For small firms and agencies alike, cash flow is king. Knowing when and how payments are being collected grants you peace of mind with a stable, predictable invoicing schedule. If your client is concerned about overpayment, or if they’d prefer to use ACH to pay, a payment plan is a simple solution for both problems. Here we’ll discuss the details of why you should offer payment plans for clients and how they would be beneficial for your business.
Convenience and Easy Setup
With payment plans, you need to set up an invoicing schedule. A virtual terminal will automatically email the invoice to your client so they can pay. You can even choose whether your client can pay using ACH, a credit card, or both. Clients want flexibility in how they can pay for big-ticket services and items.
They can even set up autopay, automating the process and making it worry-free. You won’t even need to watch your mail for checks. Best of all, with Stax’ auto-update feature, credit cards are automatically updated before they expire so you never miss a payment.
Predictable Cash Flow
When setting up a payment plan for your clients, be clear about what the expectations are on the installments. That way, both you and your clients know exactly what to expect on a month-to-month basis. Or, you and your customer can agree on a payment plan based on milestones.
A home contractor could set up a payment plan of 30% upfront as a deposit, with the remainder invoiced as work is done. Or a small law firm can set up a 6-month invoicing schedule for a client to keep their costs predictable and stable. Payment plans can be the solution for clients who can’t pay high up-front fees for services. You can track these invoices through a virtual terminal, with total visibility into a client’s payment history. This is especially helpful if a client tends to be late on their payments.
Payment plans offer a sense of comfort for clients through their predictability. No one likes being surprised with a bill, and as a business owner, an unstable cash flow is just as bad. They also help you with collections and cash flow. Once you’ve agreed on a plan with your client, you’ll know exactly when to anticipate an influx of cash – especially if your client uses autopay.
Contact a Payments Consultant today to learn more about how you can make invoicing and billing simpler for your business.
Quick FAQs about Payment Plans
Q: What are the benefits of offering payment plans to clients?
Offering payment plans to clients provides convenience, flexible payment options, predictable cash flow, and increased client satisfaction. It also helps businesses maintain a stable and predictable invoicing schedule.
Q: How does a payment plan work?
A payment plan involves setting up an invoicing schedule where the client is billed periodically. The invoice can be sent automatically, and the client can choose their preferred payment method, such as ACH, credit card, or both. Clients can also set up autopay to automate the process.
Q: How can payment plans improve cash flow?
Payment plans ensure a predictable cash flow as clients are aware of their payment responsibilities in advance. This way, businesses can anticipate when to expect an influx of cash.
Q: What options do clients have when paying through a payment plan?
Clients can choose to pay using ACH, credit card, or both. They can also choose to set up autopay, which automates the payment process, making it worry-free for both parties.
Q: What is the role of a virtual terminal in a payment plan?
A virtual terminal automatically emails the invoice to the client for payment. It also tracks the invoices and provides complete visibility into a client’s payment history, which is useful in cases where a client tends to be late on their payments.
Q: How can payment plans be adjusted to suit the client’s needs?
Payment plans can be customized based on milestones or a fixed monthly basis, depending on the agreement between the business and the client. For example, a home contractor could require a 30% upfront deposit, with the remainder invoiced as work is done.
Q: What is the significance of Stax’s auto-update feature in payment plans?
Stax’s auto-update feature automatically updates credit card information before they expire to ensure that businesses never miss a payment.
Q: How do payment plans affect customer loyalty?
Offering payment plans can enhance customer loyalty as it provides clients with a sense of trust, security, and comfort due to the predictability and flexibility of payments.
Q: Can payment plans be used for high-ticket services or items?
Yes, payment plans are especially beneficial for high-ticket services or items as they allow clients to manage their expenses better by spreading the cost over a period of time.
Q: Why are payment plans preferred by businesses with unstable cash flow?
For businesses with unstable cash flow, payment plans offer predictability and stability. The business knows exactly when to expect payments, which helps in better financial planning and management.
