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Recurring billing is a smart way for businesses to secure a steady income stream. For small companies in the Philippines, managing regular payments efficiently can be the difference between growth and failure. With simplified invoicing and collections, you ensure that customers are billed automatically at set cycles. This reduces missed payments, saves valuable time, and improves cash flow reliability.
Let this guide be your go-to for mastering recurring payments! We'll delve into the intricacies of recurring billing, explore its benefits for businesses of all sizes, and most importantly, introduce you to Mochi.ph – the Philippine solution designed to streamline your recurring payments and empower your business for growth. Let’s begin with the basics:
Recurring billing is a payment model where customers are automatically charged for a product or service at regular intervals, such as monthly or annually.
Fixed Billing: A fixed amount is charged, regardless of usage. This is common for subscriptions to software, streaming services (Netflix, Disney+, Spotify), or gym memberships.
Usage-Based Billing: Customers are charged based on their actual usage of a product or service. This model is often used for cloud computing services (Amazon Web Services, Microsoft Azure), phone plans, or utilities.
Tiered Billing: Customers are charged based on their usage, with different pricing tiers for different usage levels. This is commonly used for Software-as-a-Service (SaaS) products. Examples include Google Cloud Platform, Slack, Zoom, and Dropbox.
Despite the perks, many businesses hit a few bumps when trying to adopt automatic payments, these are: technical, customer-related, financial, and operational. Let’s take a closer look at each as we also discuss practical tips to help you smoothly make the transition.
The first stumbling block is ensuring that existing systems can integrate with the billing software. This may require upgrading or replacing some structures. Moreover, businesses need to verify that their data is secure and that the software is compliant with all relevant regulations.
The invoice automation software needs to accommodate existing accounting software, customer relationship management (CRM), and payment gateway tools. Make sure data flows smoothly between systems and there are little to no conflicts.
Businesses need to ensure that customer data is safe and secure. Especially in the Philippines where data breaches are a growing concern, protecting sensitive customer information like credit card details and personal addresses, is essential. Robust security measures, including encryption, firewalls, and regular security audits, are necessary to protect against cyber threats.
Strict adherence to data privacy regulations like the Data Privacy Act of 2012 is mandatory. For those with international clients, your preferred system must be compliant with the PCI DSS (Payment Card Industry Data Security Standard) and the GDPR (General Data Protection Regulation) in the European Union.
Another challenge that small businesses face is managing customer churn and cancellations. When people cancel their service agreements, it can lead to loss of revenue. Offering discounts or incentives can help keep customers engaged.
People cancel their payment commitments for a variety of reasons. It could be due to price changes, customer dissatisfaction, or a lack of need for the service.
This can happen when there are billing errors (i.e., wrong details such as card number, expiration date, or CVV code), client has insufficient funds, invoice disputes, or there’s delayed communication. Payment failures can lead to revenue loss, increased churn rates, and additional administrative work.
Financial challenges in subscription management can significantly impact a business’ stability and growth.
Managing taxes and compliance can be a stumbling block, especially for businesses operating in multiple regions with varying tax laws. Confirm that taxes are calculated and applied accurately on all recurring billing transactions. Without proper tax calculation features, you can run the risk of non-compliance and receive costly penalties.
Automated billing systems need to comply with all relevant payment regulations. In the Philippines, this includes Bureau of Internal Revenue (BIR) compliance, Anti-Money Laundering Act (AMLA), Consumer Act of the Philippines (Republic Act No. 7394), Electronic Commerce Act of 2000 (Republic Act No. 8792), and Bangko Sentral ng Pilipinas (BSP) Regulations.
This leads to revenue loss from billing errors. Moreover, the costs associated with implementing and maintaining automated invoicing software can strain financial resources, particularly for smaller businesses.
Finally, SMEs need to consider the operational impediments, such as scaling for growth, maintaining accurate customer data, and employing effective invoicing workflows.
As small businesses grow, the number of subscriptions will also grow. The billing system needs to be able to scale to accommodate for expansion and development.
Establish clear workflows for invoicing. This includes processes for handling new sign-ups, cancellations, and changes to subscriptions. It’s vital to maintain accurate customer data to ensure invoices are sent to the correct clients and that payments are processed correctly.
To overcome technical issues, start by selecting a reputable software provider known for offering reliable customer support. Choose something that seamlessly integrates with your existing systems to avoid disruptions.
Work with your IT team (or seek expert advice if you don’t have an in-house IT department) to ensure data is secure and everything complies with all relevant regulations. IT professionals can also provide valuable insights into system optimization and scalability, helping you to future-proof your billing operations.
Begin by offering a range of payment plans tailored to different needs, so every customer can find the right fit. Consider providing a free trial or money-back guarantee. This will make it easier for customers to choose your service with confidence.
Businesses need to provide reliable customer support to help customers with billing issues and answer their questions. Deliver top-notch customer service to quickly resolve disputes, answer questions, and build trust. Make sure terms and pricing are transparent to avoid confusion.
Go with payment processing software that already has tax calculation features to keep everything accurate and compliant.
Make it a habit to regularly check billing reports to catch and fix any mistakes before they hurt your profits. It’s also smart to have a budget buffer in place to act as a cushion for slower times or unexpected costs.
Establish clear workflows for invoicing. This includes processes for handling new sign-ups, cancellations, and changes to subscriptions.
Handle operational obstacles by picking invoice automation software that can grow with your business. Having a solid customer data management system is key to keeping everything accurate and consistent. Clear and straightforward Standard Operating Procedures (SOPs) will help avoid any mix-ups.
What makes a recurring billing software the “right choice” for your business? With many options offering similar features and controls, it’s important to know what sets the best ones apart. Understanding these key differences can help you make an informed decision that will benefit your enterprise in the long run.
By automating tasks like invoicing, especially for subscriptions, these tools free up entrepreneurs to focus on growing their company. We suggest the following tried-and-tested software solutions to lighten your administrative load.
Mochi Solutions, or simply Mochi, is a Filipino-based recurring billing software that provides a hassle-free, efficient, and secure platform for small and medium enterprises. They’re also dedicated to creating opportunities that go beyond invoicing, supporting real financial inclusion for businesses of all sizes.
Founded by a team of passionate people, it’s their mission to empower Filipino entrepreneurs, accounting teams, and visionaries with financial tools that drive success. By digitizing invoicing and automating routine tasks, Mochi makes it easier for businesses to focus on growth.
Mochi understands the challenges of digital transformation and is here to make it easier. With their Design Lab, business owners can tackle real-world issues—like customer management, order processing, contract optimization, and more—by working directly with experts to design practical solutions. Alongside a dedicated support team, entrepreneurs engage in active discussions and hands-on experiences, launching solutions that create immediate, positive impacts on their business.
Implementing recurring billing is straightforward with the right approach.
With these steps, you’ll streamline your billing process, improve cash flow, and set up a scalable system for growth.
Mochi Solutions simplifies automated recurring billing for small businesses. Our user-friendly platform handles everything from subscription management to payment processing, allowing you to focus on expanding your business. Experience the difference with a 60-day FREE trial.
Mochi Solutions is a billing and collections platform designed to help Filipino businesses get paid on time, every time. By digitalizing the invoicing process and automating repetitive tasks, we empower businesses to focus on growth.
