When you are starting a new business, one of the first things you need to think about is what payment methods you are going to offer.
After all, business is all about getting customers to buy your goods or services and pay for them!
So there are some good reasons why you may want to factor in online payments for your business and in this post, we’re going to look at a few of the pros and cons of taking online payments as a new business.
Strictly speaking the term “recurring payments” refers purely to a specific type of instruction given to your bank.
In the banking and payment processing world, a recurring payment is an agreement between a customer and a business to allow the company to take amounts of money from the customer’s debit or credit card on a regular basis.
But in many instances people tend to use the term recurring payment to also mean direct debits or standing orders. Legally and operationally, these are completely different things so in this article we’re going to focus purely on the benefits of a recurring payment option.
The business that wants to grow needs to have access to cash and to have a predictable income stream.
Recurring payments offer this as the financial manager knows exactly when the payments are going to fire and how much they are going to be. The certainty offered by the recurring payment system means that the company can concentrate on growing rather than worrying about cash flow.
Debt management is much easier using recurring payments.
The first reason is that it is much less likely that your customers will get into debt in the first place. Their monthly payment is made at the same time each month and this is much more reliable than just hoping that they remember to put you on their manual payment list.This means that your company is likely to have a smaller aged debtors listing and more cash in its bank account.
When customers do fall behind, setting up a recurring payment for slightly more than their monthly purchases means that they gradually and reliably get their account back on track. This is helpful because it tends to lead to fewer upsets and lost customers whilst at the same time making credit control much easier.
Making the payment process simple and worry-free means that customers are much more likely to be loyal to your business. After all, why would they bother looking around for another supplier when they already have an easy way to pay?
Keeping costs low when you are growing is important. Recurring payments are much cheaper to operate for the business, both from the point of view of bank charges but also in regards to processing costs.
If you sat and worked out how much time is spent issuing invoices, receiving cash, manually entering on your system and then reconciling the customer accounts then you would probably be horrified!
Add to that the additional time, effort and cost of credit control and you can see that manual payment processing is an incredibly time-consuming and therefore expensive proposition.
Manual payment processing is also prone to errors and putting these right is massively time-consuming too.
A well set up payment processing system like PaySuite will integrate with your website and accounts package so that your customer payments are dealt with automatically, accurately and without fuss.
However the biggest benefit of a recurring payment system is that it gives your business options.
You can develop into a subscription model business, use it as a method of collecting variable amounts or offer it as a method of prepaying accounts.
The important point here is that as your business grows, you will need to make sure you are able to continue to offer your customers the options they want and that your company remains flexible in the way it does business.
The key to growing your business is to have happy customers.
This takes two forms; making your products or services as useful and attractive as you can and making it easy to buy and pay.
Customer-centric businesses sell more, have more engaged customers and find that they develop a true community rather than simply a transactional user base.
A customer-centric business puts the needs of the customer front and centre in everything they do, from product design right the way through to payment processing.
Rather than forcing people to use the payment method that the company prefers, the customer-centric business provides as many easy ways to pay as they can so that the customer can pick and choose the one that suits them the best.
Setting up a recurring payment for your buyers means that it will stop them racking up debts that are either a surprise or that they find hard to pay back. This kind of regular payment method makes it easy to budget so that they know where they are at all times.
One of the most annoying things is when a service is cut off due to non-payment. Often this isn’t wilful refusal to pay, but more a case of simply forgetting to go through the payment process.
Having a recurring payment authority means that the customer can always be certain that the business will maintain service on their account and avoids those embarrassing outages!
With a continuous recurring payment firing in the background, the customer won’t have to worry about payments, they simply happen automatically at the same time every month.
Setting up a recurring payment authority is much quicker than doing it manually. You only have to do it once and when it is in place the customer can just forget about it.
Contrast that with logging on to the bank every month and making the payment manually and you can see why customers prefer the recurring payment option.
As the recurring payment process makes a call on customers’ bank accounts you would expect it to be fully secure.
This means that you need to have in place an authorised recurring payment processing service that you can connect to.
PaySuite offers businesses a fully secure and simple to use payment processing solution, allowing companies large and small to take recurring transactions with ease.
Summary; Recurring payments are a great option for growing businesses
Growing businesses need to make sure they both delight their customers and keep a handle on costs.
Recurring payments are an easy to use, convenient and reliable method for the customer to ensure that their account is settled.
For the business, the ease of use, low cost and accuracy of recurring payments means that they really are a superb option.
Add to that the fact that using recurring payments means that bad debt is reduced and you have a reliable and predictable cash flow then you can see why so many companies are now taking up this method.
If you’d like to talk to someone about how recurring payments through Access Paysuite can help your business, then why not book a call now?