Maintaining personal or business expenses can sometimes go hard. Automatic payment processing is one best way to make sure personal and business payments are dealt with. In an automatic payment process a specific cash amount is automatically withdrawn from one account to another to pay off the expenses.
With the help of automated payments, you can focus on other important business tasks while the process makes accounting and business procedures more proficient. There are many benefits of setting up automatic payments. Few of them are described below.
- Usefulness is the first benefit of using an automatic payment system. The automated payment process lessen the problem of monitoring due dates, late or lost payments.
- Some automated payment processing vendors offer rewards like discounts or cash back to customers.
- Payments affect credit scores, but by setting up automatic payments you can assure timely payments resulting in improved credit score.
- Going green is another major benefit of automated payments. This paperless technology allows you to eradicate the use of paper and stamps.
As the modernization has made things easier and efficient, there are some disadvantages to it as well.
- While you can save time and money in the long run while making payment arrangements with your bank, some alternative lenders may charge an recurring fee resulting in some costs to your process.
- Another advantage of using an automatic payment process is that you have the financial liability of commemorating that payments are being deducted.
- Having adequate amount of cash in hand to cover the debits is another major disadvantage. If you don’t have that cash available, you will bring upon yourself costly overdraft fees and it will harm your credit. And if your lender covers your payments for you, it will be another highly added cost.
Tips to Manage Your Future Automatic Payments
- The first thing to make sure you understand all fees linked to your automatic withdrawals. There are some grey charges attached in form of vendors annual renewal fee which you should consider.
- As a business owner, you need to place a system for your automatic expenses payments. You will find many options on hand helping you to monitor your automatic payment timetable. There are many mobile apps like PocketBook or Mint Bill, which keep track of your bank account transactions and inform when payments are due.
- Financial accountability command good financial accounting practices. If you forget that a payment is going to be withdrawn, you need to have some bank account buffer available.
- Just like you need to create payment schedules, you also need to make outgoing payment tracking. You will find numerous cloud accounting systems like QuickBooks that let you get hold of your automatic payments.
- Setting up a new bank account to cover fixed costs is a feasible solution. By setting up a new account, you can transfers payments from your main bank account into this account.
Always Review Your Accounts
You need to attentively examine your accounts regularly after setting up your automated payments. Have you ever successfully deal with your business’ automatic payments? Share your experience with us by commenting below.