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Benefits of Automatic Payments for SMBs

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Last editedOct 20212 min read

Technology has done a lot for business, and one way that it can make your life easier and more efficient is through automatic payments. This payment model is becoming more and more common with the rise of subscription services such as Netflix and Amazon Prime, and they cut out a lot of legwork for both your company and your customers. There’s no reason for this to be limited to large corporations though – small businesses can also save a lot of time and money in this way. Read on to find out more about how to set up automatic payments and how they could transform your business.

What is automatic payment?

Automatic payments are, quite simply, recurring transfers that have been authorized by the client. These will be scheduled on a regular basis, and tend to cover expenses such as billing, loans, electricity and water charges, and subscriptions such as streaming services. They might also occur in B2B transactions where services repeat on a regular basis. This takes the stress out of payment as neither party has to think about when to make it – it is simply transferred automatically.

Benefits of automatic payments for small businesses

There are several advantages of automatic payments:

  • Reduced workload. All you need to do is set up the initial schedule and watch the payments come in. Of course, there may be some changes that you need to manage, but the work is significantly less than manually collecting payments each time.

  • Avoid late payments. When clients have to automatically make payments there is a greater risk that they will forget, which can have a negative effect on your cash flow.

  • Improved security. Most automatic payment apps and solutions have built-in features that help to protect payment information and securely manage customer data.

  • Better customer relationships. Having conversations about late payments can be uncomfortable, and so automatic payments remove this stress from the equation.

Put simply, automated payments make things easier for everyone involved, so setting these up is a no-brainer.

How to set up automatic payments

There are several ways to initialize automatic payments, and all of them naturally require the customer’s explicit permission. This therefore involves an agreement where the customer agrees to make regular payments in exchange for a product or service. The customer can schedule these payments in several ways: through their bank, through a vendor website, or using accounting software. In addition to this, the customer can choose from various payment methods, from a credit card to a savings account and many more.

As with most business processes these days, you can make your life easier with automatic payment apps. This software offers a simple way to set up and manage payments for subscriptions, invoices and regular services. Each app has its own unique features, such as automatic follow-ups for failed payments, self-service for customer support and different dashboard/interface styles.

How to stop automatic payments

While there are many benefits to automatic payments, it’s important to stay on top of them. Particularly when you contract out services or make regular purchases from other businesses, it can be easy to lose track of these payments and run into cash flow issues. Make sure to keep an eye on your outgoings and regularly assess whether these are still essential purchases.

Make sure to cancel your automatic payments in advance, as most businesses require at least three business days to confirm this. You’ll need to contact the company directly, either online or through phone or email, in order to cancel your payments. If you have any issues with this, you can also go to your bank or credit provider and have them cancel the payment for you.

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 85,000 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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Interested in automating the way you get paid? GoCardless can help
Interested in automating the way you get paid? GoCardless can help

Interested in automating the way you get paid? GoCardless can help

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