Last editedAug 20212 min read
Are you still using manual billing procedures? Invoice generation and payment collection can be a long and tedious process when you’re relying on manual spreadsheets. An automated billing system cuts down on time and errors, but what exactly is auto billing and how does it work? We’ll explore the benefits below.
Automated billing systems explained
An automated billing system is a type of software solution that takes care of all the functions related to the billing process. With little manual input, an auto billing service can generate invoices, collect payments, and handle approvals and provisioning. Its aim is to streamline all billing processes for greater efficiency.
Automated billing software is particularly well suited to businesses with recurring subscription models. Billing tends to be uniform with customers charged at regular intervals. Service providers like medical, law, and consulting firms also benefit from this type of software. For example, an automated medical billing system manages payment plans for those patients paying for treatment over time.
Benefits of automated billing software
No matter your industry, there are several benefits associated with using an auto billing system.
Consistency – Invoices or bills are generated and submitted to clients in a timely manner, which encourages timely payments in return.
Efficiency – Writing business invoices is a time-consuming process when done manually. Digital billing systems create a more efficient, paperless office and cut down on your admin.
Dunning – Auto billing systems offer a dunning feature to notify customers of expired or declined cards. Prompts are sent out automatically so that you don’t have to spend time on the phone chasing down valid payment details.
Accuracy – Even the most meticulous accountant will sometimes make errors. Reduce the incidence of human error by using automated billing systems. These generate reports free from typos and incorrect billing information.
Data management – As businesses grow, it’s important to find a system that will hold all your new customer details in one place. Auto billing systems manage customer, account, billing, and usage data in a central location.
Compliance – Billing software ensures that your company is complying with the Generally Accepted Accounting Principles (GAAP) particularly when it comes to revenue recognition.
How to set up an auto billing system
If you think your business could benefit from an automated billing system, getting started is easy. To begin with, you should research your options carefully according to industry. An automated medical billing system may have special patient confidentiality and insurance payment features that a restaurant billing system wouldn’t need.
In addition to considering your industry-specific needs, you should ensure that your choice of billing system will integrate with existing accounting software. This makes it easy to transfer your customer payment data over to the new automated system.
The next step is to set up your customer payment portal. This feature allows customers to log in and submit online payments, download their invoices, and update payment methods. Customize your system with your own business details, so that customers can clearly see who they’re paying when they log in.
Choosing the best auto billing system
How do you know that an automated billing system is right for you? We’ve already mentioned the need to consider your industry and existing accounting software. Yet here are a few additional features to look for:
Custom billing capabilities
Real-time payment processing
Automated alerts sent for late payments
Financial report generation
Automatic alerts for expired or declined payment methods
Confidential data encryption
Secure user access
You should also be sure that your billing system of choice follows all GAAP principles and matches your business’s specific revenue recognition procedures. Compliance is key with any billing process – automated or manual.
Overall, the best automated billing systems will make your life easier. Flexible, efficient, and comprehensive, they should provide a one-stop shop for payment collection that works seamlessly with accounting processes.
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.