Thursday, August 15, 2013

How To Simplify Your Recurring Billing

So you have heard about subscription billing, but think it's only for large enterprise level businesses. Did you know that you can apply subscription billing to your SMME to improve your cash-flow and give your clients a truly easy way to pay? Before we look at how recurring billing will benefit your business, let me walk you through a simple definition of what subscription billing really is:

Ask yourself, what is subscription billing? Subscription billing is used by businesses to charge clients a specified amount more than once. The amount can differ, but is usually the same on every recurrence and the term on which the charge is submitted can recur on any frequency e.g. weekly, monthly, annually etc. Charges can be submitted to your credit card, bank account or account with a payment gateway.

So now that we have established what it is, let's find out how subscription billing can benefit your business:

Enable better cash-flow

Businesses and freelancers stand to benefit a lot from adopting recurring billing procedures. Recurring billing is not just for big or enterprise type businesses. Any business can easily and very cost effectively initiate this strategy.

Debiting payment via subscription billing means increased cash-flow for businesses. When billing only via wire transfer or direct deposit only you are haphazardly receiving small, unscheduled payments that each incur bank changes to you and your customer. These once off payments can be sporadic so you are never sure when or even if your clients will pay you.

If you are always unsure of when you will get your payment from your customer you can never plan ahead. This is where recurring billing saves the day. Now you know when you will be paid and can even work out a forecasted payment amount based on past success rates. This healthy cash-flow and ability to plan in advance really does mean that your business can expand quickly.

Get your money on time

Customers who neglect to pay their invoices on time can seriously affect your business. Waiting for late payment is very unproductive. Subscription billing eliminates the need to wait for late payment and because it happens automatically means the client does not need to remember to physically pay you each month. It's a great way to collect hassle-free timely payments.

Slash administration costs

It does what it says on the box; subscription billing allows you to save money and your customer to save time. Customers no longer need to trek to banks to make deposits or need to remember to login to Internet banking in order to make a manual wire transfer. That is all automated with recurring billing. You as business owner also save time on reconciliation of accounts and save money as you do not need to employ so many staff in your accounts department.

Wow, that sounds great! But how do I get started? Signing up for a payment gateway and payment facilitating system is step one. Find a gateway with competitive fees and a facilitator that allows automatic account reconciliation.