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Cashflow is the oxygen that keeps every business alive. Yet, for many founders, the admin involved in keeping that cash flowing into their company is increasingly burdensome. Invoicing, chasing unpaid bills and reconciling payments not only eats up time but can also impact customer relationships. At worst, it even becomes a drag on growth.
Payment management software is designed to automate the process of getting paid so you can focus on growing your business. It connects your invoicing, accounting and banking systems, collects payments automatically and reconciles transactions.
You set the rules once – when to bill, how much to charge, how to handle failed payments – and the system quietly takes care of the rest. The premise is simple: fewer late payments, fewer spreadsheets, more time back to you and your team.
Any business can use payment management software if they want to automate their payment admin, but it’s a game-changer for those that attract recurring revenue. Instead of sending out the same invoice every week, month or quarter, the software does it for you, billing for everything from subscriptions and retainer fees to maintenance contracts – or customers who prefer to pay in instalments.
“My company builds websites but we also host and maintain those websites,” says Marie Brown, founder of British web design agency Beyond The Kitchen Table. “I used to invoice people manually. It was administratively painful. People had to remember to pay you.”
The business is eight years old and Brown began using payment management software in 2020. Now, the majority of her customers pay automatically through Direct Debit. “I’m a big fan of automating as much as you can and making life as easy as you can. Everything runs through my payment system. It ties into my accounting software and it all happens seamlessly. I don’t have to do anything unless the charge is different that month or there’s a payment failure. It saves me so much time.”
Manually sending invoices and waiting for bank transfers is fine when you are small and have just a handful of clients. But, as Brown explains, the balance shifts as you grow: “Before I started using the software, it was taking me two hours a month. I have four times the clients now. We have built more than 100 websites and 80% of my clients are on a maintenance plan. Manually invoicing them all would take me at least half a day each month.”
Brown pays 20 pence (roughly 30 cents) plus 1% on every transaction for her payment automation package. For her, as a creative person who needs time to think, it’s worth every penny. “It frees up time to do paid client work and to think about how we can develop the business,” Brown says. “When you’re thinking about your invoicing, it clutters up your brain.”
That “headspace dividend” is a massively undervalued benefit of automation; the background hum of unfinished tasks distracts from strategic work. Brown reckons that using payment management software has increased her company revenue by around £200 ($270) every month. “It’s not just about gaining time, but freeing up headspace so you can do more,” she says.
Automations can help reduce the potential for error. “I’m only human and I do sometimes make mistakes,” says Brown. “You’re prone to making more mistakes if you’re doing all your own invoicing each month.”
Brown’s payment automation requires customers to pay via Direct Debit and she was initially worried that some people would be put off. “I was a bit paranoid about whether people would pay by Direct Debit,” she says. “But we’ve been around a while and are well established – not some fly-by-night. I make it clear that customers are protected under the Direct Debit Guarantee. Once they know that, they’re happy.”
Payment management platforms usually offer built-in protections, encryption, and compliance with financial regulations. When implemented properly, they can enhance trust, signalling professionalism to your customers. “I don’t see my customers’ financial information at all,” explains Brown. “The software handles it all.”
Payment management software may not be right for everyone. Businesses that process fewer, higher value payments, may be better off handling the invoice admin personally.
Brown’s payment software takes care of the small, recurring website maintenance and hosting payments but she invoices directly for website builds. One of her websites typically costs upwards of £2,000, charged in two instalments. “Paying 1% plus a small fee is fine for a £100 transaction, but less so for £1,000,” Brown says. “It’s the value that makes the difference.”
You also need to consider customer relationships. “If all your customers typically pay on time or early, you may be better off just invoicing yourself,” says Brown. “With payments software, you typically have to wait up to three days for the money to land in your business account.” Any business owner that regularly deals with late payers may prefer the certainty of the Direct Debit. “I hate chasing invoices and clients hate being nudged. Payment software removes all that friction.”
When the Department for Business and Trade and the Office of the Small Business Commissioner asked London Economics to survey UK businesses about late payments, the report found that 28% of firms – or 1.5 million companies – are paid late. Businesses are owed an estimated £26 billion in late payments right now, with each business owed an average of £17,000.
Brown is on the lookout for other technologies that could reduce her admin burden. “But there’s only so much time in the day,” she admits. “If I had more time, I’d look for things that save me time and don’t cost a huge amount. Right now I’m really interested in the AI tools that manage email but I’m not ready to take the plunge.”
Even as a founder working in tech, she sometimes feels “paralysed by the options”. “The world out there is overwhelming,” she says. “So many tools promise to save you time and money, and you don’t know which to go for. You just want to hide under the duvet.”
Right now, she’s focusing on the small wins that could deliver incremental benefits to her business. The first step is getting every client on her payment management software. “I’m thinking of charging an admin fee to any client that won’t use the payments software because of all the lost time it costs me,” she says. “Ultimately, that will save me more time to do revenue-generating things.”
