27 February 2018

Recurring payment, what you need to know

The recurring payment is that payment that your company makes automatically subject to a daily, weekly, monthly, quarterly or annual frequency. In general, this type of expense corresponds to the charge for the consumption of products or services of a very varied nature, with a common characteristic: that its collection was previously authorised by the debt holder.

You probably already knew about recurring payments, but what you may not yet know is that they can represent an interesting source of advantages for your business.

Recurring payment and its benefits for the company

Many times, Recurring payments are a solution that simplifies accounting management for the business owner.. The advantages of using media like this are, for example:

To be able to benefit from discounts.
Improve budget planning.
Avoiding unforeseen events.
Gain control over your accounts.
Facilitate payment for services or products to employees of your business.

Thus, in the case of refuelling, A fuel allowance would be one of those allowances we're talking about. Without this tool, a business that employed travelling sales representatives, specialists, and executives would have to contend with petrol expenses for the company cars made available to them all.

As a result, at the end of the month:

The spending on petrol would be difficult to predict, and may include significant variations from month to month.
Accounting and control would become complicated, with information arriving from different accounts, cards, and individuals.
Delays may occur when submitting proof of payment.
There is a risk of not being able to justify some expenditure, if receipts are lost or never reach the company.

On the contrary, companies that decide to opt for incorporating a card of these characteristics into their management enjoy the benefits of recurring payments that this system provides them:

Single invoice to deduct VAT, simplifying the company's compliance with its tax obligations.
Guaranteed 3% discount on refuelling at any petrol station in the network, an extra that wouldn't be possible when not using a recurring payment system like this one.
The largest network of use with Solred, so that there is always an accessible pump on the route to be travelled and no time is wasted.

With a prepaid Petrol Ticket, all you need to decide is:

The number of cards they want to enable for fuel payments.
The amount each will have per month for refuelling.

In this way, each day one of the month you will be certain to know what the total amount for all the cards will be and the total to pay including VAT. At the same time, your employees will have greater convenience and freedom, as they will be able to pay for this type of expense without needing to pay upfront and without having to worry about keeping and submitting a receipt afterwards.

Did you know about this way of leveraging recurring payments to improve your accounting management?