Mailing invoices is a common monthly practice for many businesses. Although tedious, the process is inherently rewarding since every bill sent eventually brings in more money — and thus more profits.
If you dig a little deeper, this monthly ritual carries a lot of hidden costs, including:
- Employee hours spent sending and receiving each invoice
- Money spent on materials such as paper, envelopes and stamps
- Maintenance and repairs for printers and other equipment
- Invoices that get lost in the mail and must be re-sent
- Time spent waiting for checks to clear
Don’t forget delinquencies. Every late payment requires that you chase down the customer by phone or email.
What if you could automate the invoicing process and avoid all of these costs. Well, with recurring billing, you can.
What Is Recurring Billing?
If you’ve ever paid for a subscription service, you already understand how recurring billing works. A new invoice appears in your mailbox or inbox (usually as a “formality”), and the money is instantly deducted from your bank account or credit card.
Neither party has to do anything manually to make this process work:
- The invoice is sent like clockwork on a set schedule.
- The money is deducted automatically from the user’s account.
What Are the Benefits of Recurring Billing?
The primary advantage of most recurring billing solutions is cost — or, rather, savings.
- You don’t have to invest as many employee hours to collect payments from customers every billing cycle.
- Because the system is 100 percent automated, there aren’t as many missing or late payments. The money just keeps coming in.
- If you use online recurring billing, you also save on material expenses. This is good for your pocketbook and the environment.
Recurring billing offers another important benefit: improved customer retention.
For a user to stop future payments, he/she must consciously opt out of recurring billing. Think about all the gym memberships that keep generating profits simply because of consumer inertia. The same is true of:
- Magazine subscriptions
- Cable packages
- Mobile telephone contracts
But you don’t have to run a subscription-based service to benefit from recurring billing. Any business can take advantage of this powerful payment option. If you sell big-ticket items, for example, you can set up an installment plan to help make your products more affordable.
Making Recurring Billing Work for You
The advantages of online recurring billing are obvious for the merchant. As this article explains, the user also benefits.
Not all customers, though, are initially comfortable about setting up automatic deductions. Some will have legitimate concerns about security and transparency.
This is why it’s important that your payment environment adheres to PCI-compliant data standards and follows all of the latest security best practices. Reducing fraud is essential for building trust — and making this payment option work for you.
To learn how BluePay can help you set up your recurring billing service the right way, contact our merchant services team today by phone (866-495-0423) or via email.