Recurring Billing

Once you begin researching the various recurring billing companies, you'll soon realize that the most obvious benefit of automated recurring billing is the time that is saved. Traditional billing methods involve a lot of paper, postage, data entry, accounting knowledge, and above all time to perform all these tasks. This is a lot of work when you are charging a client the same fees every month. Recurring billing allows you to set up a client's account and forget about it, so to speak. When it is time for the client to be billed, he or she is notified via email. There is not even a need for you to login and issue the statement; the billing system just knows its time and sends the invoice. Furthermore, some people may be considering a software-invoicing product instead of a web-based invoicing system. However, when you look at software versus web-based recurring billing, you will see that the software involves time to set up, purchase, install, and maintain down the road with timely downloadable updates. With web-based automated recurring billing, you can be up and running in a matter of minutes.

The second most obvious point you may see when researching recurring billing systems is that there is no doubt about the cost saving benefits. Again, if you were to compare software versus a web-based automated recurring billing system, then you will notice that first off you must purchase the software. Secondly, you must install it, spend time setting it up, and finally you'll have to maintain it. Consider the time spent doing this, and then consider what that time means in terms of money. Also, when considering the cost saving aspect of web-based recurring billing, you should know that recurring billing starts at $14.95 per month for the most basic plan. Thus, for a mere $14.95 per month you can forget about paper bills and data entry because it is taken care of for you. This allows your employees to spend time doing something else that may be more important. Finally, consider how many bills you mail out per month. The postage from this alone can really add up, and unfortunately the cost of postage keeps going up. Automated recurring billing eliminates the need for postage, and therefore allows you to spend that money elsewhere.

With web-based invoicing systems, customers can view their accounts and print invoices twenty-four hours a day, seven days a week. This customer convenience is also a benefit for you, because you no longer have to worry about replacing a lost invoice. Furthermore, thanks to the high-level of security that web-based invoicing systems offer, both you and your client can view the past payment history and download any past invoices. This security safeguards the customer's financial information such as credit card information. The ability to securely hold a customer's credit card information enables some web-based invoicing systems to automatically charge a customer's credit card each billing cycle. Not only does the customer have one less thing to worry about, you do not have to worry about late payments. Your customers will also enjoy the real-time processing abilities of web-based recurring billing. This real-time processing means that when the bill is paid and the credit card is charged, the payment and the charge show up almost immediately. If you compare this to software invoicing products, you will always have to replace lost invoices, resend old invoices if the customer requests them, and only you can view their account. Also, customers will not have the feature of real-time processing since they will need to mail in a payment.

Web-based invoicing systems are so easy to use that even the less technical savvy individual can use them. Many times, recurring billing can be set up in a matter of minutes, and this setup often will include the ability to start taking payments. You do not need to even set up the customer's account. This would be their responsibility, and all they would need to do is register with a valid credit card. Another point to be made for web-based invoicing systems is their ability to share information with anyone who has permission to view it. You can assign permission to view customer accounts to one person, or you can give permission for three people to view customer accounts. It is totally up to you. This can be helpful if someone is going on vacation or is out sick and enables you to easily cross-train your employees. This is in contrast to software invoicing products that require software programs to be installed and linked between employees' computers in order for information to be viewed by numerous people. This can be a hassle sometimes if computers and offices are changed around or someone is out for the day.

Recurring billing is for companies whose customers will incur the same fees every month. Some may think that this locks you into a particular billing cycle that may not work for your company; however, just the opposite is true. Recurring billing through web-based invoicing systems gives both customers and companies billing freedom. Web-based invoicing systems keep track of a variety of fees such as a one-time fee, start-up fees, maintenance support, annual fees, monthly fees, etc. You can set up a customer's account with whatever fees you need to charge every month, and all these fees will appear on the same invoice. If you even need to change those fees because a customer added or took something away from their account, then you can make changes with absolutely no problem. Also, you can offer billing options that can meet both your needs and the customers. For example, you can offer annual, monthly, weekly, or bi-weekly billing cycles. These billing cycles do not have to be the same for every customer either. Web-based recurring billing allows the customer to choose the billing option that is best for them.

The alternative to using a recurring billing system is that someone has to enter all the customer's data, maintain collection records, and manage all the billing cycles. This human method, regardless of how precise someone is, can lead to a lot of costly mistakes and disputes. These mistakes can range from bills that are not sent out to a customer not receiving credit for their payment. These types of human mistakes are common, but can be greatly reduced by using a recurring billing system. Recurring billing systems keep track of all this information, so humans have very little to do with the day-to-day billing and collection method. Recurring billing also allows a company to reduce debt and plan ahead because they have a more predictable cash flow. When a customer receives an invoice, they are more likely to go ahead and pay it, because they can do so at their computer with their debit or credit card. This is opposed to writing a check and mailing it, which can lead to no or late payments. These types of payments can seriously throw off your monthly cash flow models, which in turn can affect how you pay your bills.

When processing payments, security is of the utmost importance. If your customers cannot trust you to securely handle their payments, then you are going to lose a lot of business. When researching recurring billing systems, you need to understand that when a client pays via the web with a credit card, that payment must go through a payment gateway. Payment gateways encrypt the customer's information so no one can view it and then steal it. Payment gateways are similar to a Point of Sale (POS) machine that you would have at your local grocery store to use for credit and debit cards. Depending on the services you choose, you may have to pay a fee for recurring billing as well as the payment gateway. Prior to signing any agreement for automated recurring billing, you will need to inquire about payment gateways and the compatibility of the invoicing system to different payment gateways. Many web-based invoicing systems have a global gateway feature that will enable it to work with nearly any payment gateway, but you will still want to ask just to be sure. While the payment gateway does keep sensitive information secure, many recurring billing companies also make it their policy not to share the information they receive from their customers with third parties, unless they are required to do so by law. This protects not only you, but your customers, as well.

Depending on your business, you may already have a merchant account. However, if you do not have a merchant account, you will need to get one in order to receive payments online. Merchant accounts can be very inexpensive, and some recurring billing systems may offer you a special deal if you sign up with one of their preferred merchant account companies. However, this should be done with caution because merchant accounts do charge monthly fees and credit card processing fees. These fees can vary from company to company, and you will need to make sure that you are getting the best deal. Also, you will need to inquire as to whether or not the merchant account covers your payment gateway. It can often be confusing as to how merchant accounts, payment gateways, and recurring billing work together. The first thing that occurs is your recurring billing system sends out an invoice. The customer then goes to your merchant account to pay the invoice. When the customer pays the invoice, the credit card information then goes through a payment gateway, where it is encrypted, and funds are deposited into the merchant account. The billing system knows the customer paid the bill because it is linked to the merchant account. You can do what is called settling the account on a daily, weekly, or monthly basis in order to receive funds from a merchant account. Settling the account means that you have requested funds from the merchant account to be transferred to your banking account. You can talk with the recurring billing customer support to make sure that you are purchasing the right services to meet your needs and to ensure that your merchant account, payment gateway, and recurring billing system all work together.

Accounts receivable financial reports can give you a great picture of how your company stands from an income basis. Recurring billing systems allow you to print out daily, weekly, monthly, and yearly reports to see where you stand in terms of collections. This means you can view very detailed reports on your customers' recurring payment status, as well as view other reports that can include daily recurring activity such as payments received, new customers, renewal customers, outstanding payments, and who as well as how much was billed on a particular day. Furthermore, these accounts receivable reports can be coupled with other significant financial reports, such as expense reports, in order to see whether or not profits are increasing or decreasing and allow you to plan for the future of your business. These reports can be generated within the billing system or can often be exported easily to a spreadsheet or database. Many software-invoicing systems will generate reports, but keep in mind that only the person with the software can generate them. With web-based recurring billing, anyone who has access to the system can generate reports. This can help take the load off some employees since report generation would be open to everyone.