Your business needs a lot from you, and you welcome any opportunity to put tasks on autopilot.
We have good news for you: recurring payments allow you to collect money from your customers, with little to no elbow grease required.
Intrigued? We thought so. We’re digging into everything you need to know about using recurring payments to streamline your business, stabilize your cash flow, and keep your customers happy.
What is a recurring payment?
Recurring payments happen when a business automatically charges a customer on a set schedule. These automatic payments are typically charged to a customer’s credit card or debit card or are deducted from their bank account through an ACH transfer.
You probably make a few automatic payments each month yourself. Think about your Netflix subscription payments. Or your gym membership. Or your monthly meal subscription box. Those are all examples of recurring billing, as you’re being charged on a set payment schedule on an ongoing basis.
What are the benefits of using recurring billing?
Recurring billing is fairly popular among consumers. In 2017, the average customer paid a little over six bills per month automatically.
Why did they go that route? Well, automatic payments offer several benefits—for both the consumer and the business.
Increased convenience for customers
There’s no shortage of payment options out there, but the recurring payment option is the only one that takes all of the burden off your customers.
You store the customer’s payment information in your payment gateway and automatically charge them on a set billing cycle. Your customer pays for your product or service without lifting a finger or going through a lengthy checkout process.
That added convenience can boost your customer retention rate—and, as a result, your profits.
Reduce late or missed payments
Since automatic payments can happen without the involvement of your customer, you reduce the potential for late or missed payments.
When 46% of consumers admit that they’ve paid a bill late when they opted to make a one-time manual payment, recurring payments eliminate the potential for error and forgetfulness.
Save time and eliminate administrative headaches
As many as 40% of business owners say that bookkeeping is the worst part of running a small business, and nobody enjoys chasing down money from their customers.
When you automate your payment processing, you save yourself time and hassle. You can securely store your customers’ payment details and collect your hard-earned money with little to no manual effort.
Stabilize your cash flow
You know that cash is king in your business, and cash flow issues are cited as the cause of business failure 82% of the time.
When customers don’t pay on time, you need to stay afloat by finding money elsewhere. In fact, 57% of small business owners say they use personal funds to cover cash flow twice a year or more. Recurring payments happen predictably, leading to much more consistent and stable cash flow.
What kinds of businesses use recurring payments?
Many different businesses use recurring payment plans—from e-commerce companies to service providers. Daycare centers, gyms, SaaS products, utility companies, professional services…the list goes on and on.
Recurring billing can be used by a variety of industries and business models, provided you meet two criteria:
- You work with repeat customers.
- You work with your repeat customers on a regular basis.
So, if you own a café and work with a corporate client a few times per year as needed, that’s not a great fit for recurring billing. But, if you cater their same luncheon every month, you could set that up on a recurring payment plan.
Best practices for using automated billing
The very premise of recurring billing is that it’s supposed to be easy. But, that doesn’t mean you can roll it out and watch as the magic happens. There are a few best practices you should know to do this right.
1. Set up reminders for account updates
You’ve probably had it happen before: Your credit card expired, and you were mailed a new one with a shiny, new expiration date. You had to update that payment information in dozens of places, and of course, you forgot one. You received an email saying your online payment couldn’t be processed because of incorrect payment details.
It’s a familiar plight for your customers too, which is why you should use your payment solution to set up alerts when payment information is incorrect or about to expire.
That way, you can notify your customers when they need to update their credit card information—before you even try to process their payment.
2. Offer flexibility with payment schedules
You’re concerned about your business’s cash flow, but remember that your customers worry about managing their income and expenses too.
That’s why it’s helpful to offer different payment plans and frequencies. Particularly if your products or services are more expensive, some customers might not be able to cover a large monthly charge. Breaking that into weekly or biweekly payments might be more manageable.
Be flexible with the payment schedules you make available to your customers, so they can choose the frequency that’s right for them.
3. Make it easy to cancel
While recurring billing should hopefully boost your customer retention, there will come a time when a customer wants to pause or cancel their payments. When that happens, they shouldn’t need to jump through endless hoops.
Unfortunately, 42% of consumers say they’ve found it difficult to turn off recurring charges. If the payment process is easy, the cancellation process should be too.
Whenever you enroll a new customer in automatic billing, provide them with instructions to update their payment information as well as cancel their payment subscription when they need to. Hiding those details will only breed frustration.
4. Maintain a connection with your customers
Your billing and invoicing might be happening on autopilot, but remember that businesses are still built on relationships.
Remember to maintain a personal connection with your customers. Send a regular newsletter or a holiday card. Check in with them periodically to ask for feedback about your product or service.
Do what you can to continue to foster that relationship and fuel brand loyalty. Your payments are low touch, but your business shouldn’t be.
Get your money, without the headaches and hassles
There aren’t many aspects of your business that run without your involvement. But, when you set up recurring payments, you can put your billing on autopilot.
Doing so means less work for you and a more streamlined experience for your customers. How’s that for a win-win?
Related:
This article originally appeared on the QuickBooks Resource Center and was syndicated by MediaFeed.org.
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Crucial, time saving tips for business owners
Owning your own business is a lot of work, and despite your best efforts at adding in that extra hour to the day or the much desired day to the week, the attempts thus far have been futile. While adding more time to your day might not be possible, there are plenty of ways you can increase the efficiency with which you use the time you have.
Here are twelve tips and tricks that can help you capitalize on those 1440 minutes in a day and make your life just a bit easier.
FlamingoImages / istockphoto
The better prepared you are for what’s to come, the more efficient you’ll be at managing the predictable tasks that accompany your time. The more efficiently you are at managing those tasks, the more time you’ll have to deal with the curve balls that come your way.
Some people are great at penciling in and updating tasks in a traditional planner, but that’s not the case for everyone. A project management tool like Asana, Trello, or Basecamp can make life a lot easier by giving you a visual reference and a digital log for that plan you created. You’ll also mitigate the risk of oversights by having a platform that can remind you of upcoming deadlines and meetings.
Payroll, invoicing, and expense tracking are all tasks that can be automated with the right automation tools, platforms, and apps, and many of these tools are affordable if not free (up to a point). If you can use technology to eliminate time-consuming tasks like processing payroll, then it’s in your best interest to do so.
Today, many of the apps we use to simplify our business processes (HR, project management, scheduling, payroll, invoicing) easily integrate with each other. For example, ADP integrates with Quickbooks, meaning data can easily and quickly be transferred. As you select apps and software to use in your business, keep an eye out for integration capabilities — they can lead to some significant time saving opportunities.
In addition to integration capabilities, many of today’s business management apps are also available across multiple devices, meaning you can start something on your desktop, tweak it on your phone, and send it to a colleague or client from your tablet. The freedom to seamlessly pick up where you left off can add substantial time back to your day.
Depending on the size of your inbox, checking email can quickly go from a 5-minute task to a 3-hour expedition that leads you down a complex system of rabbit holes. Instead of checking it every time you get a notification, schedule a block of time to manage your email. When that time is up (unless something is absolutely pressing) move on to your next task.
Many business owners find that they’re constantly on the go, but being on the go doesn’t need to impede upon progress. From business-related tasks to personal life management, many of today’s tasks can be completed right from the palm of your hand. Completing both personal and professional tasks from available apps frees up time in all aspects of your busy day.
Activities like driving or exercising aren’t necessarily representative of the best time to get work done, but that doesn’t mean you can’t make the most of them when appropriate. Brainstorming, planning, or mentally working out a problem are all things you can do on the go. Need to keep track of your thoughts? Use your phone (or a good ol’ fashion tape recorder) to record all those brilliant thoughts you have while commuting to and from work or burning off some calories.
Yes, there are plenty of hours in the day in which you can work or think about work, but making it a top priority every waking minute of the day is a dangerous habit to fall into. Not giving yourself time to decompress or enjoy life will quickly lead to burnout. If you’re foggy, tired, overworked, or significantly stressed due to a lack of downtime, your projects and tasks will suffer, and you’ll end up wasting far more time than you would have if you just took those few hours to clear your head.
Yes, planning is essential to any attempt at saving time, but that doesn’t mean every single minute of the day needs to be actively accounted for. Buffer time allows you to compensate for the unexpected without impeding on the expected.
Life’s like one big trip the grocery store. If you have a list, you won’t forget that important ingredient or essential commodity. Without a list, well, you’ll spend half your day retracing your steps, waiting in line, navigating traffic, and desperately trying to make up for the time you lost and the tasks you forgot.
Big tasks are often complex in nature and have many moving parts. If you know you have a big project coming up, a product rollout or a new marketing campaign, for example, break the task up into more manageable pieces, and don’t be afraid to delegate. Not only will this help you stay on track, but it will make it seem like you’re making progress as opposed to suffocating under the weight of one massive to-do.
It might not always feel like you have the power to free yourself from the shackles of time, but with some careful planning, useful technology, and some good habits, you’ll be able to take back your day. Have a time-saving tip you can’t make it without? Let us know!
This article first appeared on Nav.com and was syndicated by MediaFeed.org.
Featured Image Credit: Doucefleur / istockphoto.
