As a small business owner, you face the possibility of running into financial difficulties even if you turn a profit month after month.
In many cases, the financial difficulties are caused by poor cash flow… which is often caused by late payments.
Building and maintaining a first-rate billing system is one of the easiest ways to improve your cash flow.
In this article, you’ll learn:
- What automated billing is
- How to know if you need automated billing
- Benefits of automated billing
- Automated billing options
- How to get started with automated billing
What is Automated Billing?
Automated billing is the process of using a system to automate the billing of customers, eliminating the manual tasks involved in traditional billing solutions.
Any automated billing system worth its salt is able to create and send invoices to customers, but the best systems go above and beyond – allowing small business owners to accept payments the way they want to.
How Do You Know if You Need Automated Billing?
Here are a few questions to help determine whether or not you need an automated billing solution:
- Are you spending a lot of time billing customers? How would the cost of an automated billing system compare to the potential time savings (since your employees’ time is money for your business)? Here are a few simple time-tracking methods in case you aren’t already tracking time in your organization.
- Do you routinely deal with late invoices from customers? Nearly half of US businesses’ invoices aren’t paid on time.
- Do you make a lot of errors on your invoices?
The vast majority of businesses would benefit from automated billing. But if you sell a low volume – say, a few dozen per year – of big-ticket items, you may want to prioritize other things for your business.
Benefits of Automated Billing
An automated billing system can bring several benefits to your small business, including:
- Reduce mistakes: with an automated billing solution, human error is no longer an issue when billing customers. Undercharging customers, forgetting to send invoices, and sending invoices too late are a few common issues with traditional billing.
- Save time for your staff: an automated billing system takes work off of your employees’ plates, allowing them to focus on higher-value tasks that really move the needle for your business – instead of doing manual, repetitive tasks that can be handled by software.
- Eliminate compliance headaches: if you build or buy a first-rate billing solution, you won’t have to spend a lot of time worrying about compliance.
Automated Billing Options
You can either build your own automated billing system or use a third-party automated billing system. Let’s look at what impacts which one is best for your small business.
Build Your Own Automated Billing System
If you build your own system, you can build something that precisely fits your needs. But there are third-party solutions, such as Gravity Payments’, that are highly customizable. So, unless you have extremely specific requirements, you can probably find something on the market that works for your small business.
A more likely – but still relatively uncommon – issue is an inability to find a solution that integrates with your existing tech stack. If you’re looking at third-party solutions, ask prospective external providers about integrations.
Here are a couple of common problems with building your own solution:
- You may have to spend a lot of your time – or your employees’ time – building and maintaining the solution… and that’s assuming you or your employees have the expertise to build and maintain a solution.
- You won’t have help with compliance. With a constantly evolving regulatory environment, staying up to date on compliance can be time-consuming.
Use a Third-Party Automated Billing System
With a third-party automated billing system, there are limits to what’s possible with customization. But in practice, most small business owners have no problem finding a solution that fits their requirements. Just make sure to provide potential vendors with a list of your needs, and see which one can satisfy them.
There is a lot of upside if you use a top-notch third-party automated billing system. Instead of venturing outside of your core competencies, you can leave billing to experts and focus on what you do best. In many cases, you save time and money and you get a better solution.
How to Get Started with Automated Billing
By now, you probably have a good sense of whether or not an automated billing solution would be beneficial for your small business. Again, unless you handle an extremely low volume of payments, you would likely benefit from an automated billing system.
So, the next step is to make a list of what features you need in a system, and reach out to prospective vendors. Consider the following questions:
- Is your product/service billed with one-time payments or recurring payments?
- Where are your customers located? Can the solution effectively bill customers in those locations and comply with local/national regulations?
- Does the automated billing system integrate with your existing tech stack? Yes, we brought up this concern earlier, but it’s important enough to warrant another mention. A big benefit of an automated billing system is time savings. If it doesn’t “play nice” with the rest of your tech stack, you’re going to have to spend time using manual workarounds.
- How do your customers prefer to pay for your product/service? Does the automated billing system accommodate these preferences?
In addition, you should consider any industry-specific needs and make those clear to prospective vendors.
If you find a solution that can accommodate your small business, you are likely best off using a third-party solution due to the resources required to build your own solution. But in the unlikely event that you can’t find this solution, you should explore what it would take to build your own solution.
Accept Payments in a Fully Customizable Way with Gravity Payments
At Gravity Payments, we know that automated billing is not a one-size-fits-all solution.
We have experience helping small business owners in a variety of sectors – including retail stores, veterinary practices, bridal shops, and many more – build and maintain an automated solution that works best for their business and their customer base.
Customers can manage their payment schedule, method, and type through a customer portal. And we provide an internal support console that makes it easy for your team to view and manage customer information and billing accounts.
Learn more about how Gravity can help you build the best payment portal solution for your business.