Update on Makin it Rain
Updates in our recommendations for Accounts Receivable Systems
“A lot has changed in a year” is an outrageous understatement. Certainly I need to narrow the focus of the kind of change I’m covering in this newsletter:
Accounts Receivable Systems.
Last May, I walked you through a few of the main criteria to help you select the best different systems for automating how your customer pays you, and in June, I explained the pros and cons of the leading processors, as well as IQBK’s own internal system – which is also what we coach most of our clients to do for themselves.
This July, I’d like to share the research we’ve been doing to find a better AR system for IQBK and our clients, so you can make it rain with as little time, cost and liability as possible.
Housekeeping
No major deadlines in July. However, if you forgot to pay Estimated Tax this year, or missed filling your personal return AND you live in an area of North Carolina affected by Hurricane Helene, the IRS has granted you an extension on all estimated tax payments and your personal tax return until September 25, 2025.
If you’ve filed an extension, remember that it’s better to get ahead of that extension deadline. Your tax pro will be much happier if you submit everything as soon as possible, rather than waiting until the Sept or Oct deadline.
Why we needed and AR Change
There were 2 main reasons we went researching alternatives:
The QB Payments automation was no longer reliable. The sales receipts set up to process on a recurring basis weren’t processing. I would catch the unprocessed payments several weeks later and – while I could still collect my money once I found the error – I find this unprofessional. If you’ve trusted me with your bank account information, I should hold up my end of the deal and pull exactly the amount you agreed to on the day we agreed I would pull it.
If a customer’s payment method failed for any reason, QB Payments flags that payment info and WILL NOT process it again. It sees those numbers and instantly declines it. It’s a “one Non-sufficient funds and you’re out” situation, which became a major problem for us. Some customers only operate out of 1 business bank account, and IQBK does not accept credit cards. I've overdrawn my own bank account a few times out of plain old human error. We needed a platform that is more forgiving.
I spent many hours on the phone with QB Payments support. They are aware of these problems and working on a solution. But I can’t continue recommending this flawed system to clients, nor could I continue double checking the software’s work - that’s literally the opposite result of what automation should provide.
Other Reasons:
Price
The pricing landscape has also changed. *Note: these are prices for payments via ACH bank transfers, as this is the only way we accept payments and how we coach all our clients*
QB Payments
1% that caps at $15 for older accounts. Newer accounts do NOT have a cap, according to this Quickbooks forum, which could turn into an enormous expense.
Stripe
.8% that caps at $5. Age of the account is irrelevant.
PCI Compliance
PCI Compliance = adhering to data security standards for the Payment Card Industry, a.k.a. protecting our clients’ payment data. All businesses should care about protecting their clients’ data, but some businesses have a greater burden based on the type of data they handle, and bookkeeping and accounting firms need to be extra careful.
Our business’s security audit was performed by Security Metrics. They have a self-review survey that you can complete on your own if you’re comfortable, but I found it a little overwhelming. I highly encourage you to pick up the phone and call them for expert support and guidance in completing the audit.
Our business model has 95% of our clients committing to on-going service with a consistent monthly payment drawn from their bank account via an ACH sales receipt. The QB Payments system can automate the recurring sales receipt (although with some issues, as I discuss above).
Let’s frolic though the weeds of accounting terminology for a moment to compare Invoices and Sales receipts.
An Invoice is a request for payment, meaning “I don’t have your payment info yet, please enter it yourself.” A sales receipt means “I already have your money (or payment info) and here is a receipt detailing the transaction.” If your customers have agreed to pay you the same amount every month, then it’s wise to automate this process within your Accounts Receivable software. QB Payments Sales Receipts are compliant with STORING the payment info, but their user agreement requires you to COLLECT that payment info with a signature from your client. This is the potential PCI compliance gap with the recurring sales receipts system using QB Payments .
Because of our business model, we almost never send invoices. Since we are capturing customers’ payment data as well as other sensitive business information, these security needs require us to have a separate ENCRYPTED software to collect sensitive information (including bank information) from the customer and store it securely. A fully encrypted client portal is a necessary expense for any accounting or bookkeeping firm to appropriately handle and store their customers’ sensitive info. Accounting firms can be targeted by hackers precisely because they are sitting on a gold mine of valuable data, so we consider this a non-negotiable investment.
Depending on your business and payments model, you may not need that level of security with your customers’ data for any other reason than payment info. If you’re not collecting and storing sensitive info, an encrypted client portal may be overkill. Instead, you want to make sure the AR system you’re using provides all the PCI compliance you need – and many of them do! But we were looking for an extra layer of functionality, and you probably are too. (Spoiler alert: we found one!)
Our Search
We wanted an option that could:
Let customers securely enter their payment info, and then store it securely
Automate recurring ACH sales receipts and integrate them in QBO
As of the time I’m writing this newsletter, QB Payments lacks this combo of specific functions.
Our Solution
We still have most of our clients processing in QB Payments and Liscio, but we’re beginning the transition process. All new clients (and any clients whose payment methods are flagged for “failing”) are processing through our sexy new invoicing software, Ignition. (This referral link gets you 50% off your first 3 months; as always, I am only recommending it because I actually use it and like it.)
Ignition offers a very attractive and highly professional customer experience from estimate to contract signing, which was a nice upgrade for our system. It also:
Lets customers securely enter their payment info, then stores it securely
Automates recurring ACH sales receipts and integrates them in QBO
Stripe is the back-end processor for Ignition, so we’re also saving a few bucks each time we process that way. However, the Ignition subscription is still an investment (plans start at $40/mo for soloists). It’s worth it for us because our old client on-boarding system felt clunky, time-consuming and maybe a little sloppy.
Don’t Throw the Baby Out with the Bath Water
As I mentioned, we’re still using QB Payments for most of our existing clients with no problems. Eventually, we’ll move everyone over to Ignition but that’s low on the priority list now that the system is fully automated. I say this to let you know that you don’t need to get rid of your existing process if it’s working and it meets your compliance needs.
For example, QB Payments is still PCI compliant and reliable if you solely use it for invoicing. If you send invoices from Quickbooks Online that your customers can click and pay, that system is still reliable, secure and PCI compliant. QB Payments is collecting and storing that info - you can’t even access it - and QB Payments is PCI compliant as long as the customer is the one entering in their payment information. The only drawback here is that your customer has to take action to pay the invoice. For many businesses, this is no problem.
But, if you have a subscription model with recurring monthly payments, I suggest looking at Stripe. They have great customer service, robust functionality and the best prices currently. #notsponsored
And if you’re looking for a sexy, seamless customer experience to go along with your recurring monthly payments, take a look at Ignition. If you use my referral link or mention IQBK, you get 50% off your first three months (and I also receive a small commission), so everyone wins!
IQBK Client Highlight
At Solaris Strategic Wealth, we partner with small business owners to help them create clarity and confidence in their financial lives, both personally and professionally. As an independent, values-driven wealth management firm, our advisors deliver customized financial planning and investment management strategies that support long-term growth, smarter decision-making, and financial confidence. Whether you’re scaling your business, planning for an eventual exit, or simply trying to balance it all, our team is here to guide you through each stage of your financial journey.
Our mission is to empower clients to turn dreams into reality. We work with purpose-driven entrepreneurs, from Charlotte to across the U.S. who value strategic thinking, transparent advice, and a trusted partnership. Our clients share a growth mindset, a strong sense of purpose, and a desire to align their business success with personal fulfillment. As a collaborative firm, compliance and integrity are at the core of everything we do, striving to make every recommendation with your best interest in mind.
Purpose-driven and totally into numbers: we love these people! Doug & Nicole Milone are one of my favorite power couples. Nicole is a classic super-connector, and an established player in Charlotte’s business scene. You are invariably already connected to her by no more than 1 degree of separation. Doug is brilliant running their back office, we look forward to our monthly nerd-out meeting with him.
Learn more on:
Their website
Facebook
Linkedin
Thanks for reading!
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I crack up the entire time I'm reading your newsletters. Love your sense of humor and the graphics. Appreciate all the helpful, thoughtful information as always. Well done once again!