For a business to stay viable long term, you need revenue. Revenue is what keeps your business running; it is the income that you get from the good, services or products that you offer, hopefully making a profit.
Direct debit billing is beneficial to companies or businesses in collecting regular payments from members or customers because it automatically takes the money out of your customer’s bank account and transfers it into yours at a set date, or one-off transaction. However, sometimes these payments may fail due to various reasons, and this means that you are losing out on money and important income that you need, and more importantly, is rightfully yours.
Reasons why you might lose revenue
Credit card declines are a reason why your payments may have failed including:
- Gateway issues that cause the transaction to fail
- Credit limits cause the card to be declined temporarily
- Inaccurate card information
- Stolen or lost credit card
Why recovering revenue is important to your business
This is all you need to think twice about letting that failed credit card transaction go
Business-to-business (BSB) companies face failure rates of 9% for monthly recurring credit card transactions, or nearly one out of ten; for business to consumer (B2C) companies, the rate is 14%, about 50% higher.”
If you are a B2B company, think about it why recovering revenue is important to your business. At the end of the month, you are losing out on 9% of your income! That’s 108% at the end of the year!
Recurly further demonstrates why recovering revenue is important to your business from this scenario: Let’s just say that if for every failed credit card transaction, a customer “churned out” right away (churn = loss of client or customer), then the average B2B would lose half half its customers…
Every eight months
For the typical B2C business, they would lose of their customer every five months!
In fact, “over a period of two years, cutting churn from 5% to zero makes a fast-growing business twice as valuable.”
If you are still wondering why recovering revenue is important to your business, think about this –
When you have lost income due to failed credit card transactions and payments, you waste employee time as they then have to call the customer to chase these outstanding payments up. This means that you are using valuable employee time to try and get these problems rectified.
Instead of wondering why recovering revenue is important to your business, how about you just employ a top of the range direct debit billing system that means you have won’t have to worry about revenue recovery because your revenue won’t be lost in the first place?!
A direct debit billing system like Ezypay has an amazing high collection rate of 99.5%! This is as closed to a guaranteed payment as you are ever going to get, so you can put the idea of why recovering revenue is important to your business out of your head, and instead put your confidence in Ezypay to get the job done. Contact us here and one of your friendly team members will be happy to help you get started with Ezypay.
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