A study by the Global Banking & Finance Review site showed that 70% of business executives believe recurring subscription billing is the future of their industries.
Naturally, every business, including yours, will want to tap into this key driver of business growth.
However, to start implementing billing subscription models in your business or SaaS platform, you need to sign up with a billing platform to help accept and process recurring payments.
The issue is that there are several billing platforms on the market, and choosing between so many vendors can get confusing really quickly.
Luckily, we know quite a lot about billing platforms, and in this article, we will show you how to select the right billing software for your business or SaaS company.
Understanding Your Business Needs
Taking the time to pinpoint the specific invoicing & payment processing requirements of your business will help you narrow down the critical features you need from a billing platform.
Here is a three-step process to help you identify your business needs:
Step 1: Assess your current billing process and pain points
Your billing software must cater to the unique needs of your business.
Picking a billing platform simply because it’s popular or used by a business owner acquaintance can end up being a very costly mistake.
What works for one business may not work for another.
So, ask the following questions:
- How do you currently accept and process invoice payments?
- What payment methods do you offer to your customers?
- Are there other payment methods being constantly requested by your customers?
- What are your growth projections for your business?
- How large is your current monthly transaction volume?
- What are your current billing & invoicing pain points?
- Do you require integration with your existing business operations software platforms?
The answers you get will give you a clear picture of your ideal billing and invoicing software.
Step 2: Identify specific features required for your business model
Once you have identified your business requirements, the next step is to pinpoint the essential features your billing software must possess to meet those requirements.
At the bare minimum, you want your software to offer the following:
- Automated invoicing
- Multiple pricing models
- Subscription and churn management
- Dunning automation
- Analytics and reporting
- Support for third-party integrations
- 24/7 customer service
Also, your company may be in an industry where a generic billing platform will be an inadequate solution for your needs.
This is particularly applicable to business in the medical and legal industries with unique regulatory and reporting standards.
If you require such a custom solution, it’s best to reach out to other business owners in the industry niche, since there should ideally be an existing well-regarded industry-focused billing platform.
Step 3: Consider scalability for future growth
You shouldn’t opt for a billing software platform simply because it meets your present business needs. It’s best to go for a platform that can also accommodate your evolving requirements as your business grows with time.
Otherwise, you might find yourself stuck with a billing platform that can no longer meet the needs of your rapidly growing business.
Such a scenario can lead to platform downtimes, data errors, and other issues that will be detrimental and disruptive to your business.
And when you do eventually switch to a better and more robust platform, the damage would have already been done.
Key Features to Look for in a Billing Platform
We briefly highlighted these features in the preceding section and we will go into them in detail in this section.
Customization and flexibility
Your billing platform should let you configure your billing system to support your business model and satisfy the needs of your customers.
For example, Stax Bill lets you do things like customize your invoices to match company branding, offer flexible pricing options to specific customer groups, and upgrade or downgrade customer subscriptions according to their needs and preferences.
Integration capabilities with existing systems
It’s almost certain you already have an existing ecosystem of business software applications you rely on to run your business.
So you’ll want to make sure your subscription billing management platform seamlessly integrates with these systems to prevent errors when data is being moved across different platforms and ensure your reporting and analytics are valid.
Stax Bill is one such billing management software tool. It is designed to unify your CRM, ERP, order management, and other relevant software into one seamless business operations workflow.
It will provide you with an API to link your existing systems and a single dashboard picture of your billing and invoicing operations.
Automated billing and invoicing
Your billing software must effortlessly facilitate secure invoicing, tax calculations, payment processing, and revenue recognition.
The whole process should be automated, although, there should still be provision for collecting and recording the occasional manual invoice.
For example, Stax Bill streamlines the entire billing and invoicing cycle and it lets you offer varied subscription billing options to your customers, including fixed, usage-based, one-time, volume, and tiered pricing models.
Support for multiple payment methods and currencies
Research shows that 42% of buyers in the U.S. will abandon a purchase if their preferred method of payment is not offered.
So, ensuring your billing platform supports the preferred payment methods of your customers can be the difference between converting a hard-won lead into a paying customer and losing that potential buyer to your competitors.
With Stax Bill, you can pick from an extensive list of payment methods and currencies for businesses selling products or offering services to an international customer base.
Compliance with industry regulations
Compliance with regulatory standards and safeguarding your SaaS platform against fraud must be a top priority for your business.
Your customers trust you with their data and you must ensure your billing platform has robust security protocols like high-grade encryption and extensive fraud prevention mechanisms to protect sensitive financial information.
Fortunately, you can use compliance with industry standards like PCI-DSS, GDPR, and ASC 606 to filter out dangerous billing platforms.
Detailed reporting and analytics
Getting all-around visibility and real-time analytics insights into your subscription workflow will help you track the usage patterns and preferences of your customers in each billing lifecycle.
For example, the Stax Bill invoicing & billing platform comes with a built-in dashboard that provides users with a 360-degree view of their subscribers and ongoing subscriptions via charts, tables, graphs, and other visual data mediums.
You can track recurring revenue metrics like customer churn, average monthly/weekly revenues, product upsells, percentage of overdue invoices, rate of failed payments, subscriber growth rate, and much more.
Evaluating Platform Usability
Even after you have found a billing platform that has all the features required to facilitate your billing and invoicing workflow, you must also ensure that the platform will be a perfect fit with the way you currently run your business.
Here are three things to consider:
User interface and ease of use
A platform that isn’t intuitive or is overly complex for your team to use will only be underutilized.
Your team members won’t be enthusiastic about using the platform, which can lead to errors and inefficiencies.
To prevent such a scenario, check to see that the platform has a simple interface that is easy to navigate.
It should also have key subscription management functionalities like customizable templates and automated revenue management that will make everyone’s life much easier.
Implementation and onboarding process
If you are moving your data from an existing invoicing and billing platform to a new and more robust platform, you want to ensure that the new provider offers adequate support during the data transfer and platform implementation process.
Some providers will leave you to do the data transfer and implementation process yourself, while others will provide a dedicated agent to guide you through the process.
Depending on the size of your organization, detailed online documentation coupled with a responsive customer support staff may just be enough.
Availability of customer support and training resources
Issues with your billing software may crop up unexpectedly and you will need prompt response from your provider to troubleshoot the problem before it severely impacts your business operations.
So, you want a provider that offers robust and reliable customer support services.
Look for software that offers multiple customer support channels, including:
- Phone
- Live chat
- Online documentation
- Dedicated account manager
- Knowledge base articles
- Training resources
Pricing Models and Cost Considerations
Billing platforms are offered at different price points, each with its own distinct package of features and services.
The cheapest or the most expensive platform may not necessarily be the best solution for your business.
So, once you have confirmed that a platform has all the right features and has met your platform usability requirements, use the following three factors to consider whether it’s also the right fit for your budget and cash flow reality.
Pricing structure
Billing platform vendors use a wide variety of billing models to price the services they offer to their users.
You must evaluate each platform to see if its pricing model is the right fit for your cash flow cycle.
For example, a usage-based billing model may be preferable to a monthly subscription model if you run a seasonal business where you only collect account receivables during specific times of the year.
Here are some of the most common pricing models:
- Freemium: here basic features on the billing platform are available for free, but you must pay to access advanced features.
- Subscription-based: with this model the vendor charges a fixed monthly/annual fee for use of its billing platform.
- Usage-based: here you are only charged for the number of billing invoices and related transactions generated over a period.
- One-time payment: with this model, you only pay once for lifetime access to the billing platform and it’s often used for on-premises software, which comes with its own limitations.
You should also consider the subscription fee.
Check to see that it is a fair price for the features being offered under that subscription plan.
Hidden costs
Many software subscription businesses are not entirely upfront about the true cost of their platforms.
They will offer a nominal subscription fee, and then add other small charges in the contract for specific and often unavoidable services.
This practice can make their billing platform appear much cheaper than it really is, which can come as a shock when the payment for add-ons is enforced.
So, you must carefully read the fine print and watch out for the following charges:
- PCI compliance fees
- Statement fees
- Monthly minimum fees
- Monthly settlement fee
- Authorization fees
- Early termination fees
ROI analysis: balancing cost with the value delivered
You know the benefits of the billing platform on offer but how will you know you are getting good value for your money?
The answer is to calculate your projected ROI (return on investment) from investing in the billing platform.
The ROI can be calculated by dividing the projected net return on investment by the cost of investment and multiplying the result by 100.
If you get a positive figure then the investment may be worth it, and if not, you should consider going for a less costly platform.
Final Vendor Evaluation Criteria
At this point, you must have evaluated many billing platform options for compatibility with your feature package, platform usability, and pricing structure requirements.
Now is the time to finalize your decision.
Here are four criteria you can use to trim your list, and once you find the perfect platform, you can then subscribe or reach out to the vendor to negotiate a custom pricing structure.
Vendor reputation and track record in the industry
You should check out online review sites like TrustRadius, G2, Gartner, and Capterra to see the overarching sentiment among users and industry influencers on the quality and reliability of each platform.
Some review sites even make side-by-side comparisons that let you weigh the features, strengths, and weaknesses of different billing platforms against each other.
The right platform will have good reviews, while also being affordable for your budget.
Case studies and customer testimonials
Credible feedback from actual customers is the most reliable way to gauge the quality and suitability of a billing software platform for your specific business needs.
You can trust what other customers have to say since they won’t vouch for a platform that is hurting their business.
Luckily, many vendors have Case Study pages with stories from past and present customers that can give you insight into what fellow users have to say about the platform.
Availability of product demos or free trials
It’s a good idea to have your staff try out a platform either during the free trial period or via a demo to see if it fits seamlessly with your sales and revenue collection workflow.
The feedback from your team will be crucial since you need their complete buy-in if you don’t want the platform to be underutilized.
Ability to support future growth and product updates
As mentioned earlier, your billing platform must be scalable to meet the need of a larger customer base and more complex billing processes in the future without any decline in functionality and performance.
The vendor must also guarantee regular product updates to keep your platform in line with current industry feature trends, and ensure your security infrastructure is always ahead of cyber threats.
It’s Time To Choose Your Ideal Billing Software
The perfect billing platform will automate invoicing, protect your customer data, offer flexible subscription billing options, and provide a seamless customer experience.
So, get on the internet right now and start checking the websites of the many billing software options out there for their platform capabilities using the guidelines outlined in this article till you find a billing solution that meets your specific needs perfectly.
