Small Business Financing: Stay on Top of Recurring Billing
Recurring billing can be a blessing for small business owners when they are looking to save time, allowing them to take the guesswork out of paying for services that they would be renewing anyway. In fact, it is pretty easy nowadays to put almost every constant expense onto a recurring billing plan, but there are a few considerations that small business owners should keep in mind if they are using a recurring plan to pay for more than a couple of services in order to avoid needlessly losing money.
Can I get a discount for paying upfront? The first thing that business owners might want to consider is whether or not they can get a discount on their services by paying upfront. While it is easy to leave a service on recurring billing on a month by month basis, it may be the case that you could save a large percentage of your total costs by purchasing your subscription up front, and even if there is not a specific discount mentioned, in the event that you are going to be using something for a while, you might want to try and negotiate with your sales rep to see if a favorable rate can be obtained.
How long do I need this service for? Be realistic when signing up for services. If you don’t really see yourself or your employees being interested in using the functions presented by a subscription for longer than a temporary period of time, then there is little reason to purchase the service for longer than you think you will use it since you can always renew your subscription down the road if it turns out to be insufficient. It’s better than putting money down that you are not able to get back in what is essentially a gamble that you will actually be using what you bought.
Do I need paid features or am I good with free functionality? Some services may feature more functionality along with a paid subscription, but for small business owners these additional features might be overkill, going beyond what they actually use. For example, a business owner might have the option to unlock a higher level of functionality that would give them access to four new user accounts and unlimited data storage, but if they are using a free version with one account and limited storage without issue, why should they be compelled to activate a paid service? Weigh the pros and cons, and if you don’t find the pros of a subscription outweighing the impact on your finances, then don’t do it.
Photo Credit to Chris Potter