Session 5 - 07 Payment Schedules & Remittance Advice
Summary
TLDRThe transcript discusses the process of creating efficient payment schedules for clients, emphasizing the importance of consolidating bills and processing them in a batch to streamline payments. It highlights the need for clients to have a clear understanding of the payment schedule type and the importance of checking bank balances before authorizing payments to avoid issues. The speaker also stresses the value of proactive management in business operations to prevent problems and improve client relations.
Takeaways
- 📋 The primary goal of preparing payment schedules is to efficiently transfer information and streamline the payment process for clients.
- 🔑 Efficiency is achieved by consolidating all bills to a single email address, processing them, and presenting them in batches to avoid clients forgetting or misplacing individual bills.
- 🗂️ There are multiple types of payment schedules, akin to a menu, which cater to different client needs and legacy systems.
- 📬 Clients are informed of the type of payment schedule method they should use, ensuring they are aware of the process for their specific case.
- 💼 Small business owners often lack sophisticated purchase order systems, so batch processing of bills is crucial for their operations.
- 🔒 The accounts team has user-only access to bank accounts, allowing them to upload payments but not to make them, ensuring security and oversight.
- 📝 A remittance advice is sent to suppliers to match payments with invoices, preventing miscommunication and ensuring both parties have the same record of transactions.
- 🕵️♂️ Before sending a remittance advice, it's important to verify that the payment has actually left the bank account to avoid supplier confusion and additional work.
- 🚫 Ensuring there are sufficient funds before authorizing payments is crucial to prevent failed transactions and the need for follow-up actions.
- 🔔 Proactively managing payment schedules and bank balances can prevent issues like late payments and overdrafts, demonstrating diligence and value to clients.
- 🛠️ Operating proactively rather than reactively can significantly reduce the stress and workload associated with managing payment schedules and client expectations.
Q & A
Why is efficiency important when preparing payment schedules for clients?
-Efficiency in preparing payment schedules is crucial as it ensures the most effective transfer of information, streamlines the billing process, and facilitates quicker payments, which is particularly beneficial for small business owners who may not have sophisticated purchase order systems in place.
What is the purpose of directing all bills to the accounts email?
-Directing all bills to the accounts email allows for centralized processing, which helps in avoiding omissions and ensures all bills are accounted for, thus improving the efficiency of the payment schedule preparation.
How many different types of payment schedules are mentioned in the script?
-The script mentions there are about four or five different types of payment schedules, likened to a McDonald's menu, indicating a variety of methods to cater to different client needs.
Why is it necessary to batch payments together instead of entering them individually into the bank?
-Batching payments together reduces the workload and time spent on processing each payment individually. It allows for a single file upload into the bank, simplifying the process and minimizing the chance for errors.
What is the significance of having user-only access to the banks in the context of payment schedules?
-User-only access to banks means that while the account handlers can upload payments and check statements and balances, they cannot make payments or withdraw money. This ensures security and that payments are only made with the client's authorization.
Why is it important to check that the money has left the bank before sending a remittance advice?
-Checking that the money has left the bank before sending a remittance advice ensures that the payment has been successfully made and received by the supplier. This step avoids miscommunication and additional work in case the payment fails or is delayed.
What is a remittance advice, and why is it sent to suppliers?
-A remittance advice is a document sent to suppliers that informs them exactly what has been paid. It helps suppliers match the payment to their system and close the correct invoices, preventing discrepancies and miscommunication about unpaid invoices.
What is the additional step taken to ensure funds are available for automatic payments like payroll tax?
-An additional step is to set a reminder to check the bank account balance one day before the automatic payment is due. This proactive measure helps prevent overdrafts or failed payments due to insufficient funds.
Why is it recommended to inform clients in advance about their bank balance when preparing a payment schedule?
-Informing clients in advance about their bank balance when preparing a payment schedule allows them to make informed decisions about approving payments. It helps avoid situations where payments are approved but cannot be processed due to insufficient funds, thus preventing delays and additional work.
What does operating in a proactive state mean for a business, as mentioned in the script?
-Operating in a proactive state means that a business anticipates and addresses potential issues before they become problems. This approach involves organizing systems to prevent issues, learning from mistakes, and continuously improving processes to minimize the need for reactive measures.
What is the benefit of sending a reminder to a client about an upcoming direct debit when the bank balance is low?
-Sending a reminder about an upcoming direct debit when the bank balance is low helps the client take timely action to ensure sufficient funds are available, thus preventing failed payments and the associated negative impacts, such as late fees or loss of client trust.
Outlines
📊 Efficient Payment Scheduling for Clients
This paragraph discusses the rationale behind the preparation of payment schedules for clients, emphasizing efficiency in information transfer. The process involves consolidating all bills to an account email, processing them, and presenting them in batches to avoid individual handling by clients, which is not efficient. The speaker mentions different types of payment schedules, likened to a McDonald's menu, and the need to adapt to the client's preferred method. The aim is to streamline the approval and payment process, reducing the workload for small business owners who may not have sophisticated purchase order systems. The paragraph also explains the importance of checking that payments have been made before sending remittance advices to suppliers to prevent miscommunication and additional work.
🔄 Proactive Payment Management and Client Communication
The second paragraph delves into the importance of proactive payment management to avoid issues such as insufficient funds in the bank account when payments are approved. The speaker shares an example of a payroll tax situation where they set reminders to ensure sufficient funds are available before automatic debits. The proactive approach is contrasted with a reactive state, where businesses are constantly fixing problems instead of preventing them. The speaker highlights the benefits of operating proactively, such as smoother work processes and increased client value. The paragraph concludes with the speaker's appreciation for the technological systems in place that facilitate a proactive work environment and the importance of individual diligence in maintaining this approach.
📄 Post-Payment Client and Supplier Communication
In the final paragraph, the focus shifts to the communication process after bills have been paid. It is confirmed that remittance advices should be sent to suppliers to inform them of the exact payments made, allowing them to match the payments to their systems and avoid miscommunication. The paragraph is concise and directly addresses the action to be taken post-payment, ensuring that suppliers are kept informed and that the payment process is closed out correctly.
Mindmap
Keywords
💡Payment Schedules
💡Efficient Transfer of Information
💡Accounts Email
💡Batch Processing
💡User Access
💡Remittance Advice
💡Bank Balance
💡Direct Debit
💡Proactive State
💡Diligence
💡Supplier
Highlights
Efficient transfer of information is key in preparing payment schedules for clients.
All bills should come to the accounts email for processing to avoid client forgetfulness.
There are about four or five different types of payment schedules, similar to a McDonald's menu.
Legacy systems may require handling payment schedules in multiple ways.
Processing all bills in one batch and presenting them to the client for approval streamlines the payment process.
Batch payments by combining them into one file to simplify bank transactions.
Client has user-only access to the bank, meaning they can upload payments but not make them.
Business owners sign off on payments before they are made to ensure funds are available.
Remittance advice is sent to suppliers to match payments with invoices and avoid miscommunication.
Checking bank accounts before sending remittance advice ensures payment has been made and received.
Avoiding supplier confusion and chasing payments by ensuring funds have cleared is crucial.
Insufficient funds can cause payment schedules to fail, highlighting the importance of checking bank balances.
Proactive approach in payment scheduling prevents problems and reduces reactive firefighting.
Individual diligence is necessary to maintain the proactive state of the business.
Technology solutions and systems are in place to support a proactive business operation.
The importance of notifying clients in advance about low bank balances to prevent payment failures.
Creating reminders for automatic payments to ensure sufficient funds are available.
The value of proactive communication in building trust and reducing client workload.
Sending remittance advices after bills have been paid is a standard practice to keep records straight.
Transcripts
next one is
why do we prepare payment schedules for
our clients
the way that we do payment schedules
we're looking for what is the most
efficient transfer of information right
that's what we're looking for how can we
prepare the bills that are required how
can we present them and how can we get
them paid in the most efficient way
possible
so we look at it and we say okay if the
client is getting every bill and the
client is then passing it on to us
um they may forget things you know it's
not efficient so what we do is
generally we'll request that all bills
come to the accounts email
um we will process all of them and then
we prepare
this about there's about four or five
different types of payment schedules
uh it's a bit like a mcdonald's menu
right but when you get a client
um it'll tell you whether it's payment
schedule one two
three four five whatever method it is um
unfortunately we have a legacy from
early on where we have some clients
with different methods and we have tried
to become more efficient
so there'll be you'll be doing payment
schedules in in probably about four or
five different ways
so you just you'll need to know um you
know for each
client what type of way it is so the
idea is that
we're processing all the bills we're
then we're presenting the bills in one
batch
um in an email to the client so they
don't have to go through each one
individually
because because they're smaller business
a lot of them are smaller business
owners they don't have
as i told you before purchase order
systems and
all of that in place so then they go
through they approve it they say pay
these pay these or maybe don't pay that
yet
you then batch those payments that they
said by batching we're combining them
all together into one file so we don't
have to individually enter them in the
bank
we upload them into the bank we let the
client know sometimes it's text
sometimes it's email
payment is uploaded in the bank it's
ready for you to go in and sign it
so we have user only access to the banks
that means we can't make payments we
can't withdraw money but what we can do
is upload the payments we can use
statements
um balances all of that then once the
business owner has uh signed it
then we go in and we check
you know has the money left the bank
then we send the remittance advice
i want to ask now if does anybody
remember
why we go into the bank and check it
before we send the remittance advice i'm
really curious to see if anybody
remembered
or if you didn't remember think through
the process and
maybe what i'll do is i'll let you know
what a remittance advice is again a
remittance advice
is um it's a document or a piece of
paper that goes to the supplier letting
them know
exactly what we paid so that they can
match
our payment to their system because keep
in mind
every invoice we have in our system that
we've processed they've got in theirs as
well
so we want them to allocate the payment
to the same
invoices as what we did and close the
same invoices that we did
otherwise we can have miscommunication
later if they close the money to
different invoices
then we could be saying um they could be
coming and saying
uh this hasn't been paid but we'd be
saying yes we paid it
and then that creates extra work so
once we let the client know it's ready
for signing they go in they authorize it
why do we wait why do we go in and check
that
actually the money's left the bank
before we send the remittance advice
yeah okay good question
so we make sure that uh the payment is
actually been made
or also the the supplier have actually
received that money if the money has
left from our bank then we can be sure
that it uh
landed that they received the that
amount
if the money for example didn't left the
bank we know that there has been some
problem and that
the payment hasn't actually been made
yet maybe there are some delays or
whatever so
just to make sure that the money has
left
our account and that means that it
landed on theirs
okay so you're halfway there the other
reason is
imagine now you're a supplier and you
receive a remittance advice
and you're looking at it and you're
thinking i got paid
and you look in the bank and actually
you didn't get paid
because the business owner didn't sign
it
so what are you gonna do you're gonna
ring up or you're gonna email accounts
hang on i didn't get my money
it just creates extra work that's the
what you're saying is right
and then it's just that extra bit it's
the bit to avoid all the suppliers
chasing you
um because the person they think they
got paid because they got the remittance
advice but
some business owners um can be slack and
all busy
and they can miss they can miss the um
signing and then it doesn't go for
another day or two
and for those few days you're going to
keep getting people emailing you
asking you you know why did you send me
the remittance advice you didn't get
paid
whatever there also would be the
situation where there's no enough
money in the bank account before
uh owner approves your payment something
else which is for example on direct
debit went through
so there's no enough money he approved
but so there's another
reason why you have to check in the bank
that reminds me that's a really good
point um
you know one of the things that's really
important is that you're really switched
on if you're doing your payment schedule
and this has happened you know quite a
few times where a person does a payment
schedule
they send it they upload 50 000
but there's only 20 in the bank account
so the whole payment fails
and if you can imagine there's a timing
thing like sometimes bills have to get
paid because
to continue work whatever it is so
that's why it's really important that
you're linking the fact that i'm making
payments i'm gonna need to make sure
that what i'm paying that there's enough
money
and that you're telling the client in
advance okay if you want to pay
50 000 but even looking when you send
the payment schedule
okay um there's about fifty thousand
dollars worth of bills that need to be
paid
i'm just letting you know that currently
the bank balance is twenty thousand
you know maybe you need to do a top up
you know are you able to do a top up
or would you you know at least let them
know so then maybe they'll only approve
15 000 worth of bills rather than
you know them approving the whole lot so
just being connected to
the whole the impact of everything as
you're doing the payment schedule
um and again i want to
share example uh for example we are
for one client we're paying payroll tax
each month
and because of the quality situation
they allow us to pay installments
so smaller amount in uh more more
frequently
and they said okay this uh amount will
be direct debited from your account
each tenth of the month and that's okay
you
basically don't have to do anything
money will
automatically be
taken out from your account what i did
is i create requested the boomerang and
reminder for myself
to check uh one day before is there
enough funds
on the bank account because it is
automatically i know
if there is no enough money on the bank
account
we if we are late with the payment we
will have to pay interest
so that's an additional step no one
asked me to do it
client doesn't want to like think about
it but
uh they're like they have a lot of
suppliers and their payment schedules
are really big
there is situation where they pay
payment schedule and there's no
uh money on their bank account so just
just example off and it's it's those
little things
um that can you imagine that you're
you're a businessman and somebody emails
you the day before
saying look i just noticed that the
balance is low and the direct debits
coming tomorrow
can you imagine how much you value that
that's that
the thing is yes there's a little bit of
work there but if it
fails then there's a lot more work on
the other side as well so it's in
everybody's interest it's in your
interest plus
you're actually you're valued even more
by the client but you you're making your
life
smoother and easier and the work that
you're doing um you know a lot a lot
more
simple you know as a company um one of
the things that i really love is
because of all of the technology
solutions systems that we've put in
place
we actually um do operate in a very
proactive state
so do you guys know what proactive is
can i get a hands up
okay um i believe most businesses or a
lot of businesses they operate in a
reactive state
what that means is all most of the time
that they're
fixing one problem after another they're
putting out a fire that's how they're
operating all the time
um because they don't have the time to
get themselves organized and preempt the
problems
and as i said before fortify the systems
fix it before
it's going to happen um when you can do
that
and and you leverage every mistake so
that you slowly
eradicate a lot of the problems that are
happening um
then suddenly you don't have to have all
these dramas all the time you don't
always have to be
saying sorry um
right so that's the reason why we
operate like this that's why we're
saying all of this
it is pleasant it is so much more
pleasant for yourself
to work that way and we've come a long
way with our systems to
promote that but it also takes each
person's individual diligence
what should you send after bills have
been paid
okay this is an easy one who's got it
alexandra
the remittance survives excellent
excellent great
Ver Más Videos Relacionados
How an Agent Should Show a Buyer a House
Payments and outstanding accounts | Odoo Accounting
The Perfect 0% Tax Structure for Online Businesses
3 money blocks that stop you from earning what you deserve! (Upgrade your money mindset).
How to get an Amazon payment report
Digital Payments, Digital Payments System | Types of Digital Payments | How Digital Payments Works
5.0 / 5 (0 votes)