Last editedJul 20234 min read
Automated billing allows businesses to manage recurring payments more efficiently, minimise late payments, streamline invoicing, eliminate manual admin, and accelerate cash flow. It also facilitates real-time reporting, enabling companies to make informed decisions and gain a more transparent financial overview. Consequently, this allows employees to focus on higher-value tasks, such as customer service and strategy formulation, enhancing operational efficiency, reducing administrative overheads, and improving customer satisfaction.
The hidden power of automated billing
An automated billing system is essentially a digital saviour for SMEs and startups, taking on the manual intricacies of the billing process and requiring minimal manual intervention. These systems offer the dual advantages of generating invoices and automatically collecting payments. The result? A highly streamlined billing system that significantly boosts productivity.
Who stands to gain the most?
Automated billing software fits startups and small businesses operating on a recurring payment or subscription model. With these businesses frequently charging a predetermined sum at consistent intervals—typically monthly—automation offers many benefits.
Reducing late and failed payments
Automated billing offers a robust solution to two perennial problems plaguing SMEs and startups: late and failed payments. These similar issues have distinct origins and therefore need to be examined individually.
GoCardless collects payments using the UK’s bank payment network and so can offer a comprehensive solution to both of these issues.
Failed payments
In the context of failed payments, these are typically associated with recurring Card Payment Authorities (CPA), where the payment may falter due to a lost, stolen, expired, or cancelled card.
Bank accounts cannot be lost, stolen, expired, or cancelled - the leading cause of failed payments - so bank payments enjoy a higher success rate than card payments. Indeed, card payments fail between 10% - 15% of the time; in contrast, GoCardless collects 97.3% of bank payments on the first try.
Late payments
On the other hand, late payments result from a lack of timely manual action on an invoice or payment link. Late payments are a huge issue for UK businesses but can be solved quickly and simply by switching your payment collection method.
GoCardless automates the invoice payment collection process using ‘pull payments’, collecting payments directly from your customers on the due dates you set. This eliminates late payments, reducing the time your team would otherwise spend on financial admin, enabling them to dedicate resources to other tasks.
Reducing human error
Automated billing software also significantly curtails the chances of human error—a common occurrence even among the most meticulous accounting teams. This benefit translates into more efficient and accurate bookkeeping practices, freeing your staff to focus on more critical tasks. Additionally, reducing errors fosters higher customer satisfaction, enhancing customer retention.
24/7 operations
Unlike humans, the software doesn’t require breaks or adhere to fixed working hours. Automated billing systems perform round the clock, irrespective of staff availability. This continual operation increases productivity as team members can concentrate on other tasks, with resources previously dedicated to manual billing being repurposed.
Operating beyond standard business hours has become a crucial competitive advantage in today's ever-evolving business landscape. Deploying the right billing software is a strategic move that ensures your startup remains at the forefront of your industry.
How to collect Direct Debit payments with GoCardless
1.
Create your free GoCardless account, access your user-friendly payments dashboard & connect your accounting software (if you use one).
2.
Easily set up & schedule Direct Debit payments via payment pages on your website checkout or secure payment links.
3.
From now on you'll get paid on time, every time, as GoCardless automatically collects payment on the scheduled date. Simple.
Key takeaways
Boost in productivity: Automated billing streamlines invoicing and manages recurring payments efficiently, freeing up staff to focus on higher-value tasks, thus improving overall business productivity.
Simplifies operations: GoCardless automated billing tackles the big issues of the payment collection process, significantly reducing instances of late and failed payments.
Reduction in errors: Using automated billing minimises human error in invoicing and payment collection, enhancing bookkeeping efficiency and fostering higher customer satisfaction.
24/7 workflow: Automated systems operate beyond standard business hours, increasing productivity by allowing staff to concentrate on other tasks and providing a competitive advantage in the business landscape.
Get paid on time with GoCardless. Take control: stop chasing late payments and save yourself time, money and stress.
Case study
Spot On, a tech-based insurance start-up specialising in affordable pet insurance, uses GoCardless to handle customer payments and streamline customer service queries. Leveraging GoCardless' robust API, Spot On has developed event-driven, automated processes that allow customers to self-serve common payment queries.
GoCardless has been crucial in improving Spot On's productivity and enhancing customer experience, allowing the company to automate a significant portion of customer payment queries, reducing overheads and facilitating cost-saving benefits to customers. Christian van der Westhuizen, a co-founder of Spot On, points out:
"If that volume of tickets didn't require any human touch, then the extra discount we could pass on to customers would be massive"
Furthermore, GoCardless has also contributed to accelerating Spot On's growth. The platform's ability to handle bank reconciliation efficiently means Spot On can operate with a lean finance team, a significant advantage for a rapidly expanding business. Gerhard van der Westhuizen, co-founder, notes:
"Cash reconciliation is normally a big process, but GoCardless makes it a non-event"
Gerhard points out that the company also enjoys a high conversion rate due to the seamless user experience GoCardless provides.
"GoCardless isn't adding any friction to our experience. In fact, it helps us substantially outperform industry conversion rate benchmarks."
Automate your payment collection with GoCardless to reduce transaction fees, eliminate failed payments & save time on financial admin.
We can help
Setting up automated billing for your clients is very efficient with tools like GoCardless. By automating the payment collection process, GoCardless drastically cuts down the administrative responsibilities of managing and tracking invoices for your team.
GoCardless makes it quick and easy to get started, and with no contracts or long-term commitment required, there’s no risk. You can set up instant, one-off, or recurring payments in the merchant dashboard in just a few clicks, and GoCardless automatically creates and sends all the necessary forms, doing all the heavy lifting for you. You can also connect to GoCardless via over 350 partner apps, such as Xero and Quickbooks.
Discover how GoCardless can automate billing, making it easier for you to concentrate on what matters most - your business growth.
Take control of invoice payment collection with GoCardless. Eliminate late payments. Reduce time spent on admin. Get paid on time, every time.
Frequently asked questions
What are the advantages of an automatic billing system?
As a vital component of modern businesses, an automatic billing system provides significant advantages, such as improving cash flow, saving time, reducing administrative costs, and enhancing customer experience. By automating the billing process, companies ensure timely, consistent invoicing, enhancing cash flow reliability. It dramatically saves time that would otherwise be spent on manual billing, freeing staff to focus on more strategic tasks.
The automation minimizes administrative expenses, eliminating the need for paper-based processes and reducing errors. Lastly, by offering convenient, on-time billing and multiple payment options, customer satisfaction is significantly enhanced, promoting customer retention. This streamlined operation can notably boost a company's productivity and profitability.
What are the goals of automated billing?
Automated billing aims to streamline the invoicing and payment process, significantly reducing manual efforts and potential errors. Its primary goals are to increase operational efficiency, improve accuracy, enhance customer satisfaction, and ensure timely revenue collection. By automating billing, companies can eliminate the tedious task of manually generating, sending, and tracking invoices, freeing up resources for more strategic tasks.
Furthermore, automated systems provide real-time updates and insights into the payment process, making monitoring cash flow, managing delinquencies, and adhering to compliance requirements easier. Automatic billing is a strategic approach to financial management, driving productivity and profitability in business operations.
Why is the billing process important?
The billing process is a critical cog in the overall financial machinery of a business, acting as the linchpin for cash flow and revenue recognition. It establishes the transaction framework, transforming rendered services or sold goods into quantifiable financial units. An effective billing system bolsters customer relationships by ensuring transparency, fostering trust, and enhancing customer retention rates.
Additionally, it improves productivity by automating repetitive tasks, reducing human errors, and accelerating payment cycles. Crucially, by providing precise financial data, the billing process aids in strategic decision-making, forecasting, and budgeting, thus driving sustainable business growth.
