Businesses can automatically bill customers for any balance due, without having to send invoices or obtain payment information every time money is collected. Businesses can use recurring billing programs to make electronic payments, including direct debit ACH transactions and credit/debit cards transactions. Businesses can also convert their legacy payment systems into recurring billing systems that use only ACH direct debit transactions to reduce processing costs by up to 50%.
The Direct Benefits of Auto-Recurring Billing to Businesses:
- You get your money quicker with faster payment processing
- Eliminating printing, mailing, and postage fees
- Elimination of defaults, and related collections
- Bookkeeping and data entry simplified
- Eliminating time-consuming bank trips
- Normalized cash flow
- NSF notification within 24-48 hours
- Improved customer service
- Accept payments made from checking accounts, credit/debit cards and savings accounts.
You can use auto recurring billing for either static recurring charges (the exact same amount each month) or variable bills. The recurring billing system can be used in both static recurring charges (the same amount each time) and variable bills. It saves customers time and money by only entering their information once into a database. This data can be accessed at any time payments are processed and updated in the customer record to reflect each payment. These two examples show the steps involved with auto recurring billing systems for processing both static and variable charges.
Auto Recurring Payment: Static Amount
- Customers data are entered once. This includes account information, amount, frequency, duration, type, and type of transaction.
- Payment Processing System debits/charges account according to a schedule and counts down the remaining payments (system can also been set for an indefinite period).
- The payment processing system generates an automatic email receipt for the customer. It also copies the vendor.
- Payment Processing System automatically detects failed transactions and reconciles them with the main database.
Auto Recurring Payment: Variable Amount
- External database stores customer data that is used to calculate payment due
- Export data, including account information and amount due, to the.csv file.
- The.csv file can be uploaded to the payment processing system in a batch
- All transactions are processed by the payment processing system in batches
- All successful and unsuccessful transactions are included in the report
- Export the report and upload it back to the original database. This will reconcile all outstanding balances with any processed payments
Why your customers want auto-recurring billing
Not only is it a time- and money-saver for businesses but also for consumers. Many consumers demand it from companies they do business with. If you don’t offer it your customers might choose a competitor.
NACHA.org is the US organization that monitors electronic payments. It reports that 54% US households use ACH (an automatic debit from a savings or checking account) to pay at least one monthly bill. Automated recurring billing is a new way to use ACH. It eliminates the need for customers to pay bills by actively paying them.
Customers get direct benefits from auto recurring billing.
- Bills are automatically paid on time, every time, regardless of whether customers are sick or out-of-town.
- Late payment fees can be eliminated
- It is time-savings and cost-effective to write and mail checks.
- Customers can store electronic copies of all invoices or receipts.
- Electronic payments are safer than paper checks