By Ray Birch
FARMINGTON HILLS, Mich.—Community Choice CU has integrated an invoicing and receivables system into its home banking platform to attract more small business accounts and drive deeper relationships with its existing small business members.
In the first month of the offering, available through Autobooks, 47 businesses have begun using the tool that is accessed through the CU’s online banking platform.
Jenny Ludwigsen, AVP of marketing at the $1-billion Community Choice, says Autobooks allows the CU to compete more effectively with banks for commercial business.
“Banks offer really robust commercial business programs and that is a huge attraction for many small businesses,” said Ludwigsen. “But this solution now gives us a leg up in the small business marketplace, and is an important feature we can provide our small business members.”
Ludwigsen said initial response from small business accounts has been good.
“In the first month we offered the solution we enrolled 47 members who used the system for over $100,000 in invoicing, logged in thousands of times, and are referring new business members to us. In fact, we are getting businesses to come over from banks.”
Streamlines Accounting
What is most attractive about Autobooks, said Ludwigsen, is that it streamlines accounting for small business.
“Business owners often use several products to solve individual problems – an expensive and time-consuming process. Community Choice now offers an all-in-one package through Autobooks, which provides critical back-office functionality that is typically only available to large commercial accounts,” Ludwigsen said.
Jay Valanju, responsible for corporate development at Autobooks, said the solution eliminates the need for small businesses to use several platforms to send bills and process payments.
“We often see many small businesses using Excel and Word to manage this process,” said Valanju. “They type up a bill in Excel, and send it out via email. Then they have checks delivered to them manually, and go to the branch to deposit them or take pictures of them with their phone. They do all of this manually, which might be OK if you are dealing with one or two checks a month. But if you receive 20 or 30, this becomes a very inefficient process.”
Consumers, too, want to pay more of their bills via their credit or debit cards, noted Valanju.
“It can be difficult for a small business to accept these types of payments cost effectively,” Valanju said. “You have to go with Square, Intuit or PayPal, who will charge from 2.5%-3% on a payment. That is expensive. Businesses can also set up to accept ACH, but then that is yet another vendor. We said this piece of the business does not make sense—going to two to three vendors to accept payments. They should be able to send an invoice from the same application that enabled them to accept the payment, which Autobooks does.
“What happens is the small business exports a file from PayPal or another system, sends the invoice with Excel or another system, manually has to figure out what payments have hit their account at the credit union, and reconcile all of this manually,” continued Valanju. “This is very complicated.”
Autobooks is one application that allows a business to send an invoice to a customer who can pay in whatever way is most convenient for them and all that flows into one accounting system, explained Valanju. “No manual input.”
Valanju contends that the launch of Autobooks works well with credit unions’ increasing interest in the small business market, along with NCUA’s expanded member business lending rules.
“Credit unions need more and interesting ways to engage their small business base,” noted Valanju, who said a large number of credit unions are in the pipeline to go live with Autobooks in the coming year. “More and more we see credit unions paying closer attention to their small business members who say they want the high touch, high service of credit unions but also want sophisticated business services.”
Saving Members Time And Money
Ludwigsen said Community Choice is charging small business members $4.99 a month for the service for the first year and then $10 monthly afterward. A fee is also charged for each transaction.
“When an invoice is paid we charge 1.99% for credit cards, which is cheaper than competitors,” said Valanju. “For ACH or lockbox transactions, we cap that fee at $5—so 1.99% capped at $5.”
Ludwigsen said that Community Choice always looks for innovative solutions that save members time and money.
“This solution does that for our small business members,” she said. “Across the country credit unions want to be known as being advisors for their members. We think Autobooks helps us do a better job of that with our small business accounts.”