Advantages Of Offering Recurring Invoicing
If you’re a freelancer with multiple clients then you already know how exhausting it can be when it’s time to start working on your invoices – especially when when you have long-term and frequent clients.
In most cases, you spend a lot of time manually entering the same information over and over again. Worst of all, even after you’ve created and sent the invoice to a client there’s no guarantee that they’re going to pay the bill on-time.
Thankfully, there are now a wide-range of cloud-based invoicing solutions that allow you to offer recurring invoicing to your clients.
Recurring invoicing is when invoices are automatically created and sent to your client on a regular, pre-defined basis. This means that when you have recurring clients you only have to set-up the invoicing procedure, such as the client name, invoice frequency, amount, and payment method, once.
After that, your invoicing essentially goes on autopilot so that you can enjoy the following advantages:
Offering Recurring Invoicing Improves Client Relationships
Without taking a proper survey, I can still be 100% certain that no freelancer likes to have that awkward conversation about money with their client – particularly when a payment is past due.
Recurring invoicing not only eliminates these types of conversations, they also can improve the relationship that you have with your clients by:
- Eliminating any late or penalty fees for past due invoices.
- Making how they pay you for your services more convenient. Instead of logging into their accounts, they can just set-it and forget-it so that they can focus on other tasks and responsibilities.
- Gives your clients the option to break-up larger payments into smaller, more manageable payments.
If you can keep your clients happy, you’re well on your way to building long-term relationships and attract new clients through word-of-mouth referrals.
Creates a Predictable Cash Flow
You never know when the unexpected can occur. You can, however, at least increase your cash flow by offering recurring invoicing. Like any other recurring payment, recurring invoicing lets you know in advance how much money is coming into your business on a monthly, quarterly, or yearly basis.
With this knowledge and having a guaranteed cash flow, you can make business decisions that are actionable, achievable, justified, and profitable.
Fewer Late or Missed Payments
Tracking down late payments is never fun. In fact, it’s frustrating, time consuming, can do some serious damage to your cash flow. Even worse? The longer that an invoice remains in the past due pile, the more likely it never will be paid.
Recurring invoicing takes care of this headache since the amount due is automatically withdrawn from the client’s bank account or credit card on the same date each month, quarter, or year.
Eliminates Hidden Costs and Saves You Time
On average, it costs $12.90 to process a single invoice. That may sound excessive, but think about the time and money that are involved with paying someone to create the invoice, along with having to purchase paper, ink, envelopes, and stamps.
Automation is capable of reducing invoice processing costs by 29%. This comes out to around $300,000 in savings per year for an organization.
It’s been estimated that digital invoicing is four times more environmentally friendly than paper billing. In fact, you can reduce your carbon footprint by using electronic invoicing.
For example, if your business receives 1,000 supplier paper-invoices annually you could save 250 trees by switching to electronic invoices. You can also reduce the emission of greenhouse gases. Since you aren’t transporting invoices through the mail or using electricity to create multiple invoices each billing cycle.
Keeps Payment Information Secure
Finally, recurring invoicing is extremely secure. For starters, invoicing platforms that provide recurring invoicing must be PCI compliant. Furthermore, recurring invoicing reduces any duplication and circulation of sensitive client information. It also will help resolve other types of employee errors.
The Bottom Line
When you offer recurring invoicing you’re making life easier for both you and your clients. It saves every party involved time, money, and the awkwardness of asking for late payment. This can salvage the relationship that you have with the client.
Recurring invoicing is also secure, good for the environment, reducing paper clutter, and can improve your cash flow.