Subscriptions and recurring payments have become very popular in the past few years. Many businesses driven by technology allow their customers to subscribe to a wide range of digital products and services. Most of these businesses use some type of SaaS tool for billing, subscription management, and accounting.
So, if your business provides some kind of subscription service, you should make sure that you have the right payment method set up. Recurring payments are an excellent way of increasing efficiency and minimizing errors. Stay with us, and we’ll explain why recurring payments are a good idea.
Recurring payments are crucial for the survivor of all Small businesses. VatPay's payment reminders will help you get paid faster for your recurring payments.
Sign Up Now
Free Invoice Generator
Why Consider Recurring Payments?
Suppose your business relies on invoicing and other accounting practices to collect your income. In that case, recurring payments can help you speed up the billing process and create a more stable and better IT project management. Such a system offers a few important benefits you should definitely consider if you want to create a more stable payment system and take the load off your accountants. Here are some of the benefits you can expect to get:
- Minimize the Work
- Minimize Late Payments
- Building Stronger Relationships With Customers
- Cut Costs and Save The Environment
- Secure Payment Information
Minimize the Work
An automatic recurring billing payment method is set up the first time a client makes a payment. All future payments are then handled automatically, and all you have to do is to change the type or amount of payment. With predetermined billing dates, you won’t have to do anything other than watch the money pour into your account.
Minimize Late Payments
Late payments are a serious problem for cash flow and can quickly lead to other complications. Moreover, if you charge a fee for late payments, your customers won’t be too happy about that. With recurring online billing, your payments will arrive on time, and you won’t have to worry about cash flow ever again.
Building Stronger Relationships With Customers
Recurring payments make things simpler for both sides, which can help you improve overall customer relationships. Customers often prefer automatic payments as they don’t require any attention, and there is no need for paperwork.
Cut Costs and Save The Environment
Subscription billing can also save you a lot of cash in the long run. A typical bill costs 40 to 50 cents, and when you include transport and production costs, as well as the energy needed to produce all that paper, recurring billing is a much better option.
Secure Payment Information
Almost all recurring billing software provides state-of-the-art encryption that allows safe customer information management. Without the use of paper leads, you will have better control over customer information circulation and their use.
Things You Need To Set Up Recurring Payments
Generally speaking, setting up recurring online billing payments isn’t that hard at all, and you can do everything in a matter of minutes. You first have to consider the type of payments you’ll include, and you need your website’s HTML code to get started. We’ll go over the process when setting up a system for PayPal since it’s one of the most popular payment methods. Here’s a quick overview of the process:
- Create a PayPal Business account;
- Find the Manage Subscriptions page and select Create Plan;
- Fill in all of the details about the product or service you’re offering;
- Select the kind of plant you offer;
- Create a plan name and provide a short description;
- Set up other pricing details;
- Choose a billing cycle for the plan you’ve created;
- Confirm your information, and you can start receiving subscription billing through PayPal;
You can expand your options further by including invoice payments, and you can set up a dedicated link you can share directly to clients for easier billing.
What are Payment Gateways and why They Matter
Payment gateways are designed to make sure that the entire online billing system runs smoothly for both customers and businesses. It’s an automatic technology that collects all payment details, sends them to the acquirer, and then sends a receipt to the customer. It also ensures that all customer payment details are secure and that the seller gets paid on time. All sensitive information is encrypted, providing a secure platform for everyone included.
Payment gateways like VatPay Payments act as a middleman between the business and the customer, and its primary role is to provide a secure transaction on time. It’s crucial because it increases overall security features and protects companies from frauds and chargebacks. It also protects businesses from late payments, insufficient funds, expired cards, exceeding credit limits, and so on.
Different Payment Methods
Most subscription billing models allow setting up recurring payments using a few different methods. Here’s a quick rundown of the available options.
Most recurring payments involve the use of a credit card, as this method provides the most possibilities. Most payment cards today allow recurring payments, making it easy for businesses to bill customers regularly. You don’t have to provide any documents, and all fees are charged in real-time.
Recurring payments also allow billing directly from customer’s bank accounts. Customers have to authorize upcoming charges upfront, according to the regional requirements. Some areas require the customer to make permissions in the bank, while others don’t. The expenses are not collected in real-time.
Alternative Payment Methods
Alternative payment methods include platforms such as PayPal, Stripe, and Square. We already covered what you need to do to set up recurring payments on PayPal, but the other options above work almost the same. Once you set up recurring payments on these platforms, you have to give up some control when it comes to invoicing, but you’ll get more payment options in return.
Most of the time, you won’t need any additional permissions to collect payments directly from client’s accounts, allowing you to transfer funds in real-time.
Finding a Recurring Billing Software
You can find hundreds of different recurring billing software available online, but not all of them will give you the same features. The basic software only simplifies billing, but more advanced options provide features designed to simplify accounting and help you manage all of your finances at the same time. These software solutions are known as all-in-one platforms that cover everything from billing, invoice payments, and bookkeeping. If you are an IT Service Provider, here are some of the features you should look for:
- Managed service billing in multiple languages and currencies.
- IT project management tools for easy time tracking.
- IT expense management that allows you to manage all expenses.
- Detailed financial reports that take the load off your accountants.
- A dedicated client portal for building strong customer relationships.
- The ability to upload, track, and record receipts.
- The ability to assign specific roles to employees for better time management and cost reduction.
Subscription billing and recurring payments solutions are simply a much more effective way of billing your customers in regular time intervals. You won’t have to worry about cash flow ever again, as all bills will be paid on time, taking the human element out of the equation. Even if your customers forget to pay you, the software will ensure that you get paid on time.
It’s an excellent addition to any online business, especially for SaaS billing, and it takes a load off your accountants. The bottom line is that recurring billing software can provide you with a more stable and safer platform that makes sure your business will run smoothly and without errors.