A new company is set to radically reduce the time it takes businesses to get their invoices settled by clients.
Technology firm Peasy is offering businesses the chance to dramatically improve their cash flow as we emerge from the pandemic, by launching a system that offers rewards, typically between 1 and 5 per cent of the invoice values they’re paying, depending on how early they settle.
Offering incentives to clients is a proven method of getting invoices paid quickly, and far more effective than cash. Peasy manages the entire process as soon as the invoice is raised, and requires no further administration.
In trials with the National Association of Shopfitters (NAS), payments received within terms were 40 per cent above the national average.
Cash flow is a huge concern for businesses. Even before the pandemic, 24 per cent of UK businesses report late payments as a threat to survival. Today, more than two thirds (68 per cent), of UK entrepreneurs cite cashflow concerns. Reducing late payments improves cashflow, allowing businesses to invest in growth, create more jobs, rely less on government support and – generally – improve the economy. It also saves time and the costs associated with having to chase debtors and allows businesses to focus on what really matters – rebuilding their business.
Now Peasy empowers businesses to incentivise customers to pay earlier. The quicker they pay, the bigger the reward – and the greater their loyalty. Peasy’s system can also strengthen relationships between businesses and their clients as both sides benefit when invoices are settled early.
Peasy has partnered with Avios to offer rewards for travel, although businesses can elect to donate the value to Peasy’s partner charities, including: NHS Charities, Cancer Research UK and Trees for Cities. Just like business credit card points, anyone authorised within the organisation can draw down rewards, share them or spread them as they prefer. Companies issuing the invoices can also earn points.
Peasy connects to all major accounting software, is quick and simple to link, and just requires the invoicing business to decide the overall level of rewards (as a percentage of invoice value). As each invoice is raised, Peasy then presents the customer with a dynamically reducing incentive according to how quickly the invoice is paid. The entire process is seamless and automated.
Peasy is free to use and requires no long-term commitment. The only cost is the value of rewards when a customer pays early, so if it doesn’t achieve the improved cashflow, there are absolutely no costs.
David Landsberg, co-founder and managing director, comments: “We’re excited to be launching Peasy – a first-of-its-kind. The platform is designed to give businesses an edge and level the playing field so businesses with access to funds are incentivised to prioritise paying those without.
“Conducting the trial with NAS early this year not only demonstrated how compelling offering early payment incentives should be, but also how forward thinking as an industry body they are. Late payments is an issue that has long blighted industry trade bodies across many sectors.
“We believe that as businesses return to a sense of normality following lockdown, they can leave behind their old collection practices and focus on improving their cashflow and strengthening the economy without having the distraction of chasing debtors. It really is time for businesses to draw a line in the sand and take control of their cashflow for greater certainty ahead.”