Telleroo harnesses the data in your accounting software to save you time and de-risk client payments. But if you’re looking to automate payments, chances are you’re also automating data capture, approvals and other essential areas of the finance function.
With this in mind, a key question we get at Telleroo is “What processes should we have in place?”
We sat down with Luke Streeter, COO and co-founder of award-winning accounting firm flinder, to find out how they structure the flow of information within their app stack to ensure payments run as smoothly as possible.
flinder leverages automation through a standardised app stack to provide fast-growing tech clients with an agile finance function. But Luke says the key to making this work is “having a clear and standardised process which everyone can follow”.
Having a clear structure and process allow the team to work efficiently across a large number of clients. Each client may have different needs and bookkeeping schedules (daily, weekly, monthly etc), but Luke says setting the bookkeeping frequency, discussing client needs and agreeing on responsibilities are essential first steps. Also, depending on the size of the client, they may not need an approval step in the process.
Let’s look at flinder’s process more closely:
Inboxes are managed by the flinder team, answering supplier queries, escalating matters to the wider business and ensuring any invoices are forwarded to Dext for processing. Multiple team members have access and a triage and query escalation approach is used.
The team use Dext to process all invoices from client inboxes to Xero, saving time and reducing the risk of errors. For clients on a weekly bookkeeping and payment schedule, invoices are typically processed at the start of the week so they can be paid towards the end of the week.
Where invoice approval is required, ApprovalMax is used. This is typically the case when founders/directors start to relinquish more control of day-to-day matters. It’s not often used for smaller clients where the payment approval acts as the final check and approval step.
Slack is used to communicate with clients throughout various stages in the process, here it’s an important tool as it’s used to send a friendly nudge to clients reminding them of any invoices awaiting approval. It’s often found that ‘missing’ invoices from payment runs are a result of unapproved invoices - so this is an important step for businesses with invoice approval in place.
Now that the invoices and receipts are in Xero, and have passed the approvals process, the flinder team will reconcile the bank accounts to ensure they have the most up-to-date information on what’s been paid and what’s outstanding. There is nothing more embarrassing than proposing an invoice for payment that has already been paid, so don’t forget this step!
The team then prepare payment runs using scheduling functionality in Xero, this shows everything that should be paid if cash were unlimited. The next step is to check the weekly cash position (sometimes an app like Float may be used for short-term cash planning) to see what the client can afford to pay, this allows the team to provide the client with important context.
The flinder team then sends this information over to the client via email or Slack and has an open conversation about what payments should be prioritised, taking into account available cash and supplier relationships.
Luke says, “This will often be us flagging to the client ‘This pay run of everything due comes to £50k and you’ve only got £10k in the bank, so who can we delay payment to?’, there needs to be a way to prioritise”. Luke went on to say “Other times the client will have more than enough cash to cover the pay run but we might advise them to stick to payment terms as it’s better for the business’s cash flow”.
Now that the team have clarity on what needs to be paid, they can set up the payments and send them to the client to approve and fund. Luke likes doing this directly in Telleroo to take advantage of the Xero bank details scanning feature in the platform, which imports the sort code and account number from the invoice into Telleroo, pushing it back to the Xero contact automatically. Luke added, “This is a key feature that I love as it reduces the risk of errors when paying new suppliers”. When the client approves the pay run it’s sent instantly or on the scheduled date.
This is an example of how the process typically looks for clients, with flinder managing the end-to-end process. Luke stresses the importance of staggering the schedule for each client so that payments are spread over the course of a week/month, this helps alleviate the impact of staff responsible for payments if they were to be off sick or other priorities arise. This process may normally take a week but can also be condensed into fewer days if need be.
Once again, it’s important to reiterate Luke’s advice that the most important thing is to have a consistent process that everyone in your team is on board and familiar with. Hopefully this helps you to build out workflows that enable efficiencies within your team, allowing you to introduce a payments service that works well with your existing app stack. And if you're right at the start of your app journey, check out our blog on the best Xero apps for a virtual finance service.
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