Synaxon UK

Buying experts see the value of London & Zurich’s Direct Debit solution.

Synaxon UK, the United Kingdom’s leading channel services dealer group, has enjoyed the benefits of secure Direct Debit collection facilities from London & Zurich since 2012.

The group, part of a German plc, is a subscription model business which focuses upon supporting resellers of IT and office products to purchase more efficiently and increase sales and cut costs. Its network of members and distributor and vendor partners has the opportunity to benefit from cross-selling and pooling and sharing of expertise and resources, while accessing Synaxon UK’s offering of tools and services developed to enhance trading and growth and protect margins.

Derek Jones, Synaxon UK Managing Director, says: “Our subscription model meant that we were perfectly attuned to collecting payments via Direct Debit. We were therefore taken aback when we approached the bank to organise a Direct Debit service and were turned down. The bank claimed that we were not appropriate as our business was too small for their consideration.

“The bank’s attitude was bizarre, frustrating and insulting – we had in excess of 600 subscribers and were 75% owned by a thriving German plc. Examination of our subscriber base would have made it clear to the bank that most of them are Managed Service Providers and so it could have cascaded the DD offering to them too.”

“Synaxon UK might be compared to the Federation of Small Businesses,” continues Derek. “Resellers of office products and IT may apply to become part of the Synaxon community and, if they meet the criteria, they join and we trade. Payments from community members were originally collected via Standing Order and this had the potential to be something of an administrative and financial headache given that there were over 600 members.

“We understood that our members would want to focus on purchasing products and services at advantageous rates and growing their businesses rather than devoting time to making and chasing payments. London & Zurich understood this intuitively and provided a solution that ensures that we and our members are freed from the shackles of daily credit control and can be confident about cash flow.”

London & Zurich’s Direct Debit package offers clients such as Synaxon UK a secure, cost-effective and quick means of payment collection and processing, allowing for predictable, managed cash flow. “The service is multi-tiered in that Synaxon UK collects payments from members via the DD system and the members in turn collect the fees from their clients via the system too,” explains Kevin Morgan, London & Zurich’s Managing Director.

Benefits of London & Zurich’s secure Direct Debit collections systems are obvious. Members can predict and manage their cash flow which supports their businesses. In addition, they neither need to devote time and money to making phone calls to chase payments – which can erode customer relationship and retention – nor are they tied up with administration and paperwork. Synaxon UK is able to collect the members’ fees with little or no effort which frees the management team up to focus on providing outstanding benefits and features to its network and expanding its marketshare.

There is an additional level in the relationship, in that Synaxon UK and members can participate in the London & Zurich referral scheme. Should any of these parties identify an organisation that could successfully deploy the London & Zurich Direct Debit system they receive a commission and thus boost their revenue.

“Not all the members took up the opportunity of the London & Zurich Direct Debit offering on day one, but it is increasingly adopted and new members are expected to sign up for it,” adds Derek.

“The Synaxon UK projected community target is 1500 members, equating to 10% of the IT channel market. Effective management of the needs and aspirations of members demands robust systems and processes, never mind ensuring timely collection of payments.”

IT and office product resellers who qualify to join the Synaxon UK community enjoy the benefits of being part of a large, established network that is, itself, backed by a German plc.

A41 IT Services is a member of the Synaxon UK network. “We have been part of Synaxon UK’s community for five years and benefit from being able to go online via its Egis platform and search for goods and hardware and purchase at very favourable price points that Synaxon has negotiated with its supplier partners,” says Harry Bech, Sales Director of A41 IT Services.

“A41 IT Services had initially sought a Direct Debit facility from our bank, but was refused on the grounds that, in the bank’s view, the firm did not have a sufficiently long trading history. We felt that the bank was only geared for big businesses and not SMEs like us.”

A41 IT Services has 60 regular customer companies that have entered into on-going contracts. Harry comments: “Approximately one-third of these customers pay us via London & Zurich’s DD platform and this makes our lives so much more straightforward as the hours we might have wasted chasing payments are now used much more productively. I expect that more of our established customers will transition to Direct Debit while the balance continue paying via Bacs. We require any new customers, however, to adopt the Direct Debit solution and seriously question why any organisation may refuse.

“A41 IT Services is now in its sixth year of trading and it can demonstrate sound, predictable cash flow, a position that can only improve as more customers take on the London & Zurich proposition, which is invaluable.”