New payment technology is making a big difference to the productivity of Kiwi businesses, according to Kiwibank.
Last month, research revealed that New Zealand’s businesses are owed $2.5b in unpaid invoices each month, with staff spending 18 million hours a year chasing them.
Mark Stephen, Kiwibank’s Group Manager Business Markets, says businesses using services like Fetch mobile payments are reporting that customers are paying faster.
“The key to breaking that mountain of debt is enabling Kiwi businesses to offer customers news ways of paying.
“A big reason for the lump of unpaid invoices is the long delay encouraged by old-school invoicing practices. If Kiwi businesses offer quicker and easier ways to pay, they can reduce the actual costs involved in invoicing and the worry caused by chasing late payment,” he says.
Kiwibank’s own Fetch suite of payment services allows businesses to offer customers new ways to pay, such as by credit or debit card over a mobile phone, by regular instalment, or via a website.
An advantage is that the services work with most smartphones and tablets, and no additional hardware or clip-on is needed. The system is being used by businesses as diverse as day care centres, bakeries, garden centres and tradespeople.
“Customers are telling us that they love the improved cash flow from quicker payments after selling products or services. The invoicing and reporting system also means they are better informed about who has paid, and when,” Mark says.
Two thirds of small and medium sized businesses in New Zealand have overdue invoices – an average of seven each. Businesses say that the owner or staff member has to contact debtors at least twice to get them to pay - the equivalent of a week each year of someone’s time.
Contact: Nick Gowland, Ph: 021 599 883.
The research was conducted by Perceptive between 14-20 September 2013. Completed online by 411 business owners / decision makers in companies with 19 or fewer staff, and those involved with collecting payment and invoices within a business. Results have a margin of error of 4-5%.