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How Automatic Payments Help Small Businesses

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Last editedApr 20222 min read

Automatic payments allow you to provide customers with greater flexibility, enabling you to increase cash flow and scale your company more quickly. Companies that can benefit from automatic payments range from lawyers and contractors to freelancers, fitness businesses, IT professionals, and many more.

In this post, we’ll discuss the types of automatic payments a business can offer and outline the advantages of considering auto payments as an option for your customers.

What do we mean by automatic payments?

Automatic payments can be made for one-off or recurring payments, and they can be set up to charge customers at a fixed or variable rate.

Direct Debit for business is a popular way to collect automatic payments. Direct Debits are automated payments that transfer money from one account to another. They’re a convenient way for customers to pay regular bills and subscriptions, like gym memberships.

They’re quick and easy to set up, and once in place, customers no longer need to remember to make payments – taking away the risk of incurring late fees.

Fixed Direct Debits

Direct Debit for businesses provides a quick and easy way for customers to pay their regular bills at fixed amounts per month. Direct Debit can be a useful way of spreading the cost of paying for items, while it can also be used for one-off payments.

Variable Direct Debits

Automatic recurring card payments can be set up for variable amounts to tie in with the services provided to a client. This is of particular benefit to:

  • Freelance creatives, who need to change the amount they charge clients regularly since their charges vary month to month according to client demand.

  • SaaS companies, who often prefer to use Direct Debit for business for variable amounts, since this allows them to upgrade or downgrade their customers’ subscription tiers with ease.

Benefits of auto payments

  • Set once and forget: This offers greater flexibility for customers. Customers often prefer to pay by automated payments since they know they can set it up and no longer think about making payments, as they’ll be handled automatically.

  • Automated rebilling: Automatic billing cuts down on the time spent chasing up payments and bad debts.

  • Less manual processing: Auto payments will boost efficiencies by cutting down on manual processing and reconciliation.

  • Improves cash flow: With auto payments, businesses need no longer worry about whether customers will pay on time, which helps with forecasts and planning ahead.

  • Greater security:Auto billing offers customers greater security by encrypting their information.

How to set up automatic payments

To set up Direct Debitfor businesses you’ll need to find a company that can offer recurring payment solutions. Select a provider that fits your business model and budget. Furthermore, be sure to choose one that offers a high level of security and encryption when handling your customer data and payment information.

Once you’ve opted for an automatic payments provider, you’ll need to let your customers know that you’ll be offering auto payments as an option. You can do this by updating your payment terms on an invoice with a note that informs them you now accept recurring payments. Alternatively, you could include an email with each invoice, informing customers that they can now use Direct Debit payments to simplify the billing process.

You may need to offer incentives for customers to try out automatic payments. For example, early adopters could be offered a small percentage off their invoice for the first month.

We can help

GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.

Over 70,000 businesses use GoCardless to get paid on time. Learn more about how you can improve payment processing at your business today.

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