Tired of invoicing your customers manually? You’re not the only one. There comes a time in every business owner’s journey where tabulating monthly bills simply becomes a time suck. The answer to your problem may be easier than you think! With an automated billing system (ABS), you’ll become more efficient, eliminate billing errors, and have better payment tracking at your disposal. Let’s take a look at what an automated billing system can do for your business.
Automated Billing 101
An automated billing system sends out invoices to your clients on a regular interval so you don’t have to manually populate and send them. In other terms, it streamlines your revenue management. Who really needs ABS billing? Most large businesses (think your credit card company or insurance provider) were early adopters of automatic billing. When you have thousands of customers, automated billing slashes your accounts receivable costs. On the contrary, many small businesses believe they can manage manual billing just fine, and an ABS seems unnecessary. However, there is more to the story.
Go paperless in your payment process
Even a streamlined invoicing process is not as efficient as automated billing. As people switch to digital payments across the board (the use of paper checks fell 50% between 2000 and 2012) paper bills are becoming a thing of the past. In fact, more than 56% of Millennials pay their bills online and many prefer automated channels. If you can generate a paperless bill, why not automate the process?
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Key Benefits of Using an ABS
Automated billing services could be a lifesaving addition to your growing business. Invoicing five or six clients every month is manageable, but at some point billing will likely get away from you. At the very least, you’re probably working late nights at the end of the month when you don’t have to. Here are some of the ways an ABS can keep your accounts receivable process from making you cross-eyed.
More efficient process. An automated process means no more plotting out individual invoices or organizing a client’s monthly charges on the 30th. Tracking your client’s charges online and sending an automated bill saves more hours than you’ll be able to count.
Faster payments. When a client receives their invoice like clockwork, payment becomes a habit. When you send an email with a click-to-pay option, you may soon find that you’re spending fewer resources contacting customers to remind them about their invoice. If cash flow is an issue, faster payments could be the solution.
Automated follow-up. Many ABS software options also automate invoice follow-up. That means even when a customer does fall behind on payment, they will receive an automatic reminder without so you don’t have to worry.
Accurate payment tracking. Which customer accounts are up-to-date? With an ABS you can easily access payment records and see the history of a client’s account. Searching for an invoice in your files or on a computer requires time and effort you could be putting elsewhere.
Fewer payment errors. Tracking due invoices automatically and receiving online payments can also reduce errors. You’re only human. You can make an accounting error on a manual invoice that an ABS would have caught and corrected.
Is an Automatic Billing Service Right for Your Business?
When you start to rethink your accounts receivable, you’ll have some questions. How do I choose an automated billing system? How much money will I really save? To decide if automated billing is really right for your business, consider the following.
Calculate the current hours spent on billing. How much time do you and/or your staff currently spend on invoicing? Calculate the salary expenses currently associated with this work at your company. For instance, if your accountant earning $30/hour spends 25 hours monthly on invoicing, your annual cost is $9,000.
Consider how many hours you’ll save. Now, let’s look at the bright side. Consider how many hours your accountant can save when she has ABS on her side. Let’s say she cuts her time invoicing down to 10 hours per month. That’s an annual savings of $5,400 in raw figures.
Factor in the cost of using an ABS. Of course, your automated billing system will have its own expenses. Some automated billing services start at just $100/month. Let’s say you spend $200/month. With $5,400 in salary savings and $2,400 in ABS costs, you could still save $3,000 per year by switching to automated billing.
Think about relocating resources. How will you use the freed-up time? This is how you maximize savings. If your accountant doesn’t make use of her newly available time, you could end up losing money rather than saving it. Find ways for your in-house staff to take over duties you previously outsourced or create ideas for new revenue streams.
Do your research
Finding an invoicing system that works for you in half the battle, and making sure you implement it will bring you home. Thanks to the ease of use for most automated billing systems, you can begin to free up time and money almost immediately. Your customers may even thank you. That’s a win-win.
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