Today’s entrepreneurs face an important choice: to bill customers online or offline? To the brand new startup focused solely on product development, it may seem like a waste of time to think about billing at all just yet. However, as all entrepreneurs discover, it’s ultimately all about getting customers to pay you. We believe a wisely implemented online billing strategy will make this process easier for the following reasons:
Simple Online Billing Setup
A common objection entrepreneurs have to online billing is that they believe it’s a huge hassle. This idea stems from the brick-and-mortar world, where a new convenience store or restaurant must buy expensive machinery to process credit card orders. Knowing this, many entrepreneurs assume the same types of headaches are involved in online billing and refuse to look into it any further.
But truth is, in 2011, online billing is a breeze. Provided you have a merchant account and a payment gateway, services like Maxio can literally have you up and running with the ability to bill customers online in one day. The entire setup process is five steps long and can be completed by anyone with a modicum of business and technology skills.
Convenience of Ordering Online
It should go without saying, but online billing is infinitely more convenient for your customers versus having to call you or mail in a check. Think of Esurance’s current marketing slogan: “people when you want them, technology when you don’t.” Generally speaking, your customers want live attention when your product malfunctions or if they’re having a serious problem. But when it comes to mundane, recurring tasks (like bill payment) they would rather be left alone and use automated technology than talk to you.
Implementing an online billing strategy is the surest way to give your customers the convenience they’re looking for.
Better Scalability For Your Business
In his book The E-Myth Revisited, Michael E. Gerber sends a wake-up call to entrepreneurs online and off. If your business cannot operate without your daily involvement, you don’t have a business: you have a job. A true business is a repeatable system that can be counted upon to produce consistent results over and over with minimal hand-holding. It’s scalable, much like a McDonalds or Starbucks franchise.
Without online billing, your business is not as scalable as it could be. Sure, you can probably keep up with five recurring orders per month, but what happens when there are fifty? Or a hundred? Can your business process a thousand orders as easily as it can process one? With online recurring billing, the answer is an obvious and automatic “yes!” Without it, it is almost assuredly “no way.”
Stronger Fraud Tracking
Identity theft is a major issue these days, and credit card fraud has a lot to do with it. Luckily, if implemented correctly, online billing can actually provide stronger fraud protection than phone billing or other methods. Because the process is automated, all the information necessary to fortify yourself against fraud charges is collected like clockwork, without fail.
Contrast this with the cumbersome process of phone orders, which rely on human beings to transcribe the purchase details by hand. As we noted earlier, human involvement opens the door for costly mistakes and judgment calls.
Streamlined Record Keeping
Another key benefit of online billing is streamlined record keeping. By insisting that all orders and billing cycles be processed online, you are simultaneously automating the record keeping process. No longer will you or members of your staff be forced to merge order details from different sources (phone orders, checks by mail, etc.) into one place. Instead, you can simply print out a full, comprehensive record of all billing history from a single screen, whenever you need to.
The simple act of switching from chaotic, multi-source billing to online billing will instantly simplify accounting and tax preparation for as long as you run your business.
Frees Your Time for More Valuable Activities
As a business owner, you may be familiar with the 80/20 principle. In a nutshell, this principle states that 80% of the results in a given situation come from just 20% of what we do. The numbers don’t always work out to exactly 80% and 20%; the idea is simply that cause and effect are not linear and the majority of the value comes from a few important actions.
Chances are (unless you are a billing company) billing is not one of the critically important few tasks that create 80% of the value in your business. As such, it is not something you should be spending your precious time on. By using an online billing system, you can basically forget about billing and apply your effort to things that produce disproportionate rewards – like delivering value to your own customers.
Resilience For Your Business
In the early days, it’s common for a new start up to designate one guy (we’ll call him Bob) to “handle the orders.” It works fine at first, until an unexpected surge in demand stretches the setup to its limits. Maybe Bob can’t make it into work for a few days. What happens then? You might get by for a while, but consolidating total responsibility for such a crucial task into the hands of one person is not a serious, long-term solution to the problem.
An online billing strategy also goes a long way toward making your business more resilient. As Josh Kaufman of PersonalMBA.com writes, resilience means “having the toughness and flexibility to handle whatever is thrown at you” – which he goes on to call “a very underrated quality in business.” Online billing makes you more resilient by ensuring that no single person is essential to the acceptance of orders.