How ACH Processing Benefits Merchants

Ok, so I just got my pest control bill.  Same amount every two months. 

Actually, first they stuff a bill and envelope in my door. I lose or misplace this often, if I get it.  Later, 2 weeks maybe, they send a bill, then we're off and running - sometimes other bills follow, sometimes statements (and this is just the first 30 days!). 

This billing system is costly due to the three P's -  people, paper and postage.  You have an employee handling the billing and paperwork at the customer site,  then again,  back at the office - shuffling, stuffing, manually adding payments and collection data to a billing system, then shuffling and stuffing again.  I mean,  really?  

Now I'm trying to help my pest control guy - but you can see where I'm going with this.

  • Web and email hosting
  • Preschool's, daycare
  • Charities, non-profits, churches
  • Utilities
  • Professionals (accountants, attorneys, etc.)
  • Lawn care
  • Health clubs
  • Security services
  • Rentals - storage, apartments
  • B2B!

For you merchants who find yourselves on this list or in similar services and products - this blog's for you!  How about eliminating a large portion of your billing expenses?

  • Paper costs
  • Printing costs
  • Postage costs
  • Labor costs - including errors
  • Collection costs

All while improving your monthly cash flow, immediately.  The less time and money required to collect the money we are owed on services and products already provided, can be time and money spent on new sales and marketing.  Hmm.

You could of course collect payment via credit cards - that works - and we applaud this option - but how about adding ACH (Automated Clearing House) Processing to the mix?  I worked at a health club over 20 years ago and they were doing it then - monthly subscription to the club was collected by credit card or using the ACH and debiting the customers checking account - same time, same amount, every month.  That was it for options (unless you wanted to prepay a year - few takers).  No one wanted to be chasing down hundreds of late payments of $19 - $30/month.  Are you crazy?

If you're business falls into one of the categories I've listed here, make sure you are taking advantage of all of your payment processing alternatives.  

What if my customer doesn't want to or doesn't like it? 

Could be a few I guess - but current financial times and systems dictate direction.  We are heading this way, despite these few.  Automation to improve or eliminate inefficient business processes benefit everyone, maybe even lower prices.

Put together a letter to your customers, let them know their new billing options, collect the information you need to implement and go for it.  You may find the customers that balk, are the ones that aren't paying.  Is this of value to you?   Consider also that this is a service to your customer - and present it as such.  They write, stuff and do the postage thing too. 

ACH processing provides both the biller and customer a full measure of control.  It is permission based, for only a particular service or product, to be collected for a specified amount of money, for a specified time and duration. Either party can cancel the agreement at any time. 

It's gonna cost me

Not as much as your paying now, and that's a fact.  Using the ACH for a monthly or recurring direct debit from your customers checking account is an efficient, inexpensive thing.  Payment processors (and XBS) tout the service for as little as 1/3 the cost of a credit card transaction and remember to look back at the elimination list above....what's that going to save you?   Can you put a value on an increased, dependable cash flow?  Damn straight.  PRICELESS. 

ACH Processing and recurring billing have come a long way my friends.  

HOW IT WORKS - 

Typically a SAAS - software as a service- solution.  You, (the merchant), access a control panel with a username and password.   A customer is added to the database.  The information will include the customers bank routing and checking account number, or credit card number, and the date the billing is to start, recur, and end.   This information is NOT stored on your computer but with a secure, ACH Processing provider.  You configure a recurring bill ONCE that includes -

  • a description of the services sold
  • the cost or billing amount
  • an email address for a receipt to be sent
  • DONE

Every time your customers account is debited per your initial settings, both you and your customer will be notified.  If there are insufficient funds, both again will be notified including a time the fund request will be resubmitted - all automatically.  These SAAS services are savvy, and allow you to customize the look and feel of the email communications and receipts to your brand.  

This is less complicated than you think.  Complex electronic billing software for a customer recurring payment isn't needed.            

If saving time and money isn't enough to convince you of the power and benefits of ACH Processing, just ask yourself this - Would you rather send a receipt or a bill?  

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