Setting up proper payment systems and methods is an essential part of running a small business. Whether you’re initiating payments for your business expenses or setting up various payment schemes for your customers- it’s a good idea to keep recurring payments in mind.
But what exactly are recurring payments, and why should they matter to your company?
What are Recurring Payments?
In simple terms, a recurring payment is a repeating payment. This cost or payment type happens on a regular basis for your company or your customers. Sometimes referred to as recurring billing, these ongoing expenditures allow a merchant to automatically charge the cost of goods or services to the customer on a prearranged schedule.
Difference between one-time payment and recurring payment
A one-time payment is just that, a charge that happens once. Enjoy a product or service from a company after a one-time transaction? You could have the option to sign up for automatic payments to repeat your experience every month. Repeating transactions regularly would be considered recurring payments.
Examples of Recurring Payments
Recurring bill payments are a great example of this type of expenditure. Suppose you have ever signed up for regular monthly payments, such as:
- Magazine or newspaper subscription
- Utility bills such as electricity, gas, and water
- Gym memberships
- Cell phone services
- TV subscriptions like Netflix, Disney+, Amazon Prime
- Subscription box services
In that case, you are currently taking advantage of recurring payments.
As a business owner, you could automate your billing options for your customers too. This could help your cash flow and customer services all in one. Learn more about why you should automate your invoicing and billing process for your small business.
How to Set Up Recurring Payments
To set up a recurring payment, a company must first get explicit permission from your customer. The customer must sign off on the ongoing charges attached to their bank account in exchange for the product or services.
Only after they have given you permission for the periodic payments, as well as the corresponding payment information, can their bank account be charged accordingly. Once this process is completed, you will schedule recurring payments to your customer’s account until you or the customer cancels the service.
Best Apps to Accept Recurring Payments
SalesGURU Online offers individuals and businesses an easy way to stay on top of their ongoing charges. Create and manage recurring payments all in one place with an intuitive interface and dashboard. Pay ongoing expenses for your business and create payment options for your clients and provide them with the opportunity of recurring payments for your services or goods.
Fusebill puts the control back in your hands. It allows you to decide the type of billing, frequency, and add-ons to your recurring customers’ payments.The app features an automatic subscription tool that you can customized based on your client’s selections. Using a self-service portal, your customers can update payment methods, view invoices, or buy more services.
Recur360 is a one-stop solution to create and process all of your recurring payments. Recur360 will allow you to manage, process, email, and report on all of your recurring invoices, payments, and collections.
How to Manage Recurring Payments
Signing up for multiple recurring bills can cause you a lot of headaches if you are not careful managing these scheduled payments. If you forget how many different payments you have ongoing with your account, you could become overwhelmed with the constant cycle of charges.
Therefore ensuring proper management of your ongoing payments can help you stay organized. Using software and other accounting or banking systems can help you manage recurring payments without the need for constant reviewing. Keeping a calendar for your payment schedule and when each automatic bill comes out of your account, can also help.
Automatically pay your recurring payments when you set up the function in SaleGURU Online. No need to set reminders for yourself for those pesky bills or other payments when you use this accounting software to do it for you. With an easy-to-use interface, you can see where all your recurring charges are coming from, manage your bills accordingly, and provide your customers with convenient automatic payment options.