The one thing no business should leave up to chance is their cash flow. Only about 25% of companies have short-term cash flow accuracy.

And even then, their cash flow forecasts are less than 70% accurate. In the UK, small businesses have a hard time getting paid on time.

This makes it difficult for these companies to pay back their loans on time. If you follow the domino effect, you'll see that it has an overall detrimental impact on the economy.

It's no better in America - only 40% of small businesses are profitable and 82% fail due to cash flow issues.

But what can business owners do to ensure their cash flow concerns don't shut down their companies? One option is to implement a recurring billing model for your services or products.

Let's take a look at why and how to use recurring payments to strengthen your cash flow.

What Are the Benefits of Recurring Payments?

The best way to see the potential of a business model is to look at the success (and failures) of other companies already implementing it.

We can start with Adobe. If you didn't notice, the company switched from a one-time payment model to a subscription-based model.

During the 3rd quarter of 2016, it brought in a record $1.46 billion in revenue and $0.75 earnings per share. It even witnessed a 20% year-over-year increase.

The company can thank recurring revenue for this, which grew to $3.7 billion in one year. This is a quarter-over-quarter increase of $285 million.

And this is a recurring theme for multiple businesses, including Netflix.

Let's review some of the reasons why you should consider setting up recurring payments.

Boost Your Revenue with Little Effort

When you're selling products and services that have a one-time payment, you spend the majority of your time trying to convert prospects and retain customers.

When you have a recurring payment cycle, you reduce the legwork involved in generating cash flow. Once you set up the billing schedule, you sit back and watch the money come in.

All you have to focus on now is ensuring your products and services are up to par, so your customers stick around for the long-term.

Minimize Late Payments

One of the most significant factors that negatively impact your business's cash flow is late payments. You don't have to worry about this at all when you're billing customers on an automated basis.

In many cases, businesses use late fees to deter customers from making late payments. This can put a major damper on your relationship with customers.

And this brings us to the next benefit.

Grow Stronger Customer Relationships

The beauty of recurring payments is that it eliminates the need to hound customers about late fees. This only places tension on both parties and strains the relationship.

And since recurring payments are a no-brainer, it allows you and your customers to save time and energy.

It's good to create a system that allows customers to change their card/bank details easily and payment due dates. Plus, it'll help more if your customers can upgrade or downgrade their memberships on their own.

Save Money and the Earth

Another issue that recurring bills eliminate is waste. You no longer have to waste your money on sending out paper invoices. Nor do you have to worry about paper waste from invoices and envelopes.

You're killing two birds with one stone -- reducing office expenses, as well as your carbon footprint.

Better Secure Your Customer's Sensitive Data

Having your client's payment details lying around in folders is asking for trouble. Unless you have a secure way to handle and store these files, you could find yourself in a data breach.

With recurring billing plans, you're receiving all of your payments virtually. So there's no worry about unauthorized personnel viewing financial documents.

Both you and your customers can rest easy knowing sensitive information is out of reach.

Make Sales Forecasting Easier

One of the issues business owners battle with is accurately forecasting future sales. You can make it easier for your business to make sales forecasts using recurring billing.

Let's say you have 10,000 customers paying you $100/monthly. This means you can expect to receive around $100,000 per month.

Now, you should expect some customers to unsubscribe after the first month. But at least with this model, you can predict how much you'll receive on a month-to-month basis.

You have to see the number of subscribers you have at the beginning of each cycle to make a more accurate forecast.

Build a Loyal Customer Base

When you offer a quality product or service customers are willing to pay monthly for, you're creating a group of loyal fans. If you play your cards right, you can turn them into lifetime customers.

These individuals will eventually turn into brand advocates who help drive in more customers to your business.

Do What Your Competitors Aren't

Most business models are one-and-done deals. They're looking to make a quick buck rather than offer a more affordable product that generates income over an extended period.

This is what expensive brands like Adobe are doing to win over a broader market. If your products and services are priced high, then you can offer on-going monthly payments at a fraction of the cost.

This will give you a competitive edge over companies that are still using one-time payment terms.

Now that you can see some of the ways recurring payments can benefit you, let's see how you can implement this into your business.

Offer to Ship Products Regularly

There are certain products people need on the regular. For instance, if you sell dental products, then toothbrushes, toothpaste, and floss are items you can offer repeatedly.

You'll find sellers on Amazon offering this service to customers at a discounted rate. For example, customers can sign up to have 5 lbs of flour sent to their home every three months at a 15% discount.

Pack Your Content Behind a Membership Site

Another way you can switch to a recurring billing cycle is to create a membership website. This works if you have a course, videos, or premium content your customers are willing to pay for.

You'll find some content creators packaging their blog posts, e-books, and other pieces into an organized online course and then offering a membership to access it.

Bill Monthly for SaaS Products

Software-as-a-service (SaaS) is big business right now. You can find companies in technology, finance, health, and a host of other industries now offering SaaS products.

Businesses and consumers are always looking for ways to improve their lives. If you have a software service that can make solve their problems and improve efficiency or productivity, then you may have a winner.

Rather than charging once for access, you can have customers pay on a monthly or annual basis. Grammarly is an excellent example of this, which offers a simple editing tool at a monthly or yearly rate.

Become an Affiliate of SaaS Products

Maybe you don't have software to sell as a service on a recurring basis. However, there are many out there so why not become an affiliate of one?

You can build content, authority, and trust in the industry you're passionate about. And then use this platform to promote a SaaS product that's relevant and valuable to your audience.

Then each visitor that subscribes, you get paid. And each month they continue to pay, you get paid too.

Offer Your Services On a Retainer

Maybe you're a service provider who'd like to earn a recurring income. You can easily do so by setting up a retainer model for your clients.

This is when a customer pays you in advance for monthly services. You can have it set up so they receive a certain number of hours or projects they can demand per month.

This way, you're not taken advantage of.

Setting Up Your Recurring Payments

To set up recurring payments, you're going to need a tool and platform. There are several payment portals you can use, such as PayPal and Stripe.

You can create "buy now" buttons on your site that take them through the portal to complete the subscription. Or if your model requires an invoice to be sent and paid, then you can use a tool like invoicely.

This allows you to set up automated recurring invoicing for clients that pay the same amount at regular intervals.

Once you have everything set up, you'll be well on your way to improving your cash flow, customer retention, and security.

Let's us know in the comments if this move was the right one for your business!