Get Paid On Time… Every Time!

Collecting receivables… Getting paid on time for services rendered… It’s a challenge to just about any service business that extends payment terms to their customers. And for us as providers of IT Support to the SMB market, our customers generally expect monthly invoices.

Now, even if you run a very tight ship, and are responsible enough to consistently mail all of your invoices out on the first of the month, it doesn’t mean in any way that your clients will be putting a check in the mail to you on the 2nd.

As a small business owner yourself, you’re going to have financial responsibilities of your own that you’ll be required to meet on a regular basis. Regardless of how hard you work to make sure that your receivables are sufficient for meeting your expenses, it won’t do you any good if your invoice for that hard work winds up sitting in your client’s “to do” box, for weeks or even months.

Fortunately, there’s a very simple solution for making sure that you receive payment for your services ON THE VERY SAME DAY YOU GENERATE YOUR INVOICE.

 

A Factoring Company can purchase your receivables from you.

Once a month, or more frequently if you wish, you can email or fax a copy of each of your invoices directly to your factoring company. On the same day, the factoring company will deposit up to 85% or more of the total amount of your invoices directly into your bank account.

Then, once your client delivers payment to your factoring company, you will receive the remaining 15% of your invoice, minus the fee charged by the factoring company. The fees will vary depending on when payment was received. Fees can range from around 1.2% for payments received within 30 days to 1.6% or more for invoices left outstanding for longer than 90 days.

I believe these fees are well justified, for the simple fact that I will know at the start of each month, EXACTLY how much money I’ll be receiving and EXACTLY on what date!

It’s also great not having to deal with making collection calls.

If a client is slow in paying an invoice, the factoring company acts on your behalf as your outsourced “receivables department”. They will make the initial collection attempts, and they will typically do it in a very professional and effective manner.

If an invoice ultimately goes unpaid, it becomes the responsibility of the computer consultant to repurchase the invoice from the factoring company and find a resolution with the client independently.

Another great benefit of factoring receivables is the ability to generate additional income outside of the regular, monthly billing cycle.

For my small business clients, my primary service is a Proactive Maintenance Plan, for which I charge a flat, monthly fee. For this fee, I provide round-the-clock network monitoring and remote computer support. These receivables are generally invoiced for and collected on or around the first of each month.

But very often, I’ll make recommendations for new projects that won’t fall under the scope of the regular, monthly maintenance plan.

For example, installing a new firewall.

This project would be billed in addition to the regular, flat monthly fee. If installation of the firewall is completed to the client’s satisfaction on the 15th of the month, an invoice for the project can be created on the 15th, submitted to the factoring company, and be funded to my bank account all on the same day.

Having consistent and reliable cash-flow is critical to the survival and growth of any business. Especially to a young MSP who’s yet to build a significant capital reserve to cover the unexpected (or even regular) expenses. Factoring receivables can provide the financial stability necessary for running a healthy business.

 admin who understood his business needs, his user’s needs, his technology needs… and who worked on a part-time salary.

The small IT Support Provider who maintains a modest client base with round-the-clock monitoring, instant alerts and rapid response through remote support can fit the bill for this dream scenario perfectly. We can provide the same or better high-level monitoring and support as an in-house tech, along with a level of personalized attention and dedication that a Mega-MSP would find near impossible to match – at a fraction of the cost of an in-house network administrator.

They want to pay as little as possible: If you’re using the right tools, it can cost next-to-nothing to provide small business customers a high-level of IT Support that’s right up there with any MSP out there today. Lower operating costs for you allows you to offer very competitive rates to your clients.

And any savvy small business owner who relies on his computer systems will gladly pay a fair and competitive rate for a provider he trusts is keeping his systems operating at maximum reliability and performance levels.

Thanks to today’s affordable technology… my clients are more satisfied, my operating costs are lower, I run at higher efficiency and at higher profit margins than ever before. The future’s not looking too bleak from where I’m standing.

But what about the naysayers who still claim that “it’s just too tough to sell Managed Services in this economy”?

Sales in any service industry, at any time can be tough, especially if you don’t have a strong and proven marketing strategy behind you.

But I believe sales prospects for the IT Support industry are very, very encouraging. Think about it for a moment. EVERY small business that relies on computer systems (which is just about EVERY small business), NEEDS a reliable and affordable way to maintain and support their systems. The service we can provide as a small IT Support Provider represents the perfect combination of reliability and affordability these businesses are searching for. And the majority of our perspective customers are still operating on a break/fix mentality, while becoming ever more aware that support from an MSP is probably the direction they should be thinking about moving towards.

They just need us to introduce our service offering to them in the right way and help ease them into the reliable, efficient support model of the future.

A future that for me as a small MSP just keeps looking brighter!

Best,

-Robert

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