Collecting payments on-time is a vital part of any business, especially for small businesses that are cash flow dependent. Keeping a close eye on cash-flow both coming in and going out of a business can be one of the most crucial and demanding tasks for any business – this is especially where resources are limited. Fortunately, technology has given small businesses an easy solution for increasing their customers’ on-time payments: Recurring Billing.
Recurring billing is the process in which transactions are periodically processed from a credit card or checking account by a merchant for goods and services, given the consumer grants permission. You may be familiar with this service from your cable company, cell phone service provider, or from your bank.
There are simple solutions that allow businesses to implement and enable the automatic transfer of funds on a recurring basis (most often monthly). These solutions help to easily set up payment processing schedules in which a secondary method of payment can be selected; if the first payment doesn’t transact properly, the secondary method can be used. This assures your business will receive payments in a timely fashion, and you customers don’t get assessed a late fee or ping to their credit report.
Recurring billing is especially a great solution for businesses that require memberships or contracts. By automating their collection process, a business not only improves cash-flow, but reduces invoicing costs, eliminates late payments and collections calls, and prevents manual data entry—so efforts can be focused on the core business. Plus, by automating the transaction side of interactions with clients, customer loyalty and service will improve because the focus can be on the service provided, not on billing and payments.
The process of setting up recurring billing for your customers’ convenience is simple and hassle-free.
First, during the sign-up process, your customers provide all account or credit card information and electronically or in writing that they are enrolling in the recurring billing program. A quality recurring billing solution will provide you with either the online portal or template forms for this agreement between you and your customer to take place.
Second, you simply enter the customer information and schedule details into the secure, web-based software interface, and click save. Many recurring billing services will also send automatic email receipts or pre-notifications for each payment.
Finally, the system processes the transaction by submitting the payment information to the processor, whether ACH or credit card. The processor carries out the transaction, sending back an approved status to the software program, notifying the debited bank or card to subtract the funds, and notifying your business bank to post the funds to bank account.. In the end, your business will have its money on-time, and the customer will see the transaction reported on their monthly account statement.
As shown by the simple process of setting up and using recurring billing for your business, recurring billing will save you time; improve cash-flow, customer loyalty, and customer service; and avoid late fees, collection calls, and manual entry of data – all while making your business more liquid.
This article is brought to you by PaySimple, a leading provider of Recurring Billing services.
