Over the last decade in business, I’ve seen a lot of companies not understand what recurring revenue actually is.
To many, recurring revenue is just having an automated billing software that generates an invoice every month and emails it to a client. I hate to say it, but having a software that automates your billing processes does not mean your business will experience the benefits of recurring revenue.
The definition of recurring revenue is doing work once and getting paid on a predictable schedule. At the end of the day, the automation software is only a tool, and your business could still have thousands of dollars tied up in unpaid invoices.
Without implementing the right processes, your business is not going to be able to enjoy the freedom and stability that recurring revenue can bring to your company. Having all of your clients on autopay is not as difficult to achieve it seems, all you need is to make these simple changes to your workflow.
Automation is only part of the process
We all know the recurring revenue is possible for an MSP of any size to implement. The key is to build out strong processes of how clients are going to pay you and when.
Getting clients on an autopay schedule using a payment portal only requires one small change in your process. All you have to do is make it a standard expectation listed in your business contracts.
The autopay discussion is also worth having with existing customers based on the high level of service your business provides. They need your MSP’s support to operate; you’re maintaining their business-critical services and deserve to be paid on time.
Putting clients on autopay may seem like a daunting task that’s not worth the hassle. However, if you don’t put those crucial processes in place, clients are more likely to take advantage of you. You will, in effect, be giving them free products and services.
Many are not going to pay for all your team’s work. MSPs must have a system in place to continually collect payments, starting with a one-time setup on autopay. That’s the way the recurring revenue model is supposed to work.
That system also puts your business in a better position with clients who don’t want to pay their bills. If 90% of your customers have agreements that allow your business to charge them automatically every month you can say goodbye to clients who don’t pay their bills.
Autopay and payment automation should be pitched as a positive change that won’t disrupt your customers negatively. When you use a solution like ConnectBooster you can give your customers total transparency in their account and give them instant access to view all their invoices or make a payment.
You have the right to demand recurring payments from your clients. Once you implement that into your processes you can experience true recurring revenue.
If you want to make the switch to recurring revenue, check out our partnership with CharTec.