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Thursday, April 11, 2013

Recurring billing made easy

By Susan Bapsnill


Most SMME owners have heard the term "subscription billing", but few make use of it or understand what advantages it can hold for their business. Let's start off with getting an exact idea of what recurring billing is and then move on to investigating how implementing it in your business can raise your cash-flow and save you money.

Subscription billing is when you give a merchant or service provider permission to charge your bank account or credit card at regular intervals for the purchase of goods or services. The recurrence can be for any period e.g. weekly, fortnightly, monthly, or annually. The subscription amount charged is usually the same on each recurrence, but can differ. For example a weekly fee of $10.00 for your subscription to an online service.

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

Keep the cash rolling in

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 implement this strategy.

Debiting payment via recurring billing means improved cash-flow for businesses. When billing only via wire transfer or direct deposit only you are haphazardly getting 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 customers will pay you.

Constantly having to worry about when you will receive payment from your customers means you never have a chance to plan ahead. Subscription billing provides you the ability to project income over many months. As payments are recurring and repeat on a scheduled basis you know exactly what date you will be receiving what amount. Excellent for planning your businesses budget and scheduling your own debits.

Get paid on time

Recurring billing means timely payment. Customers can't forget to pay because now payment collection is automated. You don't have to wait around anymore for late payment or have to deal with clients claiming they forgot about making payment. You get your money when you need it - hassle-free. Clients still have the freedom however to select their own debit dates according to invoice due date, so everyone's happy.

Spend less on payment collection and administration

It does what it says on the box; recurring billing allows you to save money and your clients to save time. Customers no longer require to go to banks to make deposits or need to remember to login to online banking in order to make a manual wire transfer. That is all automated with subscription 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.

Sounds brilliant! Sign me up! Find the best resources for subscription billing systems online or ask other business owners for referrals. We suggest signing up with a gateway that automates recurring billing and a payment facilitator that allows automatic account reconciliations.




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