If you’ve ever found yourself chasing clients for overdue invoices, sending awkward “just following up” emails, or waiting weeks for cheques to clear, you’re not alone. Late and inconsistent payments are one of the biggest headaches for small and mid-sized businesses.
That’s where pre-authorized payments come in. Simply put, they let you set up an agreement with your customer so payments come out automatically, no chasing, no reminders, no stress. And here’s the best part: setting them up is far easier than most business owners think.
In this guide, we’ll walk through why pre-authorized payments matter, how they’ve evolved from paper-based headaches to seamless digital solutions, and exactly how to set them up for your business.
Why Pre-Authorized Payments Matter
For business owners, cash flow is everything. Pre-authorized payments provide three key advantages:
Cash Flow Stability: Instead of waiting on clients to send money – or juggling unpredictable revenue, you get a predictable stream of payments deposited automatically. That stability makes planning, budgeting, and scaling much easier.
Reduced Admin Work: Every hour spent chasing overdue invoices is an hour you’re not growing your business. With pre-authorized billing, there are fewer phone calls, fewer emails, and fewer sticky notes reminding you who still owes what.
Customer Trust and Professionalism: Customers appreciate systems that are consistent and easy. When payments are automatic, they see your business as organized, reliable, and professional, all of which build long-term loyalty.
Industry Applications
Pre-authorized payments are valuable across many industries:
- Gyms and fitness studios: Monthly memberships run smoothly without staff chasing renewals.
- Rental companies: From equipment rentals to property management, recurring charges become simple.
- Contractors: Ongoing projects can be billed in stages automatically, reducing payment lag.
- Professional services: Accountants, consultants, and law firms can bill retainers or monthly fees with less friction.
No matter your sector, if you bill clients on a recurring basis, pre-authorized payments take the pain out of collections.
What Was vs What Is
The Old Way
Not long ago, pre-authorized payments meant paper forms, void cheques, and manual entry. Customers filled out authorization slips by hand, businesses filed them away in cabinets, and staff manually keyed transactions into bank systems.
The result? Errors, lost forms, delayed processing, and hours of wasted admin time. A single mistake, like misreading a routing number, could cause bounced payments and unhappy clients.
The New Way
Today, pre-authorized payments have gone digital. Using EFT (Electronic Funds Transfer) in Canada, ACH in the U.S., and recurring credit card billing, businesses can automate the entire process online.
- Customers complete a secure digital authorization form.
- Payments are automatically scheduled based on frequency and amount.
- Funds are transferred without manual intervention.
The difference is night and day. What used to be a clunky process is now a frictionless, secure, and automated system that saves time and prevents mistakes.
Step-by-Step: How to Set Up Pre-Authorized Payments
Ready to get started? Here’s how to set up pre-authorized payments in a few simple steps.
Step 1: Collect Authorization
Every pre-authorized payment begins with customer consent. Instead of handing out paper forms, you can now send a secure digital form via email or link. The customer fills out their banking or card details once, and you’re good to go.
Step 2: Choose the Payment Method
- Credit Card Recurring Billing: Great for businesses where customers are already comfortable paying by card. It also works seamlessly with surcharge programs (so you’re not absorbing processing fees).
- EFT/ACH: Directly pulls from the customer’s bank account. Ideal for larger transactions or customers who prefer not to use credit.
Step 3: Set Frequency and Amounts
Decide how often you want payments to occur (weekly, monthly, quarterly, etc) and whether amounts are fixed or variable. For example:
- A gym might charge $49 every month on the 1st.
- A contractor might bill $2,500 every two weeks until a project is complete.
Step 4: Automate Notifications and Receipts
Customers appreciate transparency. Automated systems can send reminders before a charge, and receipts immediately after. This builds trust and reduces disputes.
Step 5: Monitor From One Dashboard
Instead of juggling paper records and manual spreadsheets, you can track everything from one online dashboard. You’ll know exactly which payments are upcoming, which have been collected, and which (rarely) failed.
Compliance and Customer Communication
Whenever you’re charging customers automatically, two things matter most: compliance and clear communication.
Transparency Is Key
Always make it clear:
- When payments will be taken.
- How often they’ll occur.
- What amount will be charged.
Securely Store Agreements
Digital platforms allow you to safely store signed authorizations. This protects both you and your customer in case of disputes.
Offer Flexibility
Life happens. Offering customers the ability to pause, update, or cancel agreements not only keeps you compliant but also makes your business feel more customer-friendly.
The Rescue Payments Advantage
Not all pre-authorized payment setups are created equal. Here’s how we makes the process simple:
- Pre-Authorized Billing with Surcharge Compliance
Collect recurring credit card payments without absorbing processing fees. The 2.4% surcharge is applied automatically and compliantly, saving you money. - EFT + ACH on the Same Link
Whether your customer is in Canada or the U.S., you can send one link that works for both. They choose bank transfer (EFT/ACH) or credit card, and you get paid either way. - Seamless Integration
Our system plugs directly into tools you already use, like accounting software and POS systems. No double entry, no messy reconciliations. - Cost Savings + Reduced Headaches
Between fewer admin hours, compliant surcharging, and automated cash flow, Rescue Payments helps businesses save money while getting paid faster.
Your Next Step
Recurring billing doesn’t have to be a hassle. With pre-authorized payments, you can stop chasing clients, avoid collection calls, and finally enjoy predictable revenue.
The setup is simple: collect authorization, choose your method, set your schedule, automate communication, and monitor everything from one dashboard.
A few clicks = steady cash flow, fewer headaches, and happier customers.
Give your clients a seamless payment experience, and give yourself peace of mind.
