Why Recurring Invoices Make Your Business Sticky

Are you sending recurring invoices to clients? If not, here’s why you should consider them. 

Let’s start here: think about how many subscriptions you or your business currently has? Five? Ten? A million? Some surveys show that the average U.S. household has around 9 subscriptions across video, music, gaming, and software. On the business side, the subscription model is more popular than ever. The UBS financial services firm predicts that the subscription economy will double by 2025, to $1.5 trillion.

And if something is growing that quickly, you know it’s because it’s working, a.k.a., profitable. A subscription model brings in revenue upfront, gives businesses a clearer picture of their sales funnel, and makes the brand more “sticky” to its customers. That’s why even restaurants are getting in on it, offering a subscription service of meals delivered to your door—especially popular during the pandemic.

While your business may not be geared for a subscription model, you personally can reap the benefits of this “stickiness” with recurring invoices. Let’s examine why you should strongly consider recurring invoices for your clients.

What is a recurring invoice?

The definition is baked right there into the phrase, but recurring invoices imply one specific thing: automation. If your business has been manually generating and sending out each invoice at the end of every project or time period, recurring invoices means you are automating this process so these invoices go out at regular intervals without taking up any of your time.

Recurring invoices are a popular feature in great bookkeeping software like Lendio’s software, which are customizable as well as flexible in terms of when they should be scheduled, the accompanying email to the client, reminder emails, and the tracking of each invoice’s status.

What are the benefits of setting up recurring invoices?

Save time, both ways.

The most obvious benefit is saving time. Say you have 10 clients who you invoice each month, and creating and sending an invoice takes 5 minutes each. That’s nearly an hour of your time every month spent on invoicing, and that doesn’t even consider sending any reminder emails or tracking whether they have been paid or not. This can easily add up to hours of busywork each month that should be automated.

What you may not consider is the time savings on your clients’ end as well. Think about your own business: you always want invoices coming in as soon as possible, and a missing invoice equals a lot of headaches trying to track down what task matches which bill, issued at some time! This is incredibly useful when invoices come in late, which leads to accounting nightmares and unbalanced books. Avoid ever giving your clients these issues by using recurring invoices so they never receive a late invoice again.

Make fewer mistakes.

Nothing makes your business look more unprofessional than errors on invoices. When it comes to money matters, clients quickly lose all sense of humor. Overcharging or undercharging always leads to confusion and, in worst cases, broken professional relationships.

Automated recurring invoices greatly reduces the human error that creeps in when you manually create invoices ad hoc. Since your accounting software is issuing invoices from templates specific to each client, there are no errors in address, payment methods, or due dates.

Even if your invoice amounts are different each month, not having to worry about making mistakes in any other part of the invoice makes it easier for you to simply focus your attention on just the dollar amount. In Lendio’s software, you can program the recurring invoices to save as a draft, so you can still manually click “Send” in case you want to do a final review yourself.

Lendio’s software makes setting up recurring invoices simple.

Get paid faster.

The faster you can send out an invoice, the faster the client can pay it. Recurring invoices are the best way to never send invoices late, or forget to send them at all. Additionally, you help your clients get into a rhythm of receiving your invoices and paying them out, building it into their business routine.

The automation especially helps when following up on invoices. Perhaps you sent a manual invoice on time, but forgot to send a follow-up reminder email. While it’s ultimately the client’s fault, the problem affects your business because now the payment is late—meaning it’smoney you don’t have. Automated recurring invoices through accounting software like Lendio’s software also send automated reminders, which are integral parts of having fast payments.

Keep in mind that this also saves you the hassle of counting down net15 or net30 days in order to keep track of when payment reminders should be sent.

Make your business sticky.

All these conveniences in short turn your company into a subscription service for your clients, especially if they have automatic payments set up on their end as well. Recurring invoices provide the convenience of regularly scheduled pay cycles, giving your clients more reason to “lock in” with your service.

Speedy, error-free invoicing goes a long way to establishing a positive and trusted business relationship with your clients. Keeping money matters hassle-free and predictable is key to frictionless interactions, where dollars should never be the main focus of the relationship. Recurring invoices, while a simple idea, can absolutely help make this happen.

Want to try Lendio’s invoicing system for free? Click here to sign up today!