The capacity to successfully collect recurring payments may make or destroy your company. So, in order to maintain your cash flow stable and your business finances in good shape, it’s critical to be cautious and follow proper procedures while collecting recurring payments.
The way you process recurring payments, the policies you create around them, how you handle payment denials, how you engage with consumers, and how you manage churn—all of these factors influence the long-term viability of your subscription business.
We’ll go through some best practices for collecting recurring payments in this article. These tips can help you keep your subscription company afloat and avoid problems with recurring payments.
Make your billing approach more efficient
Surprisingly, one of the most prevalent reasons for a transaction’s rejection is a lack of cash. However, there are steps you can click here and follow that may help to reduce the likelihood of transactions being refused for this reason.
Adjusting your invoicing schedule to maximize the likelihood that your clients have cash accessible is a good idea. For example, in western countries, people are normally paid at the end of the month, but people in emerging countries are paid at least twice a month. It is therefore desirable to align your billing cycles with such regional payday periods in order to maximize authorization rates.
It’s recommended to retry the transaction if it was rejected due to technical problems. You should wait at least an hour and no more than three or four days before retrying for the highest possibility of success.
Customers should be able to select their desired billing frequency and day
This is one of the most effective methods for ensuring that your clients have a sufficient amount when payment time approaches. When you accept payments by bank debit, you may provide your clients with the option of paying on a monthly, quarterly, or annual basis, and on the day that is most convenient for them.
Get to know the payment cycles in your area
If monthly billing fails due to a lack of finances, it’s a good idea to look at local or regional payment cycles and bill clients as soon as possible. You may even automate the entire process using bank debit, enabling your clients to pick their preferred payment schedule.
Ensures that card information is up to date
Another typical reason for payment denials is out-of-date card information. Customers’ card information may change for a variety of reasons, from replacing lost or stolen cards to adopting new technology. Transactions are rejected when you fail to update card information in your database.
Fortunately, credit card issuers have devised a practical solution to this problem in the form of an automated account updater. This assists retailers in retaining consumers by ensuring payment continuity and eliminating payment rejection due to erroneous or outdated card information.
Automate your subscription billing and recurring payments
It’s time to start thinking about what option is best for you once you’ve realized you need to adjust the way you manage regular payments. This entails doing an assessment of your billing and collection needs and selecting an appropriate solution.
You require a solution that can revamp both your current business model and how you intend it to evolve in the future. For this, you should get a good payment service provider.
It might be exhausting to monitor your account on a regular basis and adhere to all of these recommended practices in order to keep your business’s recurring payments running properly.
These best practices are particularly critical in a subscription business, because memberships must be renewed on a regular basis through recurring payments, and where more transactions may result in more payment failures. As a result, your billing software must be able to accept a variety of secure payment methods while also managing customer and revenue churn as a result of refused payments.