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Should Service Agreements be Billed Monthly, Quarterly, Semi-annually, Annually, or with Service?

Offering services on a recurring basis has become increasingly popular in recent years. For both the customer and business, recurring billing offers service payment and delivery in a more convenient and efficient way. 

 

But between all of the billing options, which is the best one to offer to your clients? For customers, what are the advantages of one over the other? Here’s a rundown of these options and their benefits.

 

Monthly Service Billing

For many customers new to a particular business and/or service, paying monthly is more appealing. With this approach, they get the opportunity to see how the service fits their needs. As a business, this helps attract those customers who’d rather dip a toe in the water before making a major commitment. Also, the consistent revenue stream provided by monthly payments can be more manageable for some operations. 

 

Quarterly Service Billing

By billing quarterly, you can provide customers with a short service “contract,” with less hassle to remember to pay each month. Customers who are more committed to using your service for longer periods may prefer quarterly billing’s dispersion of costs over the course of the year at intervals greater than those offered with monthly billing. 

 

Semi-Annual Billing

What about every six months? For your business, keeping up with payments at the beginning and halfway mark of each year can help your operations team by minimizing the number of transactions to deal with over 12 months. 

Additionally, first-time customers get the benefit of experiencing your services for a six-month period. During this time, it will be much easier for them to receive support regarding any service questions and see the results of your service on their productivity and bottom line. 

 

Annual Service Billing

By opting for annual billing, customers can pay a one-time fee upfront to cover their services for the entire year – it’s sort of a “set-it-and-forget-it” option. Annual billing is a terrific choice for customers who know the service well, saving them time as well as money, since many companies offer a discount, such as 10% off or one month free, in return for that full-year commitment. 

As for the business, not only does the annual payment offer the benefit of guaranteeing a year with the customer, it also increases retention, thereby establishing the foundation for a strong business-customer relationship.  

 

With-Service Service Billing

Or - you can just bill customers each time they use your services. With-Service billing allows your customers to use your service at a pace that reflects their needs. Although there may be less consistency in tracking income for each period, you can be sure that your customers are satisfied with each service, and that your business is making a profit. 

 

Unlock the Opportunities! Call [7] Software.  

Since your customers will have differing needs and preferences, sometimes offering multiple billing schedules is the best option for everyone! By creating a pricing structure that aligns with your customers’ needs, you can optimize your cash flow in a way that is tailored to your clients. 

 

For more ways to manage billing and make collections tracking easier, check out the [7] Software website!

 

Recurring billing options aren’t the only important factors in service billing. Make sure your sign up process is simple, and that making payments is easy! To learn more about the benefits of a software management system, schedule a live demo of 7 Software today!