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Success in business relies on having the right systems and automated processes in place as you grow. The right systems and automation can significantly free up the time you have available to work on your business, rather than in it. That’s particularly true for billing and payments: the repetitive work that’s crucial to your bottom line.
If you currently bill clients for work via invoices, you may already be familiar with the recurring invoices feature. If not, read on to discover how it works and why you might consider adopting this in your own business. Square offers its own invoicing tool – Square Invoices – that integrates with your payments and helps you get paid from anywhere.
What are recurring invoices?
An invoice is a commercial document sent from seller to buyer in order to collect a payment. It’s generally itemised and dated, so both parties can clearly see the services, the amount and the due date. Recurring invoices are simply invoices that recur (repeat) on a consistent basis.
There are no set rules around how many invoices a set of recurring invoices must include, or the amount required. The billing frequency of a recurring invoice is also customisable and might depend on whether a client receives the same service weekly, monthly or quarterly. Below we’ll explore some of the reasons to consider setting up recurring invoicing for your clients.
What types of businesses use recurring invoices and why?
Invoicing and recurring invoicing is the billing and payment method of choice for a wide variety of business types and sectors in Australia. They are the standard for any business that’s primarily a service provider taking card-not-present payments – including professional services businesses, trades and repair specialists, consultants and even creative professionals.
Think about the landscape gardener who’s contracted to maintain the grounds of an apartment complex every fortnight. The recurring invoices feature can save that gardener a lot of effort in setting up individual invoices to cover each billing period. The same goes for the bookkeeping firm with retainer clients: they can bill for their regular bookkeeping services which is both easy for them, and for their busy clients.
Of course, many of these businesses now choose to accept a broad range of payment methods (both in-person and online) which includes invoicing.
Recurring invoicing is particularly useful for service businesses that provide repeat services or have retainer client arrangements. The automated aspect of recurring invoicing is helpful for streamlining the billing process and providing a clean and transparent payment experience for the client.
Some benefits of recurring invoices
Time saving and efficiency
With recurring invoices to streamline your business processes, you won’t need to chase down clients to pay you each time they avail of your services. With just one click on the program, you can send an invoice to the customer to remind them of their payment dues.
Square Invoices allows users to send professional invoices straight to their customers’ inboxes, where they can pay for services with a click of a button. It is faster for you and your customers.
A smoother client experience
Recurring invoices are good for your clients, too. Not only are there multiple payment options available for recurring invoices, they also offer a predictable schedule for your clients to manage their budget and outgoing costs effectively. As soon as the payment is due, your client can open their recurring invoice and have it paid in just a few clicks.
Faster payments
A recurring invoice minimises the risk of delays to your payment processing, or worse, a missed invoice. By automating a series of future payment requests, you’re saving time and resources in more ways than one. It’s possible to not only eliminate the time and manual effort required to create a standard invoice again, but also the time spent discussing or chasing up new invoices with clients. With recurring invoices, you may also prompt clients to automate payments on their side too, so you get paid faster and with no hassle.
Assured cash flow
By speeding up and securing the likelihood of streamlined invoice payments, you’re also encouraging healthy cash flow for your business. The ability to set your own recurring schedules means you can customise invoice payment due dates to fall on specific calendar days that are most advantageous to your cash flow planning. It’s a small automated tweak that could add up to a major boost to your financial operations.
For more cash flow solutions, consider learning about Square business loans
Getting back to business
Automating one aspect of your payments enables you to focus your efforts on other critical aspects of your business, such as marketing, sales, customer acquisition, and building relationships with existing clients.
How to create recurring invoices with Square step by step
Follow the steps below to create recurring invoices with the Square Invoices app:
- Open the Square Invoices app or navigate to Invoices on your Square Dashboard.
- From the menu, select Create Invoice.
- Then select Recurring.
- Choose the frequency preferred by your customer.
- If the customer selected the card-on-file option when they subscribed to Square Invoices, click Automatic Payments.
- Go to the Customer Directory and select the customer’s name. The system allows a maximum of nine items to enter.
- If the customer does not have a card on file, allow them to save their card on their own. Tick the box for the option “allow customers to save their card”.
- Complete the rest of the invoice, including details on discounts and tips if appropriate.
- Click schedule.
When your customers receive your invoices in their email, they can then pay it online. Card-on-file payments are charged automatically. Depending on your payment transfer preferences, you could have the funds in your bank account as soon as the next day, or instantly for a small fee.
This article is for informational purposes only and does not constitute professional advice. For specific advice applicable to your business, please contact a professional.
