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Case Study: How alternative business finance provider Liberis used payments automation to reduce operational costs by 35%

January 13, 2020 | Business Financial Management

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Case Study: How alternative business finance provider Liberis used payments automation to reduce operational costs by 35%

To date, award-winning business finance provider, Liberis, has advanced over £390 million in funding to more than 15,000 small and mid-sized businesses, creating nearly 100,000 jobs. It has done this via its ‘Business Cash Advance’ offering.

Through this service, Liberis advances small to medium sized businesses that have been trading for more than four months and that accept card payments from customers, between 100% to 125% of their monthly card takings.

This means businesses can borrow the critical funds they need quickly, and pay the money over time via an agreed percentage taken from customer debit/credit payments.

With this approach, businesses only ever pay when they earn, ensuring cash flow problems are avoided and convenience is prioritised.

Eliminating manual reconciliation to solve challenges with scaling

While Liberis’ Business Cash Advance was popular, originally their business finance service required monthly manual reconciliation, and this was often time consuming and inefficient.

These logistical challenges meant resources were often invested in following up payments and made the service very difficult to scale.

Additionally, customer onboarding took up to 48 hours and this unnecessarily delayed access to cash flow, limiting the value Liberis could offer.

Simplifying business finance using automated payment splitting

To overcome these challenges, Liberis turned to Modulr for a payments solution that could simplify and automate the finance process for its customers.

Using Modulr’s alternative digital banking platform, Liberis adopted an automated payment splitting solution.

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Powered by Modulr’s innovative automated rules engine, Liberis can now segregate inbound payments as they arrive providing each customer their own settlement account. Furthermore, Liberis integrates settlement accounts into the back end of their customers' business card terminals so that payments can be automatically taken at the point of sale.

Modulr's payment platform also allows Liberis to configure automated payment rules for each customer account so that an agreed percentage is sent directly to Liberis, while the business owner receives the rest.

“If we didn’t have that automated splitting capability, then our funding would look very similar to a standard high-street funding option and give very little benefit to the end business. It’s just made that customer journey a lot slicker, smoother and faster, which has allowed us to invest more in customer experience, customer service, and hopefully, continue to grow the business.”
Rob Straathof, CEO at Liberis

This approach eliminated the need for monthly manual reconciliation, simplified the payment process for Liberis’ customers and reduced the time needed to access funds.

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Preventing manual errors and reducing payment processing costs

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Before working with Modulr’s payment platform, Liberis had a highly manual, overnight process for setting up customer accounts, which meant the funding process took a lot longer. But, via its integration with Modulr, a two-day funding process was reduced to just ten minutes and Liberis achieved a 35% reduction in costs for processing payments.

“They’ve provided us with a quick and easy scalable solution for automatic payment processing. The platform is user-friendly, allowing us to give our customers a better, seamless experience and saving the team time manually processing payments.”  
Rosie Baker, Finance & Treasury Manager, Liberis

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Beyond economic and efficiency gains, Liberis was also able to enhance their access and visibility of cash flows, enabled by same day payments, further strengthening scalability opportunities.

By engaging with Modulr’s alternative digital banking platform, Liberis revolutionised their offering with a simple automated solution, delivering major benefits to both the company and their customers.

“Small businesses are the real heroes of the UK economy, yet many still struggle to get much needed financial support from traditional lenders,. “At Liberis, we’re on a mission to fund as many small businesses as we can to help them achieve their ambitions — and Modulr’s payment technology has been integral to this goal. With their API we can seamlessly split payments for our customers, making the Business Cash Advance process even smoother. We’ve had brilliant feedback both from the Liberis team and our customers too.”  
Rob Straathof, CEO at Liberis

With Modulr's industry-leading service-level agreement guarantees, the majority of payments reach customer accounts in 90 seconds. Based on the previous day's card transactions, money is typically in the businesses' account before they wake up the next morning.

Providing the tech behind the tech, Modulr helped Liberis deliver a better quality service that is not only fully scalable, but also operates at a much reduced cost.

“We provide companies like Liberis with access to an automated and flexible payment service, which means they can make and receive payments how and when they want 24/7.”  
Jakub Zmuda, Chief Product Officer, Modulr 

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