Why and How Your Small Company Should Automate Billing

You may cut down on the amount of time you spend on customer billing using automated billing. For advice on how to build up a successful automatic billing system, consult The Ascent.

Finding strategies to improve the efficiency of your small business is the focus of The Ascent. We're all in favor of introducing some tiny robot companions into the busy lives of small business owners, whether it be through marketing automation or using AI in accounting.

You probably have a list of things you should do but would prefer not to do, including billing. Let us introduce you to another diminutive robot that can help you with some of your deskwork.

What is automated billing, in general?

A software program that bills or charges customers largely automatically is known as an automated billing system. The approach functions particularly well in companies that use a subscription or retainer model to bill consumers a regular sum each month.

For $25 a month, for instance, a tiny wine shop nearby offers a service where three well selected bottles of wine are packaged. They wouldn't have to worry about manually processing the recurring transaction if they adopted an automated billing system. Instead, their billing program would handle it and would only alert them if my card expired or was repeatedly denied.

Even if they don't bill customers and patients the same amount, consulting, legal, and medical firms can still profit from having an automated billing system.

Automatic billing systems work by either automatically charging customers' on-file payment methods or billing consumers and taking payment.

As standalone software solutions, as part of invoicing software, or integrated with accounting software, you can discover automated billing. The requirements of your business and the functionality offered by your present software line-up will determine how you opt to set up an automated billing system.

Three advantages of implementing an automated billing system

Automatic billing can speed up the flow of cash into your company while relieving you of a taxing task.

1. More prompt bill-paying

One reason why the subscription model has become so well-liked is that it guarantees a consistent flow of income. Yet, timely billing is crucial to the process since inconsistent revenue collection results from inconsistent consumer billing.

Unlike you, a small business owner, automated billing software doesn't have to juggle many tasks. Your clients will receive timely bills via automated billing systems.

2. Savings of time

Sending out business invoices can take hours, especially if you have a paper billing system. The hours you spent printing bills, folding them, inserting them into envelopes, and applying stamps are time you'd probably like back.

Automatic billing processes typically use digital technology. In addition to assisting your company in going paperless, they also free up the last Sunday of each month that you set out for billing.

A "dunning" feature that retries declined cards and alerts clients to an expired or rejected payment method, urging them to change it, is also a common feature of automated billing software. You would be forced to gather accurate payment information without the automation.

3. Error minimization

Clerical errors in manually billing consumers are inevitable. By correctly setting up an automated billing system, you can prevent human error. Reduced human involvement reduces billing errors, which can greatly irritate clients.

How to implement a successful automated billing system for your company

After it is set up, the perfect automated billing system requires little to no maintenance. How to choose and set up a new automatic billing system is shown here.

1. Examine billing software tailored to specific industries.

The same automatic billing software that flower shops use cannot be used by medical offices. Make sure you select an automated billing solution that can accommodate any factors you may need to take into account throughout the billing process, such as insurance payments.

2. Assure compatibility with current accounting software

If it isn't already built in, make sure your automated billing system integrates with your accounting program.

Let's say your company employs accrual accounting. As bills are sent out, the billing system should instantly update your books with new journal entries that reflect revenue and accounts receivable. Businesses that operate on a cash basis only report revenue when customers pay.

By putting in place a billing system that isn't compatible with your accounting program, you're just shifting the burden of bookkeeping from your current billing responsibility.

3. Move client payment information

Once you've determined which billing program best suits your company's requirements, start to work transferring your clients' payment data to the new platform.

A seamless migration of client data should be a component of the accounting software integration.

4. Establish a client payment portal.

Almost all automated billing systems provide a customer-facing online portal where clients may download invoices, change their payment method, and make online payments.

Include your company name and brand on the payment gateway so that clients will know they are visiting the right website to pay their bills.

5. Make invoices unique

If you use billing software to make periodic invoices, personalize them by include your business name, logo, information for automated payments, and contact details. If you move billing systems, you don't want your consumers to be confused about who they're paying.

6. Consistently review transactions

You know not to leave everything up to robots if you've seen the movie I, Robot. Check the accuracy of your billing system on a regular basis. By selecting at least 10% of your monthly transactions at random, you can ensure its correctness. After that, make sure they accurately reflect how much each client owes.

A few pointers for utilizing an automatic billing system.

Here are some suggestions for easing the switch to a new billing system.

1. Inform your clients in advance

You don't want clients to believe that a newly designed invoice is a scammer's most recent attempt to defraud them out of hundreds of dollars because phishing scams inundate many of our inboxes.

Send a special email to your customers or include a message on the last invoice before the move to let them know you're switching to a new billing system.

2. Take the payment terms into account.

A fantastic moment to change your payment terms is when you're setting up a new billing system.

Consider a scenario in which your company sent invoices to consumers with a net 30-day payment term via the mail prior to installing an automated billing system. Due to the complete absence of paper in your new system, consumers receive their bills immediately after being invoiced, and they can make payments online. It makes sense to shorten your payment periods for the convenience of doing so.

3. Examine different payment options

Many automated billing software programs offer online payment gateways that let clients pay bills online with a variety of payment options, including electronic checks and popular credit cards. Making it simpler for clients to pay you is a fantastic idea right now if your company only accepts checks that must be mailed in.

Afterwards, I won't charge you.

Everyone enjoys receiving payment, but not everyone like spending countless hours billing clients and managing the associated books. With automated billing, small businesses can benefit from billing clients right away rather than delaying payments and doing another onerous activity on top of it.

Work 365 is an automated billing software and subscription billing solutions for Microsoft partners