Accounting is rarely seen as a fertile ground for digital transformation and payments is perhaps one of the most overlooked areas. Finance departments keep track of incomings and outgoings, and probably use the same payment processes that have been in place for decades. But finance leaders are in a unique position to reduce costs and increase revenue by evolving payment processes.

Company strategy may differ across industries and organizations, but there are common payment challenges that can be solved with Pull-ACH – a proven payment method that can be implemented with minimal disruption to day-to-day operations.

The Power of Pull-ACH

Despite digital transformation delivering significant gains across core business functions, payment technology in the United States has been greatly underutilized. This has created a landscape in which businesses are still spending way too much to get paid, and waiting far too long to receive the money they are owed.

Using existing, reliable payment infrastructure, Pull-ACH allows businesses to take control of how and when they get paid by pulling payments directly from a customer’s account on the date it is due. By changing to Pull-ACH, you can remove the challenges associated with cards, cash, and checks.

These “push payment” methods rely on the customer to determine the correct amount and make the payment at the right time. This means they are prone to human error–from simply forgetting to pay on time, to sending the wrong amount or failing to include the right details (which leads to more problems when it comes to reconciling your payments). And cards come with their own unique challenges in the form of high fees and failed payments, particularly when it comes to card-on-file.

Future-proofing With Payment Automation

Beyond saving money and getting paid faster, payments can also complement your wider growth strategy. If you operate a subscription model for example, or receive regular, recurring payments from your customers, your growth roadmap might be hindered by legacy payment processes

The admin burden – an increase in customers means more accounts receivable admin. Add to this the challenges around failed payments and reconciliation and the added administrative burden on accounting teams continues to grow.

High fees – for a business that collects one thousand $200 credit card payments per month, the associated card fees [at 3% per transaction] amount to $72,000 per annum. With Pull-ACH by GoCardless, transaction fees start at 0.5%, resulting in a $60,000 saving.

Failed payments – payments fail for a multitude of reasons, such as insufficient funds, a payer’s bank blocking a payment due to a perceived risk, or the card expiring. When it comes to recurring card payments, the risk of failure increases, as the payer is removed from the process and is not authorizing each transaction.

Let’s put this into perspective. For recurring transactions, a business will typically see around 10% of card payments fail. Of these failures,11%-15% will result in customer churn and bad debt.

Here’s what this looks like for a business processing $5million-worth of card payments a year:


If that business used Pull-ACH to process those payments it would significantly reduce its potential losses:


A Matter of Time

When a business relies on its customers to make manual payments via cash, wire transfers, and checks, it will generally wait 20-25 days to receive the money. With Pull-ACH, a business will receive payments within three to five days—and with GoCardless’s Faster ACH, this is reduced to as little as two days. 

It’s an important factor to consider when it comes to Day Sales Outstanding (DSO). If a typical invoice is for $200 and the DSO is 20, a business processing 1,000 payments per month will have around $130,000 stuck in receivables at any point throughout the year. This money would be better invested in the business, which is why faster payments should be a key driver of payment transformation. Pull-ACH reduces DSO to three, taking the $130k in the above example to around $20k. That’s $110k the business can now use to grow.

A Growth-Ready Payments Offering

Apply all of these challenges to a business undergoing rapid growth—potentially even expanding into new territories—and the complexity of managing payment processes increases once more.

This is where partnering with payment service providers (PSPs), like GoCardless, can ensure a seamless customer experience across regions. It’s a crucial point, as many banks in the U.S. do not offer international ACH payments, whereas GoCardless delivers this capability while also ensuring local exchange rates from more than 30 countries are applied.

Finance leaders are in a great position to deliver these benefits. By introducing something as simple as Pull-ACH, costs will be reduced and cash flow and growth will increase. All it takes is the will to really understand what your payment pains are and how these affect your business. By harnessing our extensive capabilities and innovation on top of the ACH Network and global payment ecosystems, you can reduce your pain points and accelerate the delivery of a payment offering that is fit for today and ready for tomorrow.

To learn more visit GoCardless.com.


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