Pre-Authorized Checking
As a business owner how many times have you heard, “The check’s in the mail.”
Even with the best intentions, some customers will have difficulty making payments to a business on time. Whether it is because customers cannot afford a large payment, they simply forget to make it, or any other number of excuses the bottom line is this: when a business does not get paid on time it can cause major problems. Poor cash flow is cited as the number one reason why new businesses fail. At this point a business owner has two choices, they can continue to spend a small fortune using traditional methods attempting to collect what their customers owe them, or they can switch over to one of the fastest growing methods for receiving payments today. It is called Pre-Authorized Checking™ (PAC) and now any business owner can start using it immediately to increase their company’s bottom line.
Are these excuses familiar?
- “Your invoice must have gotten lost mail.”
- “Did you send me a bill this month?”
- “Can’t you draft this from my checking account?”
- “Sorry, I forgot to mail my payment.”
- “Let me look at my checkbook, and I will call you right back!”
- “I thought it was due the 15th!”
- “I’ve been out of town for a couple of weeks.”
The reasons for untimely payments could go on and on. The number of customers paying in 30, 60, and 90 days past the due date is increasing. By using PAC, a business can reduce their receivables and help eliminate many of the collection problems before they even occur. PAC also improves customer retention by allowing your customers the option to be on an automated payment system. Studies have shown that consumers who utilize an auto pay system stay with that business in excess of 90% of the time. Business owners using PAC have also found that it helps them attract new customers by using it as an in-house payment or financing plan. This allows their customers to purchase products or services they might not otherwise be able to afford. The best news is that in most cases there are no monthly minimums, no monthly fees, and no on-going cost to the business owner. There is only a small processing fee for drafting each check. This fee can either be included in the customer payment or can be paid by the business at the owner’s choice.
Here Is How It Works:
PAC ensures that your payments are received on time each month, every month. A customer simply completes the release form to sign up for the program. This form is then forwarded along with other completed forms to Platinum Cash Flow Solutions. Our processing center prints the pre-authorized checks for the agreed upon amounts and delivers them to the business on the scheduled date(s). Owners simply take the pre-authorized checks to their banks and deposit them like any normal check. Depending on the volume of accounts, Platinum Cash Flow Solutions can even deposit the checks for a business.
With PAC there is no computer access into a customer’s checking account like a traditional ACH. Their check is simply re-created on the agreed-upon day each month for deposit into the business owner’s bank account. Their pre-authorized check is noted on their monthly bank statement like any other check. This non-threatening approach makes signing up customers on PAC very easy. Since you will be in control of the checks being deposited, there is no chance for the bank to make a mistake on your customer’s account. This flexibility allows you to even hold a check for a few days if necessary for your customer without any problems or fees.
There is no cost for software, hardware, phone lines, or any of the typical expenses required for electronic fund transfers by the bank.
Considering convenience, cost efficiency and excellent service, PAC is rapidly becoming one of the nation’s leading methods of automatic payment processing. Major retail, utility, mortgage companies, and insurance companies have utilized this system for over 20 years! Now Platinum Cash Flow Solutions can make it available to any business regardless of its size.
10 Reasons to Use Pre-Authorized Checking
10. Increase Customer Retention!
Industry statistics support the claim that clients on an auto-pay type system remain faithful customers in excess of 90% of the time.
9. In-house collection
Pre-Authorized Checking (PAC) can be the perfect answer to the “age-old” excuse -“The check’s in the mail.” All you need to process a preauthorized check is written consent and their checking account information. This system will turn every call into a collection call.
8. Reduce billing and invoicing costs
Each and every draft produced by PAC will save your company money. How? The average business spends $4.17 per customer per month to bill their customers. By reducing invoicing, mailing, bookkeeping and all the other associated billing expenses.
7. Convert NSF checks into new drafts
If you receive any NSF checks, you can contact the customer and with their consent reissue the payment to your company. You can even obtain customer consent to include the bad check fee in the new draft.
6. Mail order, COD and telephone sales
With our system you can close those telephone sales immediately by drafting the customer’s checking account. Much like a credit card order, you get the sale now, but without the payment delays, rejects and merchant card fees.
5. Installment plans and recurring billings
Our “silent payment” concept helps prevent account delinquency. You get paid when the installment is due, not a week later! Customers will appreciate the convenience of automatic payments – no more forgetting, ignoring, or worrying about past due accounts or service interruptions.
4. The ultimate fund-raising tool
Members and donors can simply charge their checking accounts, instead of having to remember to mail a promised donation. This helps to eliminate the “fallout factor” of fund-raising. Great for non-profit partner donors, church building programs and telethons of all types.
3. Improve your Customer Service
Many customers will appreciate the convenience of PAC account payments. No more late fees, lapsed memberships or interrupted service. Our mission statement at ABS is Uncommon Customer Service. It can be your goal also.
2. It’s a win-win situation
The PAC solution benefits both you and your customer. You cannot afford the opportunity cost of forgone business growth, or the possibility that your clients who desire the convenience of auto-pay would find another provider who offers this service.
1. Increase and accelerate your Cash Flow
The PAC solution puts you in control. You decide when you get paid. PAC checks can be produced for immediate sales and implemented effortlessly on all recurring invoicing services or products.
Bottom line: We can dramatically improve the cash flow operations of your business!
Calculate Additional Revenue
See Your Savings Using Our Exclusive Pre-Authorized Checking
Instructions: Fill out the fields listed under “Your Numbers Now”. Make sure to use only whole numbers. Do not worry if your figures are not exact, this worksheet is merely intended to give one a general idea of the potential revenue you can earn using the PAC. Make sure to visit the Pre-Authorized Checking page to learn more about this exciting service.
To request a detailed analysis of your business and see what it is really costing to process your claims contact us today!
| Pre-Authorized Checking | Average Business Without PAC | Average Business Using PAC | Enter Your Numbers Now |
|---|---|---|---|
| Number of Outstanding Accounts Annually | 100 | 100 | |
| Average Outstanding Balance | $250 | $250 | |
| Total Amount of Money Left Outstanding Annually | $25,000 | $25,000 | |
| Percentage of Outstanding Money Never Collected | 40% | 2% | |
| Annual Lost Revenue from Non-Collected Accounts | $10,000 | $500 | |
| Additional Revenue Collected Annually on Outstanding Accounts Due To PAC | $9,500 | ||
| Number of Customers Rejected Annually that Cannot Pay Who Would Have Qualified Using PAC | 52 | N/A | |
| Average Amount of Money Billed to Each New Patient | $400 | $400 | |
| Annual Revenue Lost Due to Rejected Customers Because of Credit Risk | $20,800 | N/A | |
| Additional Revenue From Credit Risk Customers Annually using PAC | $20,800 | ||
| Total Combined Income From PAC Annually (Revenue Collected + Credit Risk Revenue) | $30,300 | ||
FAQ
1. What kinds of companies will Pre-Authorized Checking work for?
The answer is simple, if a business takes payments PAC will work for them. Whether it is automating their recurring monthly payments, helping to collect slow pay accounts, or offering an in-house payment plan to potential customers PAC is the unique low cost tool that any business can use to increase profits.
2. Can this program work for me if the amount billed to the customer is different each month?
Our PAC system works well in situations in which the amount owed by customers varies from month to month. The only difference in the program is that the business sends out a monthly statement to their customers detailing the amounts to be billed.
3. How do you collect from me?
We use the same technology to collect from businesses using PAC that they use to collect from their customers. Platinum Cash Flow Solutions simply creates a bank draft from the business’ account for the amount of the combined service fees for a given month.
Here is an example to make this absolutely clear.
Say that a business has 50 customers on the Pre-Authorized Checking service. The monthly invoice to each of these customers is $50 each to keep the math easy. 50 customers at $50 each would be a grand total of $2,500 collected each month using PAC. The agreed upon service fee for each of these drafts was $2.00, again keeping the math easy. This would mean that the service fees would total 50 customers times $2, or $100 each month. In this scenario, Platinum Cash Flow Solutions would hand the business a stack of 50 checks that totaled $2,500 each month. The next day, we would produce a draft, pre-authorized by the business, for the amount of the service fees totaling $100. The business’ net would be $2,400 each month.
4. How is my customer informed that the check has been submitted and cleared their account?
A customer’s check is noted in their monthly bank statement. The check will be numbered as “000” or will not be numbered at all. This prevents a conflict with their checkbook numbering system. The on-line bank account statement will refer to this transaction as a “Pre-authorized Check.” The customer can then balance their checkbook as usual.
5. What is the agreement between you, me, and my customers?
Platinum Cash Flow Solutions prints pre-authorized checks on behalf of your customers. Any contractual or cancellation clauses in the agreement will be settled upon prior to initiating your service. We will go over typical arrangements and make suggestions on a course of action depending on the individual needs of each business.
6. Do you have access to my customer’s or my bank account?
Our system does not have the ability to electronically access any bank account information. It is a proprietary software that was developed to store information and print checks only.