Billing and invoicing software is the backbone of any subscription-based business revenue model.
The software facilitates customer onboarding, periodic invoicing & billing, revenue retention, regulatory compliance, and data security. A key feature of top billing software is the ability to accept online payments, allowing users to conveniently process transactions through various payment gateways and platforms.
Reliable recurring revenue and high customer retention rates, often cited as the key advantages of a subscription business model, are only possible with a dependable subscription billing software platform.
In this article, you will learn how to outline what your business needs from a billing platform, the essential features of top-quality billing software, and the steps to successfully set up the software for your business.
Read on to discover the best billing software for your business.
TL;DR
- A good understanding of the specific peculiarities of your business will help you outline your exact requirements and make it easier to filter out incompatible billing platforms.
- There are lots of subscription management software solutions on the market, and you need to consider the pricing, UX experience, customization options, customer support, and vendor reputation of each platform to ensure you are picking the right billing software for your business.
- Every member of your team who will be involved in operating or interacting with the billing platform should be engaged during the decision-making process, and you must test the software with real data before making a final decision.
Understanding the Needs of Your Subscription Business
A good understanding of the specific peculiarities of your business will help you outline your exact requirements and make it easier to filter out incompatible billing platforms.
The steps explained below will make it easy for you to curate a list of your requirements.
Step 1: Evaluating business size and complexity
Are you a small, niche-market-focused SaaS business that requires simple billing software with basic functionality, or a large enterprise that requires a sophisticated and scalable solution?
A small business will tend to have simpler pricing plans and less flexible billing options.
Large SaaS businesses tend to have high sales volumes and offer a wide range of pricing plans, payment methods, and contracts to different customer segments.
You must take a hard look at the current and projected scope of the size of your customer base to determine the level of sophistication you want from your billing software.
For example, a small subscription business will operate mainly on a self-serve basis wherecustomers manage their own subscriptions.
In contrast, a large subscription business with multiple corporate clients may provide dedicated support staff for each enterprise customer.
Large enterprises also often require support for different currencies across multiple geographical zones.
So, the size of your business and the scope of your billable services tend to determine the range of features you will require from your billing software.
Additionally, the ability to accept payments online is crucial for enhancing professionalism and customer convenience, allowing immediate payments via various methods such as credit cards and bank transfers.
Step 2: Identifying billing frequency and model
Recurring payments are made according to a billing cycle, which is a pre-agreed schedule that can be weekly, monthly, bi-annually, or annually.
The right billing intervals will depend on the cash flow cycle of your customers, and the revenue inflow requirements of your own business.
You must also decide on how to price your products or services, and you can pick from any of the major SaaS pricing models including flat-fee pricing, usage-based pricing, pay-as-you-go pricing, freemium pricing, and hybrid pricing.
Each pricing model has its advantages and limitations. One way to empirically identify the best pricing model for your business is to experiment with different pricing models till you find the approach that maximizes value for your customers and cash inflow for you. Additionally, incorporating automated payment reminders can significantly enhance the efficiency of your billing process by prompting clients for timely payments.
Step 3: Considering future growth and scalability
You may consider expanding your line of products or services in the future and your billing software must be able to scale to accommodate the growth of your business.
There will also be the need to expand into new markets and capitalize on emerging marketing channels.
You want to select a platform that will be relevant for the long term because switching costs are high if the billing software you choose today can’t cope with your future needs.
Also, technology is evolving at a rapid pace, and many software tools fail to keep up, becoming obsolete to the detriment of businesses that rely on those platforms.
We recommend opting for billing software from a provider with a long and strong history to have a degree of confidence that it can support your growth.
Step 4: Assessing integration requirements with existing tools
Almost every business has CRM, ERP, and accounting software, as well as payment gateways that it relies on for effective business operations.
All these software platforms must share data with your billing platform to give you a bird’s eye view of the state of your business.
You must identify all the software tools and templates that make up your digital ecosystem and what is needed to integrate them with your incoming billing platform.
Can they connect seamlessly with your billing platform as supported third-party software apps or will you require a billing platform with robust API functionality?
Failures with software integration can lead to data collection errors and misleading analytics.
Step 5: Accounting Software Integration
When choosing the best invoicing software for your small business, it’s essential to consider accounting software integration. This feature allows you to streamline your financial management by connecting your invoicing software with your accounting software. With this integration, you can automatically sync your invoices, payments, and expenses, reducing the risk of errors and saving time.
Look for invoicing software that integrates with popular accounting software such as QuickBooks Online, Netsuite, or Avalara. This integration will enable you to:
- Automatically sync invoices and payments
- Track expenses and categorize them correctly
- Reconcile accounts and balance your books
- Generate financial reports and statements
By integrating your invoicing software with your accounting software, you can ensure that your financial management is accurate, efficient, and compliant with accounting standards.
Key Features to Look for in Billing Software
This is the phase where you translate your rough list of requirements into a solid outline of specific features that you want from your subscription management software.
Below are the core features every decent billing software platform should have.
Automated invoicing, recurring invoices,and payment processing
Your billing software solution must have built-in automated workflows for invoicing, recurring payments, revenue recognition, dunning, and regulatory compliance.
For example, Stax Bill lets you easily set up recurring billing cycles and automate the issuance of professional invoices.
It comes with pre-designed invoice templates, and multiple payment gateways, and supports various payment methods, including credit cards, ACH payments, digital wallets, wire transfers, and much more.
It also supports prorated billing, dunning management, and discounts.
Flexible subscription models and plan management
Customers expect self-service functionality that lets them easily manage their subscription plans and online payments without having to pick up the phone or email your customer service reps.
Empowering your customers and giving them more flexibility during the invoicing process will boost customer satisfaction and brand loyalty.
With Stax Bill, you get a client portal where your users can manage recurring invoices and their subscriptions and upgrade, downgrade, or cancel their plans from a single interface.
Dunning management and revenue recovery features
Late payments can have an adverse effect on your cash flow, and luckily, dunning can help.
Dunning management encompasses all activities focused on reminding customers of upcoming payments, delinquent payments, failed transactions, and due bills in general.
For example, Stax Bill’s dunning management features will streamline the entire process and help you send automatic payment reminders for failed recurring payments and notices for upcoming charges.
Tax calculation and compliance tools
Automated compliance with GAAP (Generally Accepted Accounting Principles) sales tax documentation requirements is crucial for accurate revenue reporting and revenue recognition.
You may be handling thousands of subscription payments each month, and manually calculating the sales tax on each transaction is time-consuming and inefficient.
That’s in addition to other case-by-case billing circumstances such as add-ons, discounts, coupons, and custom subscription plans which influence your customer’s final payment fee.
Stax Bill will automatically calculate the sales tax on each transaction based on the geographical location of your customer or the country/state where your business is domiciled.
Detailed reporting and analytics
Without accurate and real-time tracking of key KPIs, you won’t be able to assess the success of your subscription business model.
As your billing software collects and processes customer payments, you must be able to monitor relevant subscription metrics to easily analyze business outcomes and correct what’s not working.
For example, Stax Bill comes with robust analytics and reporting tools for tracking metrics like customer churn rates, MRR (monthly recurring revenue), ARR (annual recurring revenue), CLTV (customer lifetime value), and more. Additionally, tracking outstanding invoices is crucial for effective cash flow management, allowing businesses to access funds tied up in these invoices through invoicing financing features.
Security and data protection features
You are obliged to comply with PCI-DSS (Payment Card Industry Data Security Standards) and GDPR (General Data Protection Regulation) requirements for securely processing and storing payment card data and personal customer data.
You must also implement robust data encryption methods and access control mechanisms to protect customer data vaults from unauthorized access.
A platform like Stax Bill is designed with full PCI-DSS compliance in mind and it comes with advanced data encryption features to ensure your customer data is well protected.
Factors to Consider When Comparing Billing Software Providers
There are lots of subscription management software solutions on the market with many of the features we highlighted in the preceding section, so how do pick the right billing software for your business?
The factors explored below will aid your decision-making process.
Pricing
Price is one of the most important factors when evaluating billing software options.
The cost of the platform must be within your budget, while also having all or most of the features you need to manage your billing payments workflow.
You’ll need to invest both time and money to implement the new system in your organization and to train your staff on the platform.
You must also consider the future costs associated with increased usage due to business growth and new sales channels.
All these costs must be collated to get an accurate idea of what each platform will cost you.
Cost-Benefit Analysis
When evaluating the best invoicing software for your small business, it’s crucial to conduct a cost-benefit analysis. This analysis will help you determine whether the benefits of the software outweigh the costs.
Consider the following costs:
- Monthly or annual subscription fees
- Payment processing fees
- Additional features or add-ons
- Support and training costs
On the other hand, consider the benefits:
- Increased efficiency and productivity
- Improved cash flow and payment collection
- Enhanced customer experience and satisfaction
- Reduced errors and discrepancies
- Scalability and flexibility
By weighing the costs against the benefits, you can make an informed decision about which invoicing software is best for your small business.
Ease of use and user interface
An intuitive UX interface will enable an excellent customer experience and ensure you don’t lose them to your competitors.
In all customer touchpoints throughout the billing cycle from the checkout page and payments terminal to the customer portal for managing ongoing subscriptions, the experience must be personalized, seamless, and on-brand.
The need for excellent UX is not limited to your customers; your staff also requires a user-friendly interface for managing the backend of your billing platform.
The surest way to test usability is via a software demo. You can also check out software review sites to see what current and former users have to say about the platform.
Customer support and service levels
Depending on the subscription management software provider, some offer DIY customer service that usually includes online knowledgebase, FAQs, chatbots, and email customer service.
The best companies offer all that and 24/7 phone, chat, and social media customer support.
As a bare minimum, you will want a platform that offers proactive customer support—anticipates user challenges, and designs its platform with onboarding tips and process prompts to guide customers.
Then, based on your preferred level of support, you can decide between a provider offering DIY customer service or another offering more comprehensive customer support services.
That choice is crucial because sophisticated customer support can sometimes mean higher subscription fees.
Of course, if you run a large enterprise, you will almost certainly require enhanced customer support services.
Customization options and flexibility
Your billing platform should ideally come with the features and services you need to customize the software to fit your specific billing workflows.
For example, research shows that 77% of digital service businesses offer multiple types of subscription plans and you may want to do the same in your business.
Your billing platform must be customizable, and you should be able to modify the default settings to achieve the following as a bare minimum:
- Modern pricing models
- Discount and coupon campaigns
- Free trial periods and other types of flexible payment schedules
- Tiered pricing structures
- Proration functionality for upgrades/downgrades during an ongoing billing cycle
- Local tax compliance
- Custom analytics reports
Integration with other business tools
Your billing software won’t operate in isolation, it will need data from other business management mobile apps and software platforms for effective revenue reporting and data analysis.
The billing platforms that make your shortlist must be those that support a wide range of third-party tools and have been proven to integrate seamlessly with your existing business apps.
As we mentioned earlier in the article, you may also need a billing software solution with API (application programming interface) support if you have custom-built in-house software tools that must be integrated with your billing platform.
Vendor reputation and customer reviews
Take as much time as you need to examine case studies and testimonials on the website of each billing software provider to get an idea of the types of subscription businesses that use the platform and its strongest features.
This is important because certain billing platforms are optimized for niche industries, eCommerce, or businesses of a particular size, and the software may not be the right solution for your own business.
You should also check sites like G2, Capterra, and GetApp to see the feedback of customers on the quality and relevance of each billing platform.
Tips for a Smooth Implementation Process
The following best practices will help you select and implement the best billing software for your specific business needs.
Involve key stakeholders in the selection process
Every member of your team who will be involved in operating or interacting with the billing platform in one way or the other must be engaged during the decision-making process.
Ideally, you want to make a list and group individuals based on their level of involvement and the weight of their opinions.
Bringing your team on board from the onset makes it easier to get their buy-in and support when the time comes to train them on the software and integrate the new platform into your tech stack.
Test the software with real data before the final purchase decision
You should request a demo or take advantage of the free trial period if that option exists, and test drive the software to see how it performs when integrated into your existing digital ecosystem.
You must let the relevant stakeholders—tech, security, finance, auditing, and even select customers—try out the platform and provide unfiltered feedback.
Once a billing platform stands out, take note of it. Outline the features that make it perfectly suited to your needs and an improvement on your existing processes.
You should have a shortlist of three to five vendors after some time, then you can compare them based on projected ROI.
The platform with the best ROI may be the right software for your business.
Provide adequate training for staff
At this point, you should have selected a suitable billing software solution for your business.
However, you often can’t just introduce the new system without a workflow shift in your company.
Your staff and other third-party end users must be trained on the new platform and this onboarding program may be carried out with the assistance of your software provider.
Of course, a positive company culture and full buy-in from your staff are essential if the training is going to be effective.
You also want to organize the training program right before your organization starts using the new software to ensure they don’t forget their training due to delayed implementation.
Monitor the transition and troubleshoot potential issues
When implementing your new billing software solution, you should appoint someone to supervise the process and serve as a point of contact for requesting support needed for troubleshooting issues that often pop up in such situations.
You may also want to take a gradual approach by starting small and giving your team time to adjust to the platform and create internal best practices for the new billing process before authorizing company-wide implementation.
Common Mistakes to Avoid When Choosing Billing Software
Focusing solely on price without considering long-term needs
Some business owners have this misguided belief that only the cheapest platform can offer the best value for money.
However, that’s hardly ever the case because most platforms that appear cheap initially can get expensive really quickly when you start paying for add-ons and other hidden fees.
Overlooking integration and compatibility with other systems
One of the most important requirements for your online invoicing and billing platform is that it must integrate seamlessly with the tools that make up your existing digital ecosystem.
Failure to choose a billing management tool that plays well with your current tech stack due to price considerations or any other short-sighted reason will only lead to technical glitches and data transfer pain down the line.
Choosing a solution that doesn’t scale with your business
Not taking a proactive approach by selecting a billing software that will evolve with your growing business on considerations of cost or the belief that you will switch to another platform in the future can be dangerous.
Your transaction volumes can scale up faster than you can predict, and when that happens, an inadequate billing platform will cause payment failures and platform crashes, which will only lead to customer dissatisfaction and reputational damage.
Making the Final Decision
After evaluating the top billing software options, it’s time to make the final decision. Consider the following factors:
- Features and functionality: Does the software meet your business needs and requirements?
- Cost and pricing: Is the software affordable and within your budget?
- Integration and compatibility: Does the software integrate with your accounting software and other tools?
- Customer support and training: Is the software provider offering adequate support and training?
- Scalability and flexibility: Can the software grow with your business and adapt to changing needs?
By considering these factors, you can make an informed decision and choose the best invoicing software for your small business.
Compare Top Billing Software Options
When comparing top billing software options, consider the following factors:
- Features and functionality: What features does each software offer, and which ones are essential for your business?
- Cost and pricing: What are the subscription fees, payment processing fees, and additional costs for each software?
- Integration and compatibility: Which software integrates with your accounting software and other tools?
- Customer support and training: What kind of support and training does each software provider offer?
- Scalability and flexibility: Can each software grow with your business and adapt to changing needs?
By comparing these factors, you can determine which software is best suited for your small business.
Try Before You Buy
Before committing to a billing software, it’s essential to try before you buy. Look for software providers that offer:
- Free trials: Test the software for a limited period to see if it meets your needs.
- Demo versions: Get a sneak peek into the software’s features and functionality.
- Test accounts: Create a test account to see how the software works in real time.
By trying before you buy, you can ensure that the software is a good fit for your small business and avoid costly mistakes.
It’s Time You Choose The Perfect Billing Software for Your Business
The money you are paying for your billing software solution is more of an investment than an expense because that’s what will facilitate the recurring cash flow your business needs to be sustainable.
So, you must embrace the knowledge you have gained from this article and use it to select the best invoicing software for the unique needs of your business.
Stax Bill is an excellent cloud-based solution that lets you seamlessly issue automated invoices and offer a wide range of subscription plans to your customers.
It is designed to integrate seamlessly with all the popular business management software apps, and your data is protected by industry-leading security measures.
