Firstly, You Need to Know What Is Residual Income!
The first thing that you need to understand is what is residual income. Only then will you be able to realize how important it is for your company and why you should automate as much of the process as possible. For smaller ISOs, the importance of this type of income may seem insignificant. But after your company grows to a certain level, you will be surprised how high the importance of the residuals will get. For most companies, the residuals will become the most important stream of income. So, you should not neglect it and make sure that the CRM that you are using provides the proper residual management tools and features.
For an ISO, the residuals represent the total amount of money that they get for each transaction processed by their clients minus the costs required for these transactions. This means that the more clients your company has, and the more money they transfer each month, the higher your residual income will be. As you can imagine, for a new company, it will be very low. But once the company has a high number of clients, the residuals will represent much more than the amount brought by new customers. You need to keep in mind that the difficulty of the residual management will also rise together with your company. So, you need to find software that can help you automate the process.
Besides Knowing What Is Residual Income, You Need to Know How It Will Affects Your ISO!
What is residual income ? It is an essential part of your ISO’s future. But how exactly will it affect your company? What are the benefits that you can expect from bigger residuals? Well, there are 3 such benefits. And they are an opportunity for any ISO. If you can properly manage your residuals, then you will be able to accomplish the goals of your company much faster. The benefits are:
• Stable income. The first effect that will become visible once the residuals of your company grow to a certain level is an increase in the stability of your company’s income. Your company will no longer depend solely on the number of new clients that it acquires. There will no longer be months where the number of new clients is too low, and your company’s income is not enough. You will always be able to cover all the company’s expenses with the residuals alone. So, the more your company’s residuals grow, the less financial worries you will have.
• Increased profits. With a new stream of income, one with infinite potential, you will see a continuous rise in the profits of your company. You will no longer only make a profit when you find a new client. Every client will represent a long-term increase in the profits of your company. So, the more clients you get, the more the regular profits will increase.
• Faster growth-rate. If you can continuously increase the number of your company clients, then the residuals will be able to help you to also increase the growth rate of your company. This means that the more money you invest in the growth of your company, the faster it will grow. So, the more time passes, the faster your company will get. The only problem that may appear is a growth rate that is too fast that it may be hard to control. So, you need to make sure that you have the skills and the team required for this type of accelerated growth. By now you should know everything about what is residual income.
Lastly, You Should Know Which Method Is the Best One to Automate the Residual Management!
Not that you know what is residual income is and what the 3 main benefits that you can get are, you need to understand the downside of the increase in the residuals of your company. You need to understand that the more your residuals grow, the harder it will be to manage them. The complexity of your ISO’s residual management will rise exponentially with the increase of the income. So, you need to find a method that will help you simplify these processes. The best alternatives on the market are CRMs that can automate most of these tasks.
Keep in mind that there are many options available on the market from which you can choose. And not every CRM will be able to produce the same results for your company. Some of them will be more compatible with your company than others. So, you should do some research and find the best alternative for your ISO. But there are 3 segments that the CRM that you are going to use for residuals must include.
• Residual calculations. The first segment represents the ability of the software to take care of all the calculations in your place. So, the only thing that you have to do is to open the software and check the residuals of your company. You should make sure that the software can calculate. And that it can provide you with information about the residuals produced by each client of your company. And it also provides you with the overall situation of your residual management.
• Residual reporting. The second feature that a reliable CRM must include is the reporting feature. Keep in mind that a good CRM will be able to help your company in many more ways besides the residual management. But the reporting feature for this part consists of a general report. And the ability to create a report automatically for a segment of your clients or for each client individually.
• Profitability metrics. And the last essential segment that a CRM must include is a feature for the profitability metrics of your company. You will never need to calculate and manage anything manually. The software will take care of over 90% of the tasks required in the management of the residuals. So, you will be able to free up the time of your team and use that time for other important parts of your company.