Running a business comes with its challenges. Dealing with unhappy customers is one thing, but chasing late or missing payments can be especially frustrating. Imagine a private school waiting for tuition, a contractor needing payment, or a gym struggling to collect membership fees. All business owners rely on consistent income to survive. When payments are late, cash flow suffers, and the business’s future is at risk.
There are two main ways to handle this problem. The traditional approach involves collections, either done internally or through an agency. Doing it yourself means sending repeated invoices, making collection calls, and tracking payments, which takes time and money. Hiring an agency can be costly too, as they often take a significant percentage of what’s owed.
A better solution is to be proactive and automate your payment process. Instead of sending reminders, set up a system where customer accounts are automatically debited on the due date. When a customer signs up for your product or service, they authorize these automatic payments, choosing to pay with a check or credit card.
For check payments, you can use software to create paper drafts, which you then deposit. Alternatively, a web-based virtual terminal allows you to enter customer information directly. This data is processed through the Automated Clearing House (ACH) system, typically taking a few days to complete the transfer. Some systems even retry NSF checks automatically, saving you the hassle of manual collection.
Recurring credit card payments can also be managed through a virtual terminal. These terminals should allow you to easily update customer information and provide a complete transaction history.
Automated payment systems offer numerous benefits: consistent cash flow, reduced expenses, faster payments, and a simplified billing process. As Andy Grove, former CEO of Intel, noted, automated payment is the future. Every business owner should embrace this shift.