Establishing a working business from the ground up can be an overwhelming experience. Most startups today rely on digital tools like recurring billing to ease the transition and make sure their business is up and running. That’s why more and more entrepreneurs are relying on the subscription-based business model.
Not only does it provide predictable revenue, but it can also pave the way for many scalable opportunities for your business. Using a subscription model will ensure that you strengthen customer relationships, attract new prospects, and grow your business in the shortest amount of time.
Identify the Payment Method You Want
However, if you plan to implement this type of business model, it’s essential to know that your payment method will matter the most. That’s why you need to incorporate recurring billing to ensure that your customers are paying you regularly. But while it may seem like a simple process to incorporate into your sales management, it can get pretty complicated as your business progresses.
Failing to manage recurring payments quickly and efficiently will cause your business to crumble under the pressure of billing customers. At the same time, your customers will lose faith in your business and head towards your competitors.
Fortunately, learning how to handle recurring payments doesn’t have to be an impossible challenge. Like many other payment strategies, recurring billing can be done with the right amount of information.
Why Startups Need to Set Up Recurring Billing
As more businesses are switching to recurring billing, startups should take advantage of the trend. The subscription model provides a steady cash flow for companies while freeing up their resources to focus on other areas that will generate higher profits. It also helps avoid potential payment delays or errors that could result in late fees or customer cancellations.
In addition, recurring billing will also give startups a competitive advantage in the marketplace. If a startup is offering monthly subscriptions for their products and services, they’re giving customers peace of mind knowing they won’t have to worry about invoices or pay every month.
Customers Love Recurring Payments
Another reason why startups should consider recurring payments is because consumers love it! This billing model benefits not only the business but its customers as well. Recurring billing provides benefits that include:
- Less time spent on administrative tasks. With recurring billing, invoices are sent to customers automatically, and they won’t need to act on these documents every month.
- No late fees for missed payments. Businesses can use different payment schedules that work best for their specific needs. For example, monthly installments allow the business owner to collect payments for an entire month, even if the customer only uses the product or service for one week.
- Convenience and peace of mind. With recurring billing, payments are guaranteed to be safe and secure. Customers don’t need to worry about late fees, delays in payment, or other similar issues associated with manual invoicing processes.
Recurring Payments is the Key to a Sustainable Business
Another reason why startups should consider offering recurring billing is that it helps businesses become more sustainable. Customers are willing to avoid late fees and other similar issues associated with manual invoicing processes. Meanwhile, the subscription model allows business owners to receive their payments on time while freeing up resources to focus on higher-profit areas.
Automation Makes Doing Business 10x Easier
The automated invoicing process is one of the most significant benefits for companies that offer recurring billing. Automation ensures your businesses can streamline its payment processing and avoid potential administrative costs associated with delayed or incorrect payments. It also reduces errors, so customers don’t have to be charged again if a check doesn’t go through the first time.
The Global Reach of Recurring Payments
Recurring payments are growing in popularity worldwide because they provide an easy way for businesses to stay profitable while avoiding payment errors or delays that could affect their cash flow. Customers also benefit from this type of billing by not worrying about remembering to pay every month since the payment is automatically drafted from their bank account.
Traditionally, recurring billing has been used mostly for physical goods like software or cell phone plans; however, more and more BPOs are switching to this type of automated invoicing because it offers so many advantages. Using recurring billing can help companies avoid payment delays while providing a consistent cash flow that helps them grow their business.
The Popularity of Subscription Models
Subscriptions are becoming more popular for software and digital services. It’s an easy way to ensure customers always have access to the latest version. It also provides businesses with recurring revenue they can count on, which can help with expansion and hiring new employees.
Tips to Follow When Setting Up Recurring Billing for Your Startup Business
Are you focusing more on customer satisfaction? Or are you leaning more towards perfecting your payment processing and collection? How about both? These are just some of the questions you need to consider when setting up your recurring billing system.
Once you’ve set your goals and priorities, the next step is to follow the tips outlined below to ensure that your recurring billing system works effectively and efficiently.
Tip #1: Offer the Right Payment Method
Once you’ve chosen the ideal market during the assessment phase, the next thing you’ll need to do is determine the right payment method for that particular demographic. For example, recurring payments are more popular among millennials than other groups.
In addition to the right payment method, you’ll also need to decide how frequently customers will be billed and whether or not they can make changes in their subscriptions after signing up. The last thing a customer wants is an unexpected charge on their credit card bill because they forgot to cancel their subscription.
Tip #2: Be Transparent with Customers
According to the Harvard Business Review, transparent companies about pricing and billing practices saw an increase in customer satisfaction between 22% and 32%. Being upfront is also essential because it can help avoid potential lawsuits or complaints from customers charged more than they agreed to pay.
Tip #3: Always Have a Good Understanding of Customer Behavior
As with any business, startups need to understand their customers and the market they are trying to sell into. If you know your target audience uses PayPal instead of credit cards, then make sure your billing system is compatible with PayPal.
Tip #4: Offer Good Customer Support
No matter how easy-to-use a recurring billing platform may be, some will inevitably run into problems at some point. For that reason, it’s essential to have good customer support in place when you begin offering recurring payments.
Tip #5: Optimize your billing procedures
After focusing so much on customer acquisition and cultivation, the last thing you’d want is to see them all turn in the opposite direction after a billing mishap. You’d like to make sure your recurring payments are as smooth as possible. This all starts with the suitable systems in place!
Tip #6: Keep an Open Communication with Your Customers
To reduce the number of chargebacks you get with recurring payments, make sure you are open and honest with your customers. Let them know how to contact you if they have any questions or concerns about their billing statement.
Tip #7: Be Transparent About Product Details
Part of being transparent is letting the customer understand what they’re buying. Not just from a product standpoint but also in terms of available features. It’s essential to be transparent with your customers because if you’re not, they’ll find out eventually.
Tip #8: Price Your Products Right
One of the most common recurring billing mistakes is setting prices too high for products that are difficult to sell; this can result in customers using different payment methods instead (or worse yet, canceling their subscription). Be sure to price your products competitively and not too high, as this can give customers a reason to jump ship.
Tip #9: Let Your Customers Choose their Payment Schedule
Consider offering different payment options to your customers, such as weekly or monthly. This can give them a sense of control and increase their satisfaction with the product/service they’re receiving from you. This will also lead to fewer cancellations over time.
Tip #10: Offer Your Customers a Grace Period
Another thing that makes recurring billing so successful is how “forgiving” it is for customers. For example, most recurring billing systems give customers a grace period before their card gets charged. This will allow them to fix any issues with the subscription beforehand!
There are many advantages of offering recurring payments to your business’s customers. Still, it all starts by understanding how you can leverage these benefits in different ways to benefit both sides.
Why ReliaBills is the Best for Startups
If you want to succeed in the subscription business, you will need a solid online platform that offers the best recurring billing feature. That’s where ReliaBills comes in. It’s the best recurring billing software for startups. It provides a truly unlimited number of recurring transactions at no additional cost.
At just $24.95 per month, you can upgrade to ReliaBills PLUS and get access to all the necessary features you need to create a formidable recurring billing strategy.
Another benefit to using ReliaBills as your recurring billing platform is that you get access to an easy-to-use invoicing system so you can generate and send bills with just a few clicks. It’s even available in the basic plan. However, if you want more features, you’ll have to upgrade to the premium version.
In addition, ReliaBills recurring billing will let you offer secure payment options such as ACH (Automated Clearing House), checks, PayPal, and credit/debit cards like Visa®, MasterCard®, or American Express® — making it the perfect recurring billing solution for your business!
If you want to get started right away, you can jump straight to creating your ReliaBills account.
Embracing recurring billing in startups is a great idea. However, it can only be effective as long as you set it up the right way. Make sure you use this article as a reference when you’re ready to transition towards recurring billing. For more interesting discussions about invoicing, recurring billing, and other topics, check out other entries on the ReliaBills blog page.