. Some businesses, particularly within the sporting, fitness, leisure and hospitality space, have seen a sizeable drop in customer transactions as most of these businesses require a physical space to operate. Other sectors such as telecommunications and technology have not seen the same reduction in customer transactions from Direct Debit and other types of payments. This could be because these sectors were better equipped for remote working before the pandemic emerged as they may have already had secured networks and increased business support.
Downturn in accounting sector
London & Zurich’s analysis of direct debit collections during the month of April revealed a 5% downturn in the accounting sector compared with January 2020. There could be many reasons for this decrease, but one thing that is certain is that the accountants or firms that have multiple payment platforms in place are able to collect payments from their customers with greater flexibility than those firms who don’t. Regular payment collection is not only key for businesses to keep generating revenue, but essential to help maintain a healthy cash flow, too.
In addition to this, London & Zurich have also seen a large increase in enquiries from accountants looking for a more flexible card payment solution. While staff are working remotely, having access to the traditional ‘chip and pin’ machine has been challenging, coupled with more end customers wanting to pay on credit cards. An online payment portal enables businesses to take payments via any web browser, whether that’s a one-off payment, pay-by-link or recurring card payments. The ‘pay-by-link’ feature is incredibly useful, as this enables accountants to email their customers asking for payment with a ‘click here to pay’ button.
One important observation that the coronavirus has taught the world is that to preserve cash reserves requires a broader payments approach, especially when it comes to maintaining cash flow. Accountancy firms can achieve this by adopting a digital or contactless-based payment platform that allows them to continue collecting payments from their customers at any time. With some lockdown restrictions still in place and consumers opting for contact-free payment methods, payment providers like London & Zurich can offer payment security, functionality, and important reporting features.
One of the challenges that accountants may face is how to encourage their clients into opting to pay via alternative methods. The important consideration here is to reassure customers about safety especially since businesses are discouraged to take payments face-to-face due to Covid-19.
Even before the pandemic it has always been important to have access to a support team that is accessible to clients when they need it. London & Zurich’s robust support service has been critical during this pandemic especially to its large accountancy client base. Accountants need to be able to carry out their line of work in normal fashion via audits, completing VAT returns, reviewing annual accounts or even completing any ad-hoc work without having to worry about whether they will be paid on time. Covid-19 has allowed some respite for businesses to settle and receive payments at a later stage if needed, however, if payments do not get settled within the extended time frame this can affect internal cash-flow. Without reliable cash-flow, businesses can struggle to operate effectively which is why the need to have a variety of payment options is crucial to prevent this.
Improve cash flow
Direct debits can help improve cash-flow and accountants can expect to see a significant reduction in time and administrative costs that are normally associated with payments via cash and/or cheque. Late payments are detrimental to any business, which is why it makes sense to invest in a payment platform that improves control and reliability of cash receipts.
To conclude, it is clear that the pandemic has required businesses to rethink their strategies when it comes to payments in uncertain times. From London & Zurich’s perspective, one of the fundamental ways businesses can help with this is to remain flexible when it comes to managing customer payments. To ensure business growth and better cash-flow management, especially during this period, it makes sense to start thinking about the best payment strategies.
For more information on London & Zurich’s payment systems and related content visit www.londonandzurich.co.uk.
• Pooja Pankhania is a Digital Marketing Assistant at London & Zurich