A hallmark of the most successful online businesses often lies in scaling their MRR (Monthly Recurring Revenue), and having an automated billing system is paramount to ensure a business’s MRR is always growing.
Let me give you an estimation-
The McKinsey report stated that 66% of the businesses have automated at least one business component in 2020, up from 57% in the previous year. And the billing system is one of such business components.
An automated or recurring billing system has unlimited advantages–
- Saves time and money
- No computing or invoicing errors
- Can handle the billing for a large customer base with great efficiency
- No missed payments
- Offers more variety in subscription models
- Supports globalization of your business by providing multi payment options, multi-currencies, multi-languages etc.
- Optimum security for the payment data and other confidential customer data
And the list goes on.
Now, can you imagine getting all these facilities without billing automation? Simply, no! But first, let me introduce you to the automated billing system.
What is Billing Automation?
It’s been a while since automation has taken over diverse industries globally. As a result, billing automation also came to the picture for small to the leading businesses in order to provide faster, accurate, and advanced billing solutions to the end-users.
As the name suggests, billing automation is the process of automating the billing cycles and all the related activities for your customers. It includes billing your customers in a timely manner, handling various subscription models, coupons, discounts etc.
While the main purpose of an automated billing system is automatically billing and generating invoices for your customers, the rest of its features may vary depending on the system you are choosing.
If you haven’t automated your billing yet, you must have a lot of questions regarding how to start and set it up for your business!
And here we will walk you through the steps to set up automated billing for your business.
Guide to Set Up Automatic Payments for Your Business
1. Know your Billing Model
There are different types of billing models based on the billing frequency, subscription type, business type etc.
What are the Types of Billing?
Some of the billing types are-
- Postpaid Billing- The customers get billed monthly on the basis of services or products purchased or taken during a month. Telecom operators often provide this billing facility.
- Recurring or Subscription-based Billing- The product or service providers charge the customers automatically on specific time intervals (monthly, quarterly, annually etc.). This billing type is the most popular one among the online businesses such as OTT channels, e-commerce stores, gaming apps, news or job portals, and others.
- One-time Transaction or Order-based Billing- The customers get charged based on their purchases. For instance, while we do shopping on any online store, we get billed for only the items we purchase.
- Pre-paid Billing- This billing model is mostly popular among the telecom operators. Here the customers get charged from their available prepaid balances.
There are also different types of recurring payments such as-
- Pre-approval Transactions– The customers approve a specific amount to be charged from their credit cards regularly.
- Fixed-amount Recurring Payments– A fixed amount gets charged automatically at the fixed time intervals. Most of the leading online businesses like Netflix, LinkedIn, Amazon Prime etc. prefer this type of payment.
- Variable-amount Automatic Payments- Different amounts get charged based on the services or products purchased by the customers. Small businesses and freelancers often opt for this billing model.
Your business can have one or even more than one type of billing model. And it is important to have a clear understanding of it from the very beginning.
2. Research Well
There are plenty of payment service providers in the market. And you need proper research to pick out the one which fulfils your business requirements and fits your budget. You need to keep in your mind a few points, such as-
- What transaction fees are they charging?
- How well can it accommodate the billing requirements?
- What’s the security level?
- Will it integrate well with the existing systems?
Stripe, Square, PayPal etc. are some of such payment service providers. If you want a hassle-free billing solution, you can just adopt a good automated billing system equipped with your required payment gateways.
Also Read: 5 Reasons to Choose Muvi Billing for Your Online Business
3. Ensure the Security
Security is pivotal for any billing system be it automated or manual. It should ensure-
- Your customers’ data will be safe
- Their payment details and other sensitive information will be fully secure
- Proper security measurements are there to detect and prevent any possibility of data breach or online payment fraud
Only go for the automatic payment merchants offering high level security and proper encryption to handle the confidential information of your end-users.
4. Set Multiple Payment Options
Your customers have different payment preferences- some may like to use credit cards, while some prefer to use NetBanking or other payment options. Always keep multiple payment options as well as multiple payment gateways for your customers. Furthermore, make sure it supports multiple currencies and lets you add the new options, especially, if globalizing the business is on your cards.
5. Configure Taxes
Let’s not forget that tax plays a vital role in billing your end-users. And as it varies across the globe, it’s a good practice to configure the tax structure as per the regions your business operates in.
6. Check the Flexibility
An automated billing system must be flexible enough for your internal business as well as the end-users. For instance, if you want to add a new language for generating invoices, it should support it. Similarly, a customer wanting to downgrade or upgrade his subscription, should be able to do it swiftly.
7. Look for Smooth Integration
Your business must have different existing systems or softwares. And your billing system should integrate well with your whole online platform including the existing systems.
Setting up automated billing in the start-up phase of your business is a good idea. Because such billing systems will support scaling your business up without making the billing process tiresome for you.
Muvi Billing offers you a holistic ‘business-first’ automated billing support system which manages complex billing cycles, tax-compliant billing, recurring revenue streams, and many more! Its exclusive feature-packed solutions include 40+ payment gateways, smart record keeping, and carrier grade security.
Take a 14-day free trial to have a seamless billing experience with Muvi Billing (No credit card required)!