Review: Promptly, an Early Payment Discount Addon!
Promptly is Debtor management AddOn in the Xero ecosystem. It goes about chasing money from a different and unique perspective. Its primary focus on getting businesses to pay on time or early is to incentivise your customers with early payment discounts. Prompt goes about doing this in a very simple manner.
How easy is it to use and setup?
Prompt has a very simple setup which includes initially integrating the AddOn with Xero. Promptly then takes you through a straight forward 4 stage process:
- Where you set up the discount amount you want to use
- Nominate which ledger account you want to allocate the discounts to when they are raised
- Setup your branding them in Xero and direct it to promptly
- Upload your logo for reminder emails you send
Once the compulsory setup stage is complete you have an option to setup payment services to get paid directly, utilising PayPal, Eway or DPS Express.
Upon completion of the above, Promptly simply runs in the background and everything is automated. When a customer pays on or before the due date, Promptly automatically generates a credit note and attaches it to the invoice. This makes it much easier when it comes to your bank reconciliations and also saves you an enormous amount of time if you have a large volume of invoices each month.
You can also set an auto-reminder to remind customers a couple of days prior that by paying they are eligible for an early payment discount.
What does the interface look like?
The interface is to the point, highlighting average days to get paid, how many customers you have, invoices outstanding, and the discounts being offered.
Other than the above mentioned initial setup process, Promptly goes about doing what it has to in the background, checking on an hourly basis for payments being made inside Xero and then being matched up to invoices within promptly.
Promptly also only lists contacts/customers that have had at least one discount invoice recorded against them.
So does it really work in the real world?
Promptly’s dashboard focuses on the important measurable metrics to prove the system works. The idea is really great and the time saved in automating the process of issuing and marrying up the credit note to the original invoice in itself is worth the monthly fee of $19.
Buyer Decision Making
In making sure discounts are for you, it is worth asking yourself the following:
- Can you afford to offer discounts?
- Is it the normal practise in your industry?
- Are your competitors offering discounts?
- Do customers expect a discount or not?
- What happens when a customer doesn’t pay on time, and also takes up the credit (double whammy)?
Remember a 1% monthly discount amounts to 12% interest a year.
John Mariotti President of the Enterprise Group suggest the following key points as reasons vendors would be willing to offer a discount to encourage early payment:
- Companies want their money. It sounds simplistic — but isn’t. Getting paid early is important in business.
- They want their money ahead of other people. The buyer may not have enough money to go around.
- The longer it takes, the greater the risk that something happens and you don’t ever get your money. The earlier you get paid, the less risk.
- It helps you from the perspective of working capital. The more money you have in hand, the less need to find working capital from other sources.
- It lowers your costs of borrowing and can even substitute for loans. The more money you get in hand, the less you have to borrow. This is important in times when it’s hard to borrow money or interest rates are high.
If you have decided as a business, offering early payments discounts is a strategy you wish to pursue.
Promptly is the AddOn for you, it does this with ease and works seamlessly to automate the entire process, saving you invaluable time, and ensuring that user errors are minimised and that you get to focus on other critical business processes.