Here is a clear fact regarding your business. If you don’t get paid, you don’t grow. In addition, your survival rate decreases significantly. Of course, subscriptions and other payments are necessary.
Unfortunately, situations stop this. For example, people forget to pay a bill. Or your business joins half the US population and falls victim to: theft of financial identity.
Fortunately, there are ways to minimize these risks. It is through the use of automated payment methods. Here are a few reasons why businesses should use this form of transaction.
Subscription checking is the method behind automatic payments once a trial period has ended. It ends the trial period or runs the installment program that the customer has agreed to. One way to do this is by using a free virtual map.
Online financial institutions such as Otto offer this method of checking. It consists of a unique digitally created 16 digit number associated with your business. The real card number is secured so you have more control over its use. In general, it helps to keep track of your active/inactive subscription database.
Faster cycle payments
Money moves in a circle for businesses. Money is coming in from customers. In turn, they are used to pay suppliers for their services. They provide the tools and inventory necessary to keep customers happy, so they pay regularly. And so forth.
When you set up an automatic payment method, it speeds up the cycle. This will give you a faster return on your investment. In addition, you avoid late payment costs due to slower invoice processing.
There are at least three common mistakes related to manual payments. First, the customer forgets to pay. Second, they pay the wrong amount. Third, they accidentally double their payments.
All three are eliminated through an automatic payment method. This makes the money available to make payments to the parties that keep your business running. Moreover, you maintain a positive relationship with your customers. To put it another way, they are not angry that they lost money because they duplicated their subscription payment.
Fraud and other forms of criminal activity related to finance have never abated. With technology, cyber extortionists have found new ways to disguise themselves to inflict monetary damage. This is greatly reduced by automatic payments.
There is little chance that anyone can falsify an invoice. Never mind extra sensitive information. If automatic payments are active, confirmation emails will be sent out to ensure that you are the person who has terminated the contract. This helps investigating officers in tracking down criminals.
Increase the flow of information
The more customers make automatic payments, the greater the opportunity for businesses to collect accurate data. They collect information about pay cycles, average amounts and the number of people who start or end a contract. From this they make a good deal about their financial future.
For example, the information predicts cash flow. It indicates which subscription packages are selected and which are not. This gives your finance officers the power to modify those packages to increase revenue.
Fewer questions and credit hits
Obviously, when customer bills aren’t paid, you’re not getting any money. In turn, you do not pay your suppliers. They regularly send inquiries about payment status. If you go over a period of days, your credit bureaus will be alerted.
This doesn’t happen as often if you have automatic payments. Yes, there are times when the expected money doesn’t come in because a customer cancels the program or changes the date. However, these are minor inconveniences that are counteracted by regular payments. This ensures that your suppliers are paid on time.
Less expensive transactions
Paper checks and credit cards have higher processing fees. Sometimes as much as $20 per transaction. This takes a lot of your income stream.
Automated electronic payments have less expensive costs. In fact, depending on the financial institution, some are zero. Thus, the total percentage of fees paid through automated payments is negligible.
Needless to say, there are several benefits to automating your payment methods. The next step is to make the step to the process. Talk to suppliers to determine who is the best fit for your business and your subscribers.