Recurring Billing for Businesses

Posted 7 years ago in Small Business Tips
by Tim Chaves

Businesses that offer memberships or subscriptions need a reliable, convenient recurring billing system. You don’t want your staff wasting time entering card details every month to charge your customers. However, recurring billing is not as easy as taking customers’ card information and saving it on your computer.

Let’s take a look at how you can automate the billing process for maximum efficiency while maintaining cyber and financial security.

Recurring Billing Companies

While there are companies that specialize in recurring billing, it’s also offered by many credit card processing companies and accounting software programs like ZipBooks.

You can even combine multiple services. With ZipBooks, for example, you can enroll in ZipBooks Payments for seamless integration between invoicing, accounting, and accepting credit cards for payment.

Types of Recurring Billing

The most common type of recurring billing is a simple subscription or membership. When most people think of recurring billing, they think of businesses that offer monthly or yearly memberships. Examples include gyms, mail order “clubs,” like a coffee of the month or cheese of the month club, professional services like stock photo website memberships, or streaming TV services.

In these scenarios, the business offering goods or services wants a hassle-free way to charge customers each month, and customers don’t want to manually initiate payment every time their bill is due. That’s where automatic recurring billing comes in. The customers’ cards will be kept “on file” and charged at the appropriate time.

Recurring Billing

ZipBooks’ Solution: For automatic recurring billing, ZipBooks offers a system that allows you to auto-bill clients after the first invoice. Essentially, the first invoice sets up the auto-bill and gets permission to continue to bill your customer on a regular basis.

As you can see in this screenshot, the “auto-bill” toggle switch is on with billing set to occur monthly. You can specify a set number of bills or leave the field at “0” to bill indefinitely at the specified time.

Enabling credit card payments (as also shown in the screenshot above) provides your customer with a simple payment form. The client gets all the details of the bill in your invoice and has the option to enter basic card details and click “pay now” to pay their invoice at their convenience.

Recurring Invoices

Another type of recurring billing is recurring invoices. With recurring invoices, you can automatically send an invoice to customers at the defined times, but the customer isn’t automatically charged. Instead, they will initiate the payment on their end. Recurring invoices are helpful for businesses that bill regularly with changing amounts or projects. Design agencies, programming services, marketing/content firms, and freelancers can benefit from recurring invoice billing.

ZipBooks’ Solution: ZipBooks gives you the option to accept credit cards directly through the invoice (with ZipBooks Payments) or take payment outside of ZipBooks (such as by check) and mark the invoice paid. Additionally, you can use the built-in time tracker function to track work, and bill the client for extra work that fluctuates monthly. Enable credit cards payments for easier payment collection.

Benefits of Recurring Billing

Setting up a recurring billing system has many benefits for your business, including

  • Reduced time spent collecting payment
  • Improved cash flow
  • Streamlined payments
  • Reduced customer churn
  • PCI compliance

Any business that accepts credit cards must be PCI compliant, which means follow the proper procedures for storing credit card details safely to secure the personal information. Storing cards is the process of securely keeping information available for use in the future.

When you set up a recurring billing solution with a reputable company, you won’t be storing any card details yourself, helping ensure you’re compliant. However, you’ll still benefit from the ability to automatically charge customers, giving you the best of both worlds.

ZipBooks offers PCI compliant solutions for recurring billing so you can seamlessly handle your accounting, invoices, payments, and recurring billing within the same software for maximum efficiency.

About Tim

Tim is Founder and CEO of ZipBooks. He keeps his desk really nice and neat.

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