How to Setup Automatic Payments for your Business

How to Setup Automatic Payments for Your Business

If you want a seamless and more convenient way to get paid, you should incorporate automatic payments for your billing process. But you might be wondering how to set up automatic payments for your business. First, you’ll need to research and find out the range of companies that offer recurring or automatic payment solutions. From there, choose the automatic payment solution that works best for you and your business.

To start accepting automatic payments, you will need to let your clients know that you plan to incorporate this service. Disclose the date on which this service will become available and offer incentives to encourage your clients to try it out. By accepting recurring payments, you can help your business receive payments faster, improving cash flow in the process.

How to Set Up Automatic Payments?

Accepting automatic payments will drastically improve your cash flow and accelerate your business to new opportunities. But first, you’ll need to identify the payment service provider that works best for your business. Then, make sure you choose the one that fits your budget. Here are some steps that you’ll need to take to set up automatic payments and encourage your clients to try out this new feature.

Do Your Homework

Do your research by looking around the internet for the best automatic payment service provider. Look into various brands that enable small businesses to accept recurring or automatic payments. Choose the provider that has all the features and offers you need. The majority of providers will charge you with a transaction fee for each credit card payment – including recurring payments. Make sure you research and determine the fees they charge. Some notable auto-payment service providers include the following:

  • Cloud-based Accounting Solution: this type of software allows customers to quickly set up automatic payments through credit cards when paying invoices online. 
  • PayPal: this popular payment system allows you to accept recurring PayPal and credit card payments online. It also accepts both in-store and online payments.
  • Square: this application allows you to accept recurring credit card payments online. It also supports mobile, in-store, and online payments.

Make Sure It’s 100% Secure

Most of the time, an automatic payment merchant will offer a high-level security and encryption system while handling client payment information and personal data. But despite all of these security features, always do your diligence by looking into the specific payment security procedures offered by the provider you choose.

Introduce It to Your Customers

Once you subscribe to an auto-payment service provider, make sure you inform your clients about it. Let them know that they can now use the service to pay for their invoices. Don’t forget to update the payment terms on your invoice.

Make sure you also include the note in the invoices that you send via email. You can even send them a separate email detailing the new automatic payment service that they can avail. They will appreciate the convenience of automatic billing, which will encourage them more to make payments.

Provide Incentives

To spice things up, even more, you can even offer an incentive to your clients whenever they sign up for automatic billing payments. Consider giving rewards to clients who sign up early. For example, you can provide a small discount on their invoices. It can be either a dollar amount or percentage deducted from their total bill in the month they sign up for automatic payments.

Types of Recurring Payments

There are different types of recurring payment options for small businesses. Using the right kind of service will get your business paid faster. But before you can acquire this benefit, you’ll need to determine which type of recurring payment is right for your business.

Keep in mind that the kind of automatic payment option you can offer your clients will highly depend on your business model and industry. These recurring payment types include the following:

Fixed Amount Auto Payments

As the term implies, this type of automatic payment charges the same amount in each billing cycle. It’s a common auto payment system for small businesses that offer subscription-based services. A good example would be freelance web developers who provide the same service for their clients every month and charge a standard monthly fee. In addition, fixed amount auto payment is also the most common type of recurring payment subscription service.

Variable Amount Auto Payments

Auto payment accounts can vary from different invoices. It depends on the type of service that the client purchases for a particular period. This payment model is pretty common, most notably for freelancers like content writers and graphic designers. Both services tend to change per month depending on what their clients need. This type of auto payment is referred to as variable amount auto payments.

Pre-approval Transactions

This type of automatic payment involves pre-approving a credit card which would be charged shortly after a service is provided. Unlike the aforementioned auto payment options, pre-approval is not as common to entrepreneurs and freelancers. However, they are pretty common for the following industries:

  • Ride-hailing
  • Food delivery
  • Couriers
  • Package delivery
  • Freight transportation

These services require a card to be pre-approved once an account is activated and charged after every service provided. 

Why Should Your Businesses Accept Auto Payments?

Today’s trend where everything is automated makes it essential for businesses to embrace this format by incorporating it into their billing platform. In addition, this process is more convenient for your clients, which would help you get paid faster. Apart from that, here are other benefits of accepting automatic payments.

Improves Business Cash Flow

With an automatic payment system in place, your business will never have to worry about whether or not your client will pay on time. You will know exactly when your payments will get processed every month since everything is fixed and set. This process will help improve your cash flow and let you plan for how you’ll spend your money.

Client Satisfaction and Convenience

If you want to get paid, it’s essential to keep your clients happy and impressed with your service. In most cases, clients prefer paying with automatic bill pay since it lets them set up a payment schedule only once and forget everything about it. In addition, automatic payments provide clients with the assurance that their bills will settle on time without making the payment themselves.

Time Saver

With automatic payment, you won’t have to create individual payments for each client per month and send them manually. You also won’t have to process payments whenever you receive them. Automatic bill payments allow you to automate all of these processes so you won’t have to do them yourself. That means you’ll spend less time invoicing. Instead, you can allocate the extra time you have to other important areas of your business.

Environment-friendly Option

It may come as a surprise, but auto bill payments are better for the environment. It eliminates the need for sending physical invoices by mail. Your client will also appreciate not having to mail paper checks. By going completely paperless, you’re not only preserving the trees, but you’re also cutting waste – both of which are better for the environment in the long run.

What Types of Businesses Benefit from Auto Pay?

Automatic billing offers small businesses reliable cash flow, which allows you to spend less time invoicing and payment processing. With that said, is this type of payment method right for your business? To give you an idea, here are some businesses that benefit the most from accepting automatic payments from their clients:

  • General contractors
  • Lawyers and law offices
  • Freelancers, including content creators, digital marketers, web developers, and more.
  • Daycare service companies
  • IT service providers/IT professionals

Why Consider Recurring Billing

If you want to automate your entire payment processing, you can’t go wrong with recurring billing. This billing model will ensure that you get paid on time while satisfying your customers with your efficiency and professionalism when it comes to asking for payment. There are a number of reasons to consider using recurring billing, but here are some key benefits: 

  • Increased customer loyalty and satisfaction – When customers know that they can count on regular payments being taken care of automatically, it gives them peace of mind. At the same time, it also builds loyalty that will benefit your business in the long run. 
  • Fewer late payments and collections efforts – Automated recurring payments mean that customers will never forget to pay their recurring bills, so you won’t have to deal with late payment fees. 
  • Convenient for the customer – Customers can save time because they don’t have to go through a checkout process every time they pay you. At the same time, they also won’t need to remember when payments are due anymore.

Recurring Billing in Action

There’s no need to worry about recurring billing being too complicated. Here’s how it works: 

  • Step 1: The customer signs up for recurring billing with the merchant, who will take payments automatically from their checking account or credit card depending on the payment period you and your customers have agreed upon. You can request your customers to sign up for recurring billing through your website, over the phone, in person at your brick-and-mortar store, or from your recurring billing invoices. 
  • Step 2: The customer agrees to have their account charged automatically, and you agree not to change the recurring payment terms without letting them know about it first.
  • Step 3: The recurring payment is processed on the schedule you agreed to when setting it up – This could be monthly, quarterly, or annually. 
  • Step 4: Customer notification and authorization – It’s essential to keep in mind that just because a customer has authorized recurring billing doesn’t mean they can’t change their mind. That’s why you should allow your customers to cancel their recurring billing subscriptions at any time. At the same time, you can also allow your customers to switch the payment method used for recurring charges or have recurring charges be dropped if they’re not being met on your end.

Recurring Billing Tips & Tricks

Whether you are just getting started with recurring billing or looking for ways to improve your current process, here are some tips and tricks: 

  • Make it easy – Make it easy for customers to sign up for recurring billing on your website or over the phone – Include information about recurring billing on your invoices – Let customers know when their next payment is due so they can plan ahead. 
  • Make it convenient – Process recurring payments on a schedule that works best for you and your customers – This could be monthly, quarterly, or annually. 
  • Make sure it’s error-free – Keep track of recurring payments to ensure there are no errors – You can use recurring billing software to help you stay organized. 
  • Educate your customers thoroughly – Respond promptly to customer inquiries about recurring billing so they feel confident and informed about the process.

Recurring billing is a popular payment method that you should consider. Now that you know what this billing model is about and what it can bring to the table, the next step is to choose the ideal recurring billing software. The platform you will choose will be the one to deliver all the necessary features you need to get started with recurring billing. So make sure you choose wisely.

How to Choose a Recurring Billing Software

With so many recurring billing software available, making a choice can be difficult. However, deciding on which to choose shouldn’t be rocket science. All you need is to answer a few questions:

Which type of payments do you need?

It’s a good idea to start your search by determining which type of payments you need to run your business. Are you looking to process only recurring payments, or do you want to charge customers for one-time purchases (for example, for specific extra items)?

Does the recurring payment system work in your country?

This one is pretty obvious but gets overlooked most of the time. Yes, there are tons of recurring billing software out there. But focus only on the ones that work in your country. You can also go for the ones that are available internationally if you have clients overseas. ReliaBills, for instance, is a great invoicing system that only works in the U.S.

How long will the integration process take?

Always keep in mind that people are impatient. They want their transaction processed immediately, or they will get frustrated and not acquire your services again. That’s why you would like an auto payment system that’s fast, simple, and extremely reliable. Finds a payment processor with a clean API – one that doesn’t require weeks of setting up before you can start using it to charge customers.

Is the number of plans limited?

Note that it’s much easier and convenient to run a successful business when you can freely set and modify plans that meet all of your requirements and needs. So, when a recurring billing service lets you make an unlimited number of plans, you can offer your customers an extensive number of recurring payment options.

Wrapping Up

The bottom line about setting up a successful automatic payment system for your business is doing your research. First, see which system your competitors are using and which ones are the best for your business. Then, ask people around and get their feedback on the system you’re about to choose. That way, you will never go wrong with your choice.

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