Helping Your Customers to Make Payments Using Automated Billing

It can be difficult enough receiving payments from customers at the best of times, but any company that gives people an excuse not to pay is only asking for trouble. That’s why it’s so important to get billing 100% accurate and timely.

There are two main types of billing, either one-off invoices for a product or service – or recurring billing, which is more akin to a subscription. But there’s no reason why the process for issuing invoices for single transactions or repeat business should not be automated. There are many advantages to automated billing, not least the saved admin time, but also the accuracy and clarity of billing history when an automated platform can also create customer statements at the push of a button.

Many CRM (customer relationship management) platforms, for example Salesforce, have the facility for repeat and automated billing as a matter of course. But even small companies can use cheaper and less complicated billing software, from freelancers billing for their time to e-commerce sites selling craft items or clothing.

So, what should a company look for in billing software, as a very minimum?

Assess your billing software needs

Software support should always be available from the vendor, who should respond to support tickets within 24 hours of a problem at the very longest. Obviously, downtime of billing software causes delays in payment, so time in that case is most definitely money!

Some billing platforms use APIs (application programming interfaces) to integrate into other software, like perhaps Google Calendar or i-Cal, so that the person issuing invoices only has to note the monetary amount of the invoice and customer ID into a date field and the billing software does the rest.

Chasing overdue payments is extremely important and this doesn’t have to be done manually. In the subscription-based service industries, the practice is known as ‘dunning’.

A good, automated billing platform will anticipate payment due dates from invoices already issued, and if remittance hasn’t been forthcoming then the software will email and / or SMS the customer with a reminder. The operator should be able to set the length of time after overdue payments are missed before a reminder is issued. If the payment still hasn’t been made after a second reminder, the system should alert the operator to chase payment by post or voice telephone call. Slow payers might not be incentivised to remit any sooner with automated reminders, but at least it reduces the admin time and partially mitigates any further losses in saved associated costs. The main point is, you need to make sure that your dunning gets properly done!

Processing payments is another facility which automated billing systems can handle. On issuing an invoice, the software should offer payment by, perhaps, PayPal, Credit Card directly (if the invoice issuer has merchant status) or simple bank transfer – by sending details of the account to be credited. In the case of paying by PayPal, obviously the business owner will already have set up that integration.

When bills are recurring, and of an identical amount each period, (usually monthly) perhaps for a software licence or magazine subscription – the automated billing platform should only have to be set up once at the initial forming of the contract between service provider and customer. After that, a human operator should never have to interact with that customer except in the case of seriously late payment or perhaps if the customer wants to cancel for any reason.

Get the smart look

But even for non-recurring payments, if a customer’s details are fed into the system, it should only be necessary to fill in name, address, phone number and email, together with the product or service provided and the price. The invoice should then be created by the platform in a pre-prepared template and emailed to the customer; the professional branding and appearance of any sent out documents also enhances the perception of any company’s professionalism. The automated system will then handle reminders and perhaps even subsequent marketing messages asking for repeat business.

Obviously if a large e-commerce company is billing thousands of customers per week, there’s no doubt that a good CRM system with an integrated automatic billing platform is a necessity.  A small business proprietor might ask theirself if all the effort and time of the setup process is worthwhile. But if that setup only has to be done once, and the result is that it halves the time spent on billing and chasing customers, it’s an obvious no-brainer.

When time really is money

Imagine a sole trader, maybe a plumber, who might create only four invoices per week. On return home after a day’s manual labour, he sits down at his laptop and fills in the invoice template he might have already created with a spreadsheet package like Microsoft Excel. He then either prints the document and posts it to the customer, or emails it. Then, if payment isn’t forthcoming within seven days, he has to go onto his online banking app, check that payment definitely hasn’t come through and politely chase the customer over the phone or maybe by text. If that process averages one hour per invoice, that’s four hours per week.

Assuming that the plumber works 48 weeks per year on average, that effort represents 192 hours per year. If his normal hourly rate is around, say £40 per hour, that’s either £7680.00 he could have earned fixing leaks or 192 hours he could have spent in the pub with his mates or relaxing with the family.

If an automated billing platform even halves the effort of producing invoices and chasing payments, that’s around 100 hours, or £4000.00 saved for our hard-working plumber. If the cost of the billing software licence comes in at even, perhaps, £50 per month, that’s spending £600 to save £4k. If you do those sort of sums, you’d wonder how you ever managed without automated billing in the first place.