If you have a company that offers a continuous product or service, setting your customers on recurring payments offers a number of benefits for both you and your customers.
This system is similar to a subscription service, where the customer’s bank account or debit/credit card is processed each period for the amount of that period’s service. This payment solution can be used for a diverse array of companies. Utilities have been using recurring payments for years. However, this type of payment can also be useful for retailers who sell consumable products. Products such as coffee, skin care or wine. Fitness clubs and childcare facilities can also benefit from automated recurring payments, as can businesses who offer installment plans, such as car dealers or lawyers.
1. Less Handling
When you sign up your customers on recurring payments, you don’t have to process an invoice each and every period. You simply set up the initial payment schedule and watch the fund get deposited into your bank account every period. That means your employees can be used for other tasks, improving your company’s efficiency.
2. Better Cash Flow
When payments are scheduled to occur at the same time each period, you’ll have fewer late payments. You’ll be able to budget on that money, rather than simply hope that the customer remembers to send a check or initiate a payment.
3. Uses Fewer Resources
Recurring payments also help you save on paper, envelopes and postage. This is not only good for your bottom line, but also good for the environment. Since more and more consumers are looking to do business with companies that are making efforts to reduce their carbon footprint, making the switch to automated payments can also help you attract new customers.
4. Enhanced Customer Service
Taking direct debit payments is also easier for your customers. They don’t have to worry about remembering to pay you, such as writing a check and taking it to the post office. In addition, since their sensitive personal information is handled less with automated payments, they can be secure in the fact that their bank account or credit card information isn’t going to fall into unscrupulous hands.
Automated payments can be adapted for most any business that regularly bills the same customers. Adopting this system can save your employees time but also help improve your cash flow and enhance your customer service.