Do you spend half your day billing customers for your services?
Are you sick of not being able to do what you love to grow your business because you have to go asking for the money you are owed?
It’s okay. There is a solution that will help you get back to business: recurring billing
You have probably heard about it, but maybe you didn’t think it was right for your company. Or maybe you just didn’t know all of the benefits it has to offer.
Either way, we have you covered. Read on to learn whether or not an automatic payment solution is what your business and customers need.
What is Recurring Billing?
Recurring billing, or cycle billing, allows a business to bill customers for an on-going service at regular intervals. It doesn’t have to be a monthly billing cycle, but it often is.
Recurring billing can be set up in a myriad of ways, but most services share these common features:
- Automatically generates and sends invoices at specified intervals
- Saves contact and billing information so the details only get entered once
- Makes systematic attempts to collect unpaid funds
What Are the Benefits?
Recurring billing doesn’t just benefit you. It is also a pretty amazing service for your customers too. Let’s take a look at how it helps both of you.
Predictable Cash Flow
Because recurring billing happens on a pre-determined schedule everyone knows when money is coming in or going out and how much is getting exchanged.
Business Perk: One of the most difficult things you have to do as a business owner is to make a budget. The reason being is that you have to work with a lot of variables and unknowns. It is a lot of guesswork.
When you use cycle billing, you can more reliably predict how much money you make each month and therefore build a more realistic budget.
Customer Perk: Your customers also benefit in a similar fashion. A recent CareerBuilder survey revealed that 78% of American employees live paycheck to paycheck.
When you scrimp and scrounge week to week, it is important to know where every penny you earn goes. Having bills on a recurring schedule helps because customers know exactly how and when money has to come out of their bank account.
An Increase in On-Time Payments
Payments are automatic with cycle billing so there are fewer opportunities for late payments. As a rule of thumb, the only time there will be an issue is if there is an expired card on file or if there are insufficient funds.
Business Perk: 30 million U.S. citizens have at least one debt in collections. So chances are that if you have a business, at some point you will have to spend time and money chasing down bad debt.
If the debt goes to a collector, they keep about 25 to 45% of the money they get on your behalf. But this is far less likely to happen with recurring customers on an automatic payment plan.
Customer Perk: Often when a customer doesn’t pay a bill, it is because they forgot about it. They don’t mean to, but life happens and suddenly they are slapped in the face with a late fee.
When your customer has an auto bill pay option, they don’t have to worry about drawing a blank on their payments. The correct amount of money is pulled out of their account on time, every time.
Secure Personal Information
Every year 60% of small businesses get hacked. A lot of these hacks are socially engineered. This means that an employee is tricked into giving someone sensitive data that shouldn’t have it.
It is not intentional, but it happens.
Business Perk: Because of social engineering, each time a different person looks at your customer’s personal information there is a risk for a security breach. But with recurring billing, everything is done automatically so the number of people who see the information is significantly reduced.
In an era where security is paramount and everyone needs to know their information is safe. How your company handles sensitive data is key because if your company experiences a breach that puts customer information at risk, your reputation suffers in a big way.
Customer Perk: Recurring bill pay is also safer from a customer standpoint. They only enter their personal and billing information once and it is on a secure website to prevent hacking.
Additionally, the fewer times a customer has to enter their payment details, the less likely someone else is to see them do it.
Who Uses Recurring Billing?
Think about it. Recurring billing is everywhere.
You can sign up for it to pay for your utilities on time, every time. You can only enjoy Netflix if you have a monthly, recurring subscription. Even apartment communities offer recurring billing.
Everyone loves to set it and forget it. It is one of the perks of living in the modern era.
While recurring billing doesn’t work for everything, if you get creative, most businesses can use recurring billing for one service or another.
Print Services: HP Instant Ink is a service offered by the printing giant that lets customers get a specified number of prints each month.
Car Wash Services: Mister Unlimited Wash Club offers an unlimited number of car washes for a monthly fee.
Monthly Boxes: Online pet stores like Chewy have a recurring billing cycle for pet food, so you never run out of your pooch’s favorite food.
In a nutshell, recurring billing can work for anyone who offers a continuous service at regular intervals for a pre-determined amount of money.
Ready to Move Forward?
Recurring billing is not for everyone, but it can certainly work for most and it has a ton of benefits for both you and your customers.
What is in this article is not by no means an exhaustive list of benefits, but we hope it is enough to get you interested. If you are ready to start using recurring billing, you can sign up here.
If you already have a merchant you use for recurring billing but would like a change, get a free Savings Analysis. This Analysis lets you see how much you can save by switching to Seamless Merchant!