I would be willing to bet my life's staple of tacos that when you thought about starting your own business, collections would be something you gave any thought and attention to.
Unfortunately, that is a reality that everyone faces on one side or the other. The best way to avoid it and make sure you are paid on time, every time, or not to worry about remembering to pay a bill each month, is by recurring billing. Being able to offer this type of service adds a huge sense of relief for both parties involved.
Sometimes life happens and you need to extend payments. Being able to work with a customer and offer some type of a payment plan, not only is it good for payee to be able to take care of an account balance, the Merchant is also going to get the money owed and not have to deal with the hassle of involving a third party and paying the fees to send it to collections, where things could possibly run the chance of a settlement for a lesser amount, or no payment at all. Recurring billing ensures that the full amount due will be paid and avoiding all of the excess hassles.
It is also a great tool for other types of businesses, like construction for instance. A supplier can keep a company card on file and run a payment at a specified time each month, while the contractors are still getting the supplies that they need.
It's great for a parts store that is sending merchandise out to other mechanics and shops as needed.
Repeat customers account for 40% of a business' revenue. Subscription-based services that are set to bill customers monthly are more appealing than having to come up with a lump sum all at once. It is easier for consumers to budget in a smaller amount in an installment plan and better for the business because it helps ensure that they will be paid. A business may take a risk for non-payment if the customer needs to make payments not set up through reoccurring billing.
If you think that this would be a benefit for your business, contact one of our Professional Consultants, to start a positive business experience and get started in the right direction with the best options in a business plan.