Category: Business Tips

Fact: 27% of auto repair shop owners and managers plan to improve efficiency and productivity. To do so, they require efficient, streamlined solutions to manage operations and meet the high expectations of today’s customers.

Auto repair businesses juggle inventory management, scheduling, labor hours, and invoices. Automated billing software simplifies these processes by moving shops from manual paperwork to a fully integrated, digital workflow. 

Consider these 12 essential features in your auto repair billing software when you’re ready to make the shift.

TL;DR

• Auto repair shops face cash flow stress due to poor accounts receivable (AR) visibility and other payment-related problems.
• Repair shops can invest in auto repair billing software to streamline invoicing, collections, and follow-ups, reduce administrative workload, and accelerate cash flow.
• Top billing software features to look for: user-friendly interface, automated invoicing, customer history tracking, accounting software integration, inventory management, customizable reports, mobile accessibility, regulatory compliance, communication, security, scalability, and support.

The Case for Billing Software in Auto Repair Shops

33% of auto repair shops experience cash flow stress due to a lack of AR visibility, while 20% have non-payment difficulties.

Managers and mechanics deal with concurrent repair tasks, varying payment schedules, parts ordering, and labor tracking. Things can easily slip through the cracks with manual billing and invoicing. 

The core problem: Lack of AR visibility

Manually tracking payments creates a lag in identifying overdue invoices and discrepancies. This lack of AR visibility forces staff to sift through countless records, delaying follow-ups and extending collections.

Completed jobs don’t guarantee immediate payment. Thus, the repair shop can’t access the revenue it needs to pay for parts, labor, and other operational costs. Their resources—time, staff, and energy—all go into collection efforts rather than on strategic growth activities.

Inadequate AR monitoring can paralyze teams with financial stress and the never-ending process of collecting payments.

Non-payment compounds the problem

Non-payment can freeze working capital. The auto repair shop may have to put its services on hold until funds are secured.

If clients disregard payment requests, AR teams have no choice but to write off invoices. That, unfortunately, is a direct revenue loss. The longer a repair job remains unpaid, the higher the risk of it becoming bad debt.

Auto repair billing software can automate all these billing-related tasks.

Repair shops can streamline invoicing, collections, and follow-ups to reduce administrative workload and accelerate cash flow. The next section outlines the top auto repair billing software features to help enhance your billing and payment management.

12 Core Features to Look For in Auto Repair Billing Software

Here’s a breakdown of the most important features to make your billing software work for your automotive business.

1. User-friendly interface

You and your team are already pressed for time. The last thing anyone needs is a complex, error-prone billing system that adds to the workload.

An intuitive, user-friendly setup helps mechanics and front-office staff use the system without a steep learning curve. It’s a must for small shops with limited IT resources to save on extensive training and onboarding time.

2. Automated invoicing and payments

Automation can cut down time spent on error-prone, manual tasks—from 1 to 5 hours to less than an hour for 34.8% of users. With this feature, auto repair invoice software allows you to create and send professional auto repair invoices in seconds. 

Integration with payment gateways is also a must-have feature if you intend to accept online payments and speed up collections. For Stax Bill, its automation also includes dunning features to follow up overdue payments without requiring additional effort from your team.

3. Customer and vehicle history tracking

Some auto repair billing software like Stax Bill can store information (e.g., last service date, car details) about recurring clients. Each staff member—whether in the front office or out on the shop floor—can pull up past car service records.

Even if different staff members handle repairs at different phases, service quality and communication won’t suffer. You may also set up automated appointment reminders for maintenance or service intervals like oil changes or tire rotations to boost retention.

4. Integration with accounting software

Syncing billing software with accounting platforms like QuickBooks or Xero can help reduce double-entry work and minimize errors. For every sent invoice or processed payment, the system automatically exports the financial data into your accounting system.

Prioritize solutions that feature integrations with your existing systems. This is key to ensuring smooth data synchronization and improving coordination between different departments within the company.

5. Parts and inventory management

Good auto repair billing software lets you see real-time inventory levels, so you won’t run out of vehicle parts and supplies mid-repair. You can account for and accurately bill all materials used.

These advanced features help maintain financial control by preventing losses from inventory discrepancies and improving budgeting practices.

6. Customizable reports and analytics

Customizable reporting helps you break down revenue by different repair types (engine diagnostics, brake services, etc.) or identify trends like the busiest service bays.

These professional reports and analytics can help you expand high-demand services or invest additional resources for underperforming bays.

7. Mobile accessibility

Billing features should extend beyond the shop if you offer mobile services. This way, mobile mechanics can access client history, update job statuses, and send invoices in the field.

Mobile accessibility allows staff to connect with clients via text, email, or in-app messaging. This constant communication helps keep the customer in the loop and fosters trust.

8. Compliance with local tax laws

Opt for auto repair billing software that calculates and applies taxes based on local regulations. Suppose you operate in a state that mandates taxes on parts but not labor; the software should separate those charges for you.

Stay in good standing with tax authorities and avoid costly penalties through these built-in compliance features.

9. Customer communication tools

90% of consumers believe companies should respect their communication preferences.

How does your preferred auto repair billing software send professional invoices, reminders, or updates? The platform’s integrated communication tools must reflect your market’s preferences to nurture long-term relationships.

10. Security and data protection

Auto repair shops handle credit card information, vehicle details, and personal client data—a tempting prey for cybercriminals.

Look for auto repair software with robust data encryption to keep data secure and meet regulatory standards like PCI-DSS. Staying compliant can save you from hefty fines and uphold your business reputation.

11. Scalability

Your billing software must grow with your auto repair business. You’d want to avoid switching systems every time you open new locations or handle more repairs.

Cloud-based storage, unlimited invoicing, comprehensive reporting tools, and flexible user management are some scalable functionalities to look for.

12. Support and training

You can always count on the top software providers, whether through chat, phone call, or an intuitive DIY knowledge base.

Don’t forget to check reviews from other auto repair shops or businesses in the same industry. Raw, unfiltered responses can help you gauge how effective the support is and whether the software meets your specific requirements.

Auto Repair Billing Software FAQs

Get the answers to the most frequently asked questions to maximize your software investment.

What size of auto repair shop can benefit from billing software?

Automotive repair software benefits shops of all sizes. However, larger companies with over 10 bays or 20 employees may require important features for inventory management and scalability.

How much does auto repair billing software cost?

Some billing software uses tiered pricing based on features or users or pay-per-use models based on transaction volume. Stax Bill offers a flat rate starting at $499 per month for auto repair shops with up to $85k in monthly billings.

Can the software handle both one-time repairs and recurring maintenance?

Yes, billing systems like Stax Bill can handle one-off repairs and recurring services. You can send auto repair invoices using automated proration and customizable templates to maintain billing consistency.

How secure is the customer data stored in the software?

Billing software that employs advanced encryption protocols and follows PCI-DSS and other standards can protect customer data. Encrypted databases secure data at rest, so information is unreadable even if attackers gain access to the system. 

What should I do if I need to switch to a different billing system?

Auto repair shop software like Stax Bill offers built-in migration tools, integrations, and hands-on support to make transitions smoother. Before switching, assess whether the new system can offer the same to avoid disruption to your operations.

Scale Your Auto Repair Business with Stax Bill

Auto repair billing software enhances AR visibility, reduces errors, and speeds up payment cycles with the right features. This asset can help eliminate the risk of human errors and reduce time spent on administrative tasks. 

Stax Bill offers all these features with zero hidden costs. Request a free demo here to get paid faster.

From 2024 to 2031, the global dental practice management software market is projected to grow at a 9.91% CAGR. One integral feature of this software is dental billing—the key driver of financial stability and operational efficiency in dental labs.

Billing software solutions primarily support the dental lab’s billing and invoicing. However, they also help labs manage dental cases and integrate with lab management solutions to streamline patient case tracking, client communication, and workflow automation. 

In this article, we’ll go over the top 8 software features to look for to optimize your lab’s dental billing and operations.

TL;DR

• Top dental lab billing solution features enable dental lab professionals to focus more on their key tasks while ensuring transparent billing processes. 
• Features to automate workflows and reduce manual data entry: customizable billing templates, LMS integration, automated payment processing, and advanced reporting capabilities.
• Features for an efficient billing experience: self-service client portals, regulatory compliance, platform scalability, and responsive customer support.

What is Dental Lab Software?

Dental lab software is a specialized tool designed to help dental laboratories manage their operations more efficiently. As a web-enabled application, it allows labs to streamline their workflows, improve productivity, and enhance customer satisfaction. This type of software typically includes features such as case management, digital workflow integration, client communication, and comprehensive reporting and analytics.

By automating many of the manual tasks associated with lab management, this software significantly reduces errors and increases efficiency. For instance, it can handle everything from case entry to tracking, ensuring that each step of the process is meticulously documented and easily accessible. This not only saves time but also ensures that dental labs can deliver high-quality results consistently.

Moreover, dental lab software supports both digital and analog cases, making it versatile enough to meet the diverse needs of modern dental labs. Whether you’re dealing with traditional impressions or digital files, this software can help you manage operations seamlessly, ensuring that you can focus on what you do best—creating exceptional dental products.

8 Core Features of Reliable Dental Billing Software Solutions

Instead of spending hours on paperwork, well-structured billing systems free up time for lab managers to spend on their key tasks, such as ensuring high quality of work.

Below are the billing software features that can make this happen:

1. Customizable billing templates

77% of dental professionals invest in solutions to reduce the burden of paperwork and manual data entry.

With billing software, you only need to prepare a customizable template once, and you won’t have to enter data over and over. It can spare you the headaches of dealing with costly human errors, sluggish billing processes, and insufficient funds.

These standardized templates help you fill in data fields faster for every invoice. These data points include patient details, phone numbers, service descriptions, itemized costs, payment terms, and insurance coverage.

Lab management software like Stax Bill can help you set up recurring payments or schedule future payments in advance for such cases. No more missed payments or constant follow-ups.

2. Integration with laboratory management software

Billing and lab management software (LMS) integrations help alleviate dental office inefficiencies by connecting and automating your digital workflows. This includes important tasks, such as scheduling appointments, sending reminders, managing case entries, and processing payments.

This integration allows for real-time data sharing, too. You don’t have to transfer information from your management system to your billing platform manually. Thus, there’s less time between service delivery and billing, accelerating your revenue cycle.

Additionally, the integration allows labs to receive digital prescriptions, facilitating real-time tracking of orders and improving accuracy.

As soon as the LMS completes a case, the software generates the corresponding invoice. You can send it out almost immediately instead of waiting months to bill.

3. Automated payment processing

Automating billing and payment processing tasks can help dental providers save $2.6 billion annually. 

First off, billing systems often integrate with payment processors. It allows flexible payment methods, including credit cards, ACH transfers, and mobile payments. It’s easier for dental clinics to settle their bills, and labs don’t have to wait for checks to clear.

Automation also extends to follow-ups on late payments and overdue balances. The system can automatically send real-time notifications to clients about their outstanding bills.

Instream, a dental laboratory tools and services provider, stumbled into these problems pre-automation. They required an entire week for one dedicated resource to finish their monthly billing.

After integrating payment administration with Stax Bill, they reduced work time by 80% and scaled processes without adding labor.

4. Advanced reporting and analytics for digital workflow

On the backend, dental lab billing software provides valuable data insights. Lab managers can analyze trends, track service popularity, and identify potential billing process bottlenecks to strategize for growth. Additionally, digital prescriptions can be tracked and analyzed, providing valuable insights into prescription trends and accuracy.

Your billing solution must include some basic reports, such as:

• Monthly revenue – income over a specific period to track revenue patterns and peak business periods
• Client activity – detailed client interactions, including orders placed, payments received, and service utilization
• Outstanding invoices – overdue payment monitoring to optimize collection efforts and cash flow management

Integration with third-party platforms like Quickbooks (accounting) and Seazona can offer more in-depth analytics. Multiple data sources can help generate detailed reports and advance your dental practices.

5. Self-service client portals

If your clients are frustrated by slow responses or limited information access, they may seek alternatives elsewhere. Cloud-based, paperless can help enhance the patient experience by providing immediate access to essential services.

Instream, an online dental exchange service and payment solution, for instance, leveraged Stax Bill’s self-service portal. Customers can now register, track orders, process payments, access documents, manage account information, and view billing history in one place.

Thanks to the portal, Instream can also gather client data and use it to automate their market targeting processes. (That used to take up a lot of their time!)

6. Compliance with industry regulations

Non-compliance penalties can hurt your bottom line and reputation. Opt for dental billing solutions that facilitate compliance, particularly with these key regulations:

• Payment Card Industry Data Security Standard (PCI DSS) – mandates secure handling of client’s credit card information to protect against fraud and data breaches
• Health Insurance Portability and Accountability Act (HIPAA) – sets standards for protecting patient health information

Prioritize solutions that simplify compliance, like Stax Bill, which bundles HIPAA-compliant software into its subscription. Plus, it offers a user-friendly, third-party PCI compliance dashboard to help guide you through your annual security checks.

7. Scalability and flexibility

As you expand your client base or service offerings, so do the demands on your software. Check the platform’s maximum user capacity and if upgrades are available for larger teams. 

Don’t overlook your hardware requirements. Ensure your solution is compatible with barcode scanners, card readers, terminals, and 3D printers—especially if you haven’t tapped into these technologies yet. 

Consider Stax Bill: it offers well-integrated software and free hardware with your subscription to support your lab’s scalability down the line.

8. Customer support and training resources

Research found that 67% of users expect customer ticket resolution within 3 hours. When billing or payment systems go down, how fast can your provider get you back up and running? 

Responsive customer support can help minimize disruption to your operations. It’s an advantage if they’re accessible in multiple channels like phone, email, live chat, and support tickets.

If you and your team can handle problems yourself, check their knowledge base. Self-service training resources like user manuals, FAQs, and video tutorials can help you resolve common problems without long wait times.

Additional Features to Enhance Operations

In addition to the core features, many dental lab software solutions offer additional functionalities to further enhance operations. These features are designed to provide labs with more control, better insights, and increased efficiency.

• Barcode Scanning: This feature allows labs to quickly and accurately track cases and materials. By scanning barcodes, you can instantly update the status of a case, reducing the risk of errors and ensuring that nothing gets lost in the process.

• Automated Reporting: With automated reporting, labs can gain real-time insights into their operations and performance. This feature generates detailed reports on various aspects of the lab’s activities, helping managers make informed decisions and identify areas for improvement.

• Customizable Workflows: Every dental lab has its unique processes and requirements. Customizable workflows enable labs to tailor their operations to meet specific needs, ensuring that the software adapts to the lab’s way of working rather than the other way around.

• Integration with Other Systems: Dental lab software can often integrate with other systems, such as accounting or customer relationship management (CRM) software. This integration ensures that all your data is connected and easily accessible, streamlining operations and improving overall efficiency.

Case Management

Effective case management is critical to the success of any dental lab. Dental lab software can help labs manage their cases more efficiently by providing a range of features designed to streamline the process.

Case Tracking: This feature allows labs to track the status of each case in real-time. From the moment a case is received to its final delivery, every step is documented and easily accessible. This ensures that nothing falls through the cracks and that each case is handled with the utmost care.

Comprehensive Searching: Finding specific cases or information can be a time-consuming task. With comprehensive searching capabilities, dental lab software enables labs to quickly and easily locate the information they need. Whether you’re looking for a particular case, client details, or specific data points, this feature makes it simple and efficient.

Digital Workflow Integration: Integrating case management with digital workflows streamlines the entire process and reduces errors. By connecting digital files and data directly to case management, labs can ensure that all information is accurate and up-to-date, improving overall efficiency and accuracy.

Digital Workflow Integration

Digital workflow integration is a key feature of many dental lab software solutions. It allows labs to seamlessly integrate their digital workflows with case management, streamlining processes and reducing errors.

Digital File Management: Managing and storing digital files, such as CAD/CAM designs and 3D models, is crucial for modern dental labs. Dental lab software provides robust digital file management capabilities, ensuring that all files are organized, easily accessible, and securely stored.

Automated Data Exchange: This feature enables labs to automatically exchange data with other systems, such as dental practices or suppliers. By automating data exchange, labs can reduce manual data entry, minimize errors, and ensure that all information is up-to-date.

Real-Time Collaboration: Effective communication and collaboration are essential for successful dental lab operations. With real-time collaboration features, dental lab software allows labs to work closely with dental practices and other stakeholders, improving communication and reducing the risk of errors.

Client Communication and Management

Effective client communication and management are critical to the success of any dental lab. Dental lab software can help labs manage their client relationships more efficiently by providing a range of features designed to enhance communication and streamline processes.

A crucial feature for managing workflows in a dental lab is the technician’s portal. This platform allows technicians to handle case entry, track progress, and integrate with other systems, thereby streamlining processes and enhancing business efficiency.

Client Portal: A client portal allows clients to access their case information and track the status of their cases in real-time. This feature provides clients with transparency and peace of mind, knowing that they can check on their cases whenever they need to.

Automated Communication: Keeping clients informed and updated is essential for maintaining strong relationships. Automated communication features enable labs to send notifications and updates to clients automatically, ensuring that they are always in the loop.

Customizable Reporting: Providing clients with customized reports and insights into their cases and operations can help build trust and demonstrate the lab’s commitment to quality. Dental lab software allows labs to generate detailed, customized reports that meet the specific needs of each client.

By incorporating these features, dental lab software can significantly enhance client communication and management, leading to improved client satisfaction and stronger relationships.

Take Control of Your Dental Billing

Success in dentistry hinges on the right billing software for your dental lab. Customizable templates, LMS integration, automated payment processing, advanced reporting, client portals, regulatory compliance, scalability, and customer support are key features to consider if you plan to invest in one. 

Stax Bill offers all these functionalities with flat pricing—no hidden fees, no overages. Request a free demo to improve your case management and billing processes today.

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.

Sending out bills and collecting payments is at the essence of the recurring billing process but there is so much more to it than that. Billing at its best is about efficiency. It impacts time management, cash flow, and customer retention. If you’re looking to improve conversation rates on account upgrades, recurring billing solutions will make the customer experience even better and reduce and recurring revenue gaps.

TL;DR

Prioritize flexible customer experiences, security, and compliance when selecting a billing solution to support long-term business growth.

Automating your billing processes saves time, reduces errors, and boosts revenue by optimizing efficiency and scalability for your SaaS business.

A reliable recurring billing solution ensures better collections, minimizes involuntary churn, and integrates seamlessly with your tech stack for smoother operations.

Billing and invoicing are automated processes

Manual billing processes are sensible enough for the subscription business still in its infancy. With only a few customers, it’s easy to get invoices out accurately and on time each month. The more customers you get, the harder this becomes.

When customer numbers grow larger than your billing department can handle there are three options:

1. Keep hiring new accounts receivable (AR) personnel until the end of time (or at least until your building is bursting with them),
2. Resign yourself to sloppy, error-filled invoices. Or…
3. Automate.

Three guesses as to which option we recommend.

Automating billing practices can save up to forty hours of labor a month. That’s an entire working week’s worth of time your accounts receivable department can save on invoices.

For the mathematically inclined, that breaks down to 480 hours a year: time that a recurring billing business can use for more lucrative tasks, like projects that promote scale.

As Bill Gates put it, “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency.” Use your tech stack wisely and enjoy the way it allows you to grow and mature comfortably as a business.

You have plenty of collections assurance features in place

Subscription businesses everywhere know the pains of failed or late payments. It’s an issue that costs an estimated $145 billion dollars every year globally (or a little more than half of one Elon Musk, in case you needed context).

Here’s the tricky thing—the recurring billing model hinges on the support of repeat customers. When someone misses a payment or is late on their bills you don’t want to boot them. Particularly not when the missed payment was accidental.

Kicking out customers who accidentally missed a payment but would otherwise stick around creates involuntary churn, a phenomenon that can cost as much as 9% of your MRR. Talk about a recurring revenue killer.

Fortunately, a good recurring billing platform can help you out with that through:

• Automated credit card retries. More than half of all Americans have maxed out their credit cards at some point. With a credit card retry sequence, you check back in a couple of days and hopefully find that the problem worked itself out.
• Automated credit card updating. The average millennial has seventeen active subscriptions. With automated credit card updating, your payment gateway or recurring billing system works directly with the card company to keep the information current.
• Automate dunning communication. A subscription management service can also help subscription businesses collect missing payments through automated communications, sending out emails or texts that alert the customer to the situation, and tell them how to fix it.

These features can be used to automatically collect some missing payments while giving your AR department more time to pursue the other accounts that slipped through the cracks. The result? Better collections assurance on your recurring payments, and ultimately, more revenue.

Tech stack integration

We spoke earlier about how the idea of isolation amongst departments in the same business is largely imaginary. What happens in one place has ramifications in another. Tech stack integrations allow this relationship to be truly harmonious and productive.

A good automated billing platform cooperates seamlessly with your CRM, ERP, payment gateway, taxation software, and merchant of record system, making it easy to share data cleanly across departments.

By establishing a single source of truth for AR data, a good subscription management system makes it easier to share information without the fear of human error. Through this technology, the numbers can be accessed by whoever needs them, but changed only at the source, keeping the information clean and effective.

Your customers are empowered

Flexibility is at the core of the modern customer experience (CX). People want the option to be able to handle their own problems. In fact, recent surveys indicate more than 60% of consumers prefer self-service when it comes to handling simple tasks like an account adjustment or cancellation.

And why wouldn’t they, when the historical alternative has been to spend half an hour alternating between being on hold and bouncing around from agent to agent?

Self-service portals don’t mean taking a hands-off approach to customer service. When done right, it’s all about creating more options. The customer is empowered to choose their own adventure and your CX team is given significantly more time to focus on customers with real problems.

Now that small tasks are being handled through self-service portals, your team can focus on providing the customer experience that 66% of consumers say they are looking for.

A look at customer service-related stats shows a stark dichotomy between good and bad outcomes. Excellent customer service often leads to upsells, word-of-mouth recommendations, and higher retention numbers.

Even small instances of bad service, on the other hand, have a very different impact. A staggering 96% of people say they are willing to leave a business after an instance of poor service, with 30% expressing an eagerness to do so.

SaaS is a crowded marketplace. Many products, particularly from the average consumer’s perspective, are very similar in terms of qualities and features to their nearest competitor. It only takes a few clicks for a consumer to get set up with a new product and they’re happy to take that step when the situation demands it.

To that end, CX has become a key brand differentiator, and through self-service portals, your business can turn it into an art form.

So…how do I choose the best recurring billing solution for my business?

Okay, so I’ve waxed poetic long enough about how subscription management software can help your business perform at its best. That’s all great, you’re thinking, but how do I actually get started with reaping these benefits?!

Honestly, that’s a fair question. Today, it seems like subscription billing software solutions are a dime a dozen, and it’s difficult to find one that actually delivers on what it promises and helps you streamline your business operations and scale your SaaS business. If you aren’t sure where exactly to start, here are our tips to help make that process just a little bit easier. Let’s dive right in, shall we?

Know your business

First things first: make sure you have a deep understanding of your business model and strategy, as well as what kind of billing requirements you’ll need. This may sound a little obvious, but it will help you find the best recurring billing software for your needs. As a quick example, let’s say you’re planning on expanding to new geographical regions. If you are, it could make sense to choose a provider that has a localization strategy. With a good understanding of your workflows, revenue streams, subscription plans, you’ll be able to create a list of requirements that’ll put you in the best position possible to find a platform that works alongside you and won’t limit your scalability.

What should you look for in a recurring billing software software solution?

I think we’ve already looked at the most important features your future solution should have, here’s a quick summary of the most important features you should be on the lookout for when doing your research.

• Payment processing capabilities: I hope this goes without saying, but if you run a subscription-based business, you’ll need a recurring billing solution that seamlessly accepts a range of payment methods, including credit and debit cards, digital wallets, ACH, and any other payment methods that your customers regularly use. It should also integrate with your payment gateway, and its accounting software should offer revenue recognition to streamline how you recognize your revenue.
• Integration with existing systems: Again, make sure it can integrate flawlessly into your current tech stack, preferably through just one API that your future provider offers.
• Security and compliance: This is one that you should not gloss over: PCI DSS compliance (which stands for Payment Card Industry Data Security Standards) are standards put in place by card associations to ensure cardholder data is securely processed, transmitted, and stored. If you’re a subscription-based company, then you’re transmitting customer data, which means you will need to ensure PCI compliance. If not, and there’s a data breach, you’ll be fined—and most importantly, you’ll lose the trust of your customers and irrevocably damage your reputation.
• Customizable billing cycles and invoicing: Prorated billing is a must-have, as this ensures your customers will only be billed for the amount of time they’ve used your product during a billing cycle.
• Analytics and reporting: Make sure your provider will collect data insights from transactions made and visualize all that info. That way, you’ll quickly understand your analytics and be able to make data-driven decisions to grow your business—no gut feelings here!
• User experience & customer support: You want the user experience to be as frictionless as possible, so your customers can mange their subscription with ease (like renewals, upgrades, downgrades, or cancellations). Plus, find out what the customer support is like: how quickly can you get in touch with a real human if you have any issues? Do you have a dedicated account manager on hand?

Researching and Evaluating Potential Recurring Billing Software Solutions

Armed with this information, you’re well on your way to find a recurring billing solution that works for you. But first…you need to actually have a few options on your list. My recommendation is to start by talking with fellow peers in the same industry as you: ask them what they’re using, what their experiences are, and if they wish they could change anything. You can also do a Google search, but it’s important to see what real people have to say on third-party review sites, like G2 or Gartner.

After coming up with a shortlist, reach out to the companies and ask them for a free trial or demo. Keep in mind the factors we talked about earlier: how easy is the platform to use? Does it match the vision and projected growth trajectory of your business?

Next, ask them about pricing models, and don’t go easy on them. Is it a flat-rate, usage-based, or tiered system, or something completely different? It’s critical that you understand what the total cost of ownership is, since they may not build in costs like training fees, cancellation fees, maintenance costs, or additional support. If you don’t feel like you’re getting a straightforward answer from someone you’re talking to, it might be best to move on before you sink too much time (and money!) into that subscription billing provider.

At Stax Bill, we keep our pricing model simple, and are 100% transparent about our costs. Our subscription pricing model starts at just $199/month with no sneaky fees—just the way it should be.

Making the switch

So…the big moment has come. You’ve finally landed on the perfect recurring billing software solution for your business, and it’s time to make the transition. Congratulations!

Now, you’re not quite there yet, but your new provider should offer assistance with data migration and integrating their systems and payment gateways with your tech stack. Plus, they should offer support, training, and resources for you to get set up for success with their platform.

Once you’re ready to go, don’t forget to have regular discussions with your Account Manager on performance metrics and sales KPIs. That way, you’ll be able to scale your business and save costs on payment processing with your new provider. Don’t forget to stay open to feedback from all relevant stakeholders, and especially your customers; that way, you can work with your recurring billing provider to optimize your offerings to both attract and retain customers. You’ve got this!

Perfection at its most attainable

The beautiful thing about great recurring billing is that it’s so achievable. Good subscription management platforms automate busy work and make it much easier to focus on big-picture tasks. Remember, there’s no quest for perfection. This is Joseph Cambell’s “hero’s journey” we’re talking about here. It’s just a matter of picking the better tool.

Do that, and the benefits spread, both through your business and out toward the customers. It’s an easy choice with enormous benefits.

Contact us to learn more about our powerful recurring billing solutions at Stax Bill today.

Myth: Subscription management is all about billing.

Fact: SaaS companies live and breathe off of their customers. Subscriptions are at the heart of what they do, and billing is only one part of that. Good subscription management software recognizes this and acknowledges it in a way that allows businesses to integrate their tech stack, improve their collections process, and maximize efficiency. It goes beyond just automated billing, and includes data-driven insights to reduce cancellations and maximize retention, offer monetization opportunities, and even provide revenue forecasting. Sounds like a pipe dream? It doesn’t have to be. With the right all-in-one subscription management software, SaaS businesses and startups not only change the way they handle their billing but also can enjoy benefits felt company-wide. If you’re not sure where to start with finding a subscription management solution that offers automated recurring billing, revenue recognition, and more, we’ve got your back. This is the comprehensive guide on all-in-one subscription management solutions: what they are, their benefits, and how to choose the best one to help streamline your workflow. Let’s get started.

TL;DR 

• Subscription management software (also called recurring billing software) helps SaaS businesses automate the repetitive and manage the subscription plans that they offer to their customers. They include benefits like automated billing and invoicing, recurring payments management, analytics and reporting, and dunning management. 
• Some of the ways the subscription management solutions can support your business includes streamlining billing management, strengthening collections assurance, and empowering customers to do more themselves. 
• To choose the right provider, ensure they offer transparent pricing, PCI compliance, and can scale alongside you.

What’s an All-in-One Subscription Management Platform?

In a nutshell, subscription management software (also called recurring billing software) helps SaaS businesses automate the repetitive and manage the subscription plans that they offer to their customers: that includes sign-ups, upgrades, downgrades, renewals,and  cancellations, but also all customer data and recurring revenue. It should cover all things on subscription billing—including revenue recognition, which is a key accounting principle dictating when revenue recording is appropriate. However, an all-in-one platform goes beyond that to ensure strong financial health and a customer-centric approach. Here are the main benefits it should bring:

• Automated billing and invoicing: Yes, this should go without saying, but it’s worth repeating. At the very least, your billing solution provider should automatically generate and send invoices to customers, and support flexible billing cycles (like weekly, monthly, and annually). Its management features should include prorated billing, which allows you to fairly charge customers if they start using your platform in the middle of the billing cycle.
• Recurring payments and management: With recurring billing, companies can more accurately forecast revenue and improve cash flow. On the customer side, it can help improve retention by providing a frictionless billing experience. A great recurring billing platform is scalable, meaning as your business grows, the platform can grow right along with you. (More on the benefits of payments management later!)
• Analytics and reporting: To maximize sustainable growth, you need to know that what you’re doing works, not just hope for the best. That’s why a great all-in-one subscription management platform provides robust, real-time analytics that do a deep analysis into your SaaS metrics and provides actionable insights to improve your performance, help increase your customer lifecycle, and drive conversions.
• Dunning management: It’s important that you’re able to recover lost revenue from failed payments, which is where dunning management comes in. On top of that, it’s useful for reducing churn. By retrying failed payments, communicating with customers, and empowering them to make payment updates themselves, an all-in-one subscription billing platform can significantly improve your bottom line through dunning management.

By the way: this isn’t an exhaustive list. There are other features you should keep in mind, like CRM integrations to enhance customer management and customizable APIs so you can easily integrate your billing platform into other systems you use. But with these key features in mind, you should now have a sense of what to look for when selecting your potential subscription billing management providers!

5 Ways All-in-One Subscriptions Management Software Supports Your Business

Now that we’ve explained what exactly a fully-integrated subscriptions management solution is, let’s take a closer look at how it can help you meet your goals.

1. Billing management gets done in a fraction of the time

Yes, we’ve mentioned it before, but this point can’t be stressed enough: subscription management software makes billing better for the business and the customer.

On the customer-facing end of the equation, the benefit is consistency. Invoices are on time and accurate. Gone are the rough tickmarks of human error. Never again will Jane Smith get an invoice addressed to Jan Smit.

According to Salesforce, 75% of customers view consistency as one of the most important elements of their overall experience with a business—to the point that they will seek new providers if it isn’t there. For the business that values a low churn rate, this obviously isn’t ideal.

Subscription management software also frees a significant amount of time up for your billing department. The more customers a subscription business has, the more impractical it becomes to handle invoices manually.

Billing is a job that can take weeks to do by hand, but the best subscription management software distills the work down to an afternoon—or even less. Not only is this vital for a recurring billing business’s scalability, but it also allows team members to focus on tasks that will have a higher impact for the business.

Automating manual processes has been shown to result in savings of up to nearly 50% per department that’s impacted. By handling customer subscriptions and payment processing with recurring billing software, you make one change with many benefits for customers and the business alike.

2. Collections assurance is strengthened

A subscription management platform can also make it easier to collect late or outstanding invoices. Manual dunning can be a challenge, particularly when your billing department is already bogged down trying to get dozens of invoices out by hand.

Subscription management tools can enable:

• Automated credit card retries. Often, delinquent payments can be chalked up to a credit card issue—approximately 20% of Americans experience credit card overdrafting. For example, a customer may be overdrawn at the point that their card is billed. Even though they intended to maintain their subscription, they’re booted because the payment registers as “missed.” Automated credit card retries address this issue—often without the customer ever needing to know there was a problem. This strategy has been shown to save up to 75% of revenue that would have otherwise been lost to churn.
• Credit card auto-updates. Credit cards expire every three to four years. When this happens, customers may not think or want to manually update their card with every vendor that has it on file. Many subscription management tools work with card providers to automatically update this information.
• Automated customer communications. Subscription management software also automates dunning communications. Email and even text notifications are sent directly to customers with outstanding invoices, providing them with clear instructions on how to put their accounts back in good standing. The dunning management module can even enable you to adjust your messaging in each round of reminders to convey the growing urgency.
• Improved reporting capabilities. A good subscription management system will also provide you with clear reporting on who owes what and for how long. These reports make it easier for your business to identify issues and craft a dunning management strategy that caters directly to its needs.

It’s easy for outstanding payments to result in involuntary churn—a phenomenon where customers who wish to maintain their subscription are kicked off. Up to 40% of churn is involuntary, leading to extensive revenue leakage.

Not only is this expensive—costing businesses up to 5% of their annual revenue—it’s also avoidable. A reliable subscription lifecycle management software addresses all of these concerns, retrieving revenue and maintaining customer subscriptions simultaneously.

3. Customers become empowered to take care of themselves

Subscription management software puts more power in the hands of your customers by providing them with a host of self-service options that make it easier to adjust and manage their subscriptions. Around 80% of customers attempt to handle any product issues or adjustments on their own before reaching out to the company, while roughly 70% of them prefer this to interacting with customer service.

Many subscription management services provide hosted pages that allow your business to effortlessly implement these portals. Not only does this benefit a significant portion of customers, but it also improves your overall customer experience framework.

When customers can handle simple problems themselves, it makes it easier for your business to handle the complicated ones. And, because your resources are being better used, you can provide a higher level of care to customers. Lower wait times and more personalized responses prompt results your customers will remember the next time they are asked to renew their contract.

4. Data management becomes simple and clean

Subscription management software improves data management by eliminating the need for manual re-entry. The manual data entry error rate is around 1% — a seemingly insignificant number with the potential to produce significant consequences.

Subscription management technology can eliminate it entirely by integrating with the rest of your tech stack. Without integrations data is shared manually—sometimes verbally—between departments, creating an opportunity for mistakes to be made anytime someone needs information.

Through integration, data is accessible between departments. Integrations can be incorporated into everything from your CRM and ERP to your payment gateways. The subscription management software serves as a bridge, passing data seamlessly where it needs to go.

5. Reporting capabilities can go more in-depth

Aside from simply housing data, subscription management platforms also produce it in large, well-organized quantities. This information can be channeled into productive means through automatically generated dashboards that are easily accessed by the departments that need them.

Billing-generated data can help you better understand your customers for marketing purposes. It can facilitate usage-based information that is vital for product development, and provide calendar-based reports that indicate how much revenue will be coming in on a given day.

Through accessible reporting, each of your departments can access and implement the information they need in a way that’s easy to understand and use.

How Do You Choose the Right Subscriptions Management Software for Your Business?

With seemingly endless providers all promising stellar revenue management solutions and predictable cash flow, it can be challenging knowing where to start and which companies should be on your shortlist. In addition to all the features we mentioned at the start of this guide, here are a few factors you should keep in mind:

• Transparent pricing: It’s not uncommon for companies to obfuscate the terms and conditions behind their subscription model, surprising you with hidden charges like cancellation or minimum usage fees. If you can’t easily find how much they’ll charge you from their website or a quick phone call, that might be a red flag. The best option is a provider that clearly states their pricing model up front, and ideally charges a flat rate, like we do at Stax Bill. All our pricing plans are easy-to-understand, and we don’t charge overage fees for businesses experiencing faster-than-expected growth.
• Security: It’s of the utmost importance that you utilize industry-leading security to protect your SaaS data and customer payment information. To that end, make sure your subscriptions management provider is PCI compliant. The PCI DSS (Payment Card Index Data Security Standard) is a set of standards that vendors accepting credit cards must comply with. Non-compliance can lead to fines as high as $100,000 per month and legal action, meaning it’s important to ensure compliance, and preferably Level 1 certified, the highest possible level.
• User-friendly interface: Managing subscription billing shouldn’t feel like pulling teeth! Find a provider that offers a demo or trial, and make sure the interface is easy-to-use and navigate, and that they offer an onboarding program and regular support throughout the customer lifecycle.
• Customer support: On that note, don’t forget to find out what kind of customer service they provide: is it easy to contact a real person, or do you only speak with bots? Do you have a dedicated account manager? If something goes wrong, how easily can it be solved?
• Scalability: Find out if your future provider can grow along with you, for example by accepting a range of payment methods, or including an integrated payment gateway. If you plan to expand to international markets, what does their localization strategy look like? Can their billing system bill in currencies other than the US dollar, or automatically create invoices in multiple languages?

Finally, it’s important to see what real customers have to say about the options you’ve shortlisted. To do that, look at independent/third-party sites, like G2 or Capterra. That way, you’ll get the real scoop and have a better idea of what to expect when you sign up with your new subscription management system. If the reviewers are happy, then that’s a good sign—and we’re proud that the overwhelming majority of our reviews are positive about Stax Bill!

After selecting a platform, your new provider should help you with the transition, providing support for processes like data migration, trainings, and testing. Done properly, you can have a stress-free transition and set yourself up for subscription management success.

Beyond billing

Automated billing and invoicing processes are good to have in place. What full-scale subscription management systems provide is better: Collections assurance. Integrated data and reporting. Customer empowerment.

Subscriptions are about so much more than just invoices. They are the beating heart of any SaaS business.

A good subscription management platform is like a vascular system, funneling information everywhere it is needed in formats that are easy to access and understand.

For businesses that value efficiency, it’s vital.

Increase your subscription business’s efficiency. Schedule a demo with Stax Bill.

---

Quick FAQs about All-in-one Subscription Management Software

Q: What is an all-in-one subscription management software?

An all-in-one subscription management software is a comprehensive tool that allows SaaS businesses and other subscription-based models to automate billing, manage customer subscriptions, and gain insights into their revenue streams. Unlike basic billing systems, these platforms integrate various operations such as recurring payments, analytics, and customer communications, transforming how companies manage their subscriptions and customer data.

Q: Why is subscription management not just about billing?

Subscription management goes beyond billing because it involves managing the entire customer lifecycle, from sign-ups and renewals to data management and revenue forecasting. A robust system provides data-driven insights to minimize cancellations and maximize retention, thus supporting the overall financial health and customer satisfaction.

Q: What are the key benefits of using subscription management software for SaaS businesses?

Key benefits include automated billing and invoicing, recurring payments management, improved analytics and reporting, and dunning management to recover lost revenue. These features help businesses streamline operations, enhance customer experience, and provide actionable insights for growth and retention.

Q: How does subscription management software improve customer retention?

Subscription management software improves retention by offering a seamless billing experience, automated communications for outstanding payments, and self-service options for customers to manage their subscriptions. This reduces churn by ensuring payments are timely and customer interactions are consistent and error-free.

Q: What features should you look for in subscription management software?

Essential features include flexible billing options, real-time analytics, dunning management, PCI compliance, scalability, and integration capabilities with CRM and other tech stacks. These features ensure the software can grow with your business and provide a secure, user-friendly experience.

Q: How does subscription management software assist in revenue forecasting?

By automating billing cycles and offering real-time analytics, subscription management software provides accurate revenue forecasts. This allows businesses to plan better and make informed decisions based on projected cash flows and customer behavior patterns.

Q: What role does dunning management play in subscription management?

Dunning management is crucial for recovering revenue from failed payments. It automates retries, updates customer payment information, and sends notifications to customers about outstanding payments, thus reducing involuntary churn and revenue loss.

Q: How can subscription management software enhance customer empowerment?

Subscription management software enhances customer empowerment by providing self-service portals for managing their subscriptions. This includes updating payment methods, changing subscription tiers, and accessing support, freeing up your team to focus on more complex customer inquiries.

Q: What are the security considerations when choosing a subscription management software?

Security is paramount, so ensure that the software provider is PCI compliant and uses industry-leading security measures. This protects both your company’s and your customers’ sensitive data against potential breaches.

Q: How does integration with other systems benefit subscription management?

Integration with systems like CRM and ERP ensures seamless data flow across your business, reducing manual data entry errors and increasing operational efficiency. This connectivity allows for better data insights and a cohesive customer management strategy.

---

Managing subscriptions is without a doubt one of the top priorities of a subscription business. However, subscription management is a multi-faceted process—it encompasses obtaining and retaining your customer subscriptions, recurring billing, payment processing, dunning management, and the list goes on.

The broad scope of managing subscriptions means it’s imperative to optimize your system for maximum efficiency. The simplest and most effective way to do so is to adopt an agile, customizable subscription management software that automates the whole process, integrates seamlessly with your existing tech stack, and provides a cornucopia of real-time data and reports. Subscription management software tracks all the activities and data around selling subscription-based products and services, usually with the aim of empowering your organization to better acquire, keep, and grow your subscriptions. 

To be clear, the terms subscription management and recurring billing should not be used interchangeably. Recurring billing the automated process of charging your customer’s payment method on a regular schedule. Subscription management is  also not recurring payment processing, which is the storing of sensitive payment data and the facilitation of funds from a customer to the merchant (like Stripe billing, for example). 

Instead, subscription management software works in addition to your payment processor, empowering your SaaS business or startup to make smarter decisions, streamline your workflows, and scale your business.

Replacing your subscription business’ manual or outdated recurring billing software with a modern, automated system can allow you to reduce time spent on subscription billing and virtually eliminate manual errors (and therefore minimize revenue leakage).

In turn, this efficiency can provide the opportunity to scale your business—potentially by as much as 3X, without having to scale up your staff.

Sounds like a dream come true, right?

In case you’re still not sold, let’s look at  five specific ways real-time analytics can help you run your subscription business more effectively and efficiently. And by the way, this actionable data is just one of many side perks associated with automated subscription management software.

TL;DR

• A subscription management platform is a comprehensive system designed to handle all aspects of a subscription-based business model.
• Having a subscription management platform with real-time analytics offers significant benefits, the main one being that software tailored to your needs will allow you to scale with ease.
• There are quite a few good options on the market for subscription-model businesses. Choosing the right one will require understanding your needs.

What is a subscription management platform?

A subscription management platform is a comprehensive system designed to handle all aspects of a subscription-based business model. It streamlines the processes involved in managing customer subscriptions, automating recurring billing, and handling customer lifecycle events. 

Key features typically include:

• Automation of subscription creation, renewal, upgrades, downgrades, and cancellations.
• Automatic generation and delivery of invoices for recurring billing cycles. 
• Integration with various payment gateways to facilitate secure transactions from a variety of payment methods such as credit cards. These integrations may be pre-built or come as an open API for your engineering team to build a custom integration.
• The ability to run multiple billing models – including one-time payments – for various products or tiers with different pricing plans.
• Tools to manage customer information, track subscription statuses, and provide support.
• Detailed insights into subscription metrics, revenue trends, and customer behavior.
• Ensuring that all processes adhere to legal standards and protecting sensitive customer data.
• Payment collections capabilities ensure you can charge and get paid for subscriptions and services. 

Understanding built-in analytics in your subscription management platform

The built-in analytics of a subscription management platform tend to be quite robust. As a result, analyzing the data usually involves a combination of tracking key metrics, segmenting data, understanding customer behavior, and generating actionable insights. By leveraging these tools effectively, you can gain a comprehensive understanding of your subscription business, identify opportunities for growth, and make data-driven decisions that enhance customer satisfaction and drive success.

You should start by identifying key metrics such as:

• Conversion Rate: The rate at which users complete an activity, such as checkout.
• Monthly Recurring Revenue (MRR): The predictable revenue a company expects to earn every month.
• Annual Recurring Revenue (ARR): The annualized version of MRR.
• Customer Lifetime Value (CLV): The total revenue expected from a customer over the entire duration of their relationship with your company.
• Churn Rate: The percentage of subscribers who cancel their subscriptions during a given period.
• Customer Acquisition Cost (CAC): The cost associated with acquiring a new customer.
• Average Revenue Per User (ARPU): The average revenue generated per user.
• Subscriber Growth Rate: The rate at which new subscribers are added.

Do utilize the real-time dashboards to monitor trends. You may even be able to set alerts that warn you when metrics need immediate attention.

You should also segment your data to gain deeper access. Common segmentation criteria includes subscription plans, location, customer demos like age, and engagement levels.

What are the Benefits of Having a Subscription Management Platform with Real-Time Analytics

Having a subscription management platform with real-time analytics offers significant benefits. As a subscription business, having software that’s tailored to your needs, rather than having to cobble together a tech stack that mostly does what you need it to, will allow you to scale with ease.

1. Subscription management software analytics enables smart, data-driven business decisions.

Data-driven decision-making (DDDM) has become a buzzword in the business world in the last decade or so, and for good reason—a 2014 study by PwC shows executives who are highly data-driven were three times more likely to report significant improvements in their decision-making abilities when compared to those who didn’t take a data-driven approach.

In the highly competitive B2B SaaS world, it’s imperative to use DDDM—you can absolutely bet the farm on the fact your competitors are using data to make their decisions.

DDDM can help you make realistic, informed resource management choices, accurately calculate your cash runway, forecast future sales and revenue, and scale your business strategically.

To effectively use DDDM, you need easy and secure access to reliable, accurate, comprehensive data that’s updated in real-time.

Not only that, but you need to be able to interpret the data and understand it so you can gain meaningful insights into the performance of your subscription-based business.

A comprehensive subscription management software provides accurate, up-to-the-minute data as well as powerful tools that turn the data points into contextualized, easily understandable reports. These immediate insights into key metrics allow you to make confident, data-driven decisions that are truly in the best interest of your business.

2. In-depth MRR reporting helps you make proactive adjustments.

Monthly recurring revenue (MRR) is an essential insight for a subscription business, where long-term customer relationships are crucial for success. By looking at this month’s MRR, you can generally predict how much recurring revenue you’ll make next month.

And, by monitoring MRR data, you can keep your finger on the pulse of emerging trends in customer behavior. In turn, this can help your team develop solid customer retention plans and ultimately extend customer lifetimes.

An automated subscription management system provides reports on four different types of MRR:

• New business MRR – This measure of added revenue from new customers quantifies the efficacy of your marketing campaigns and sales teams. It shows that your teams are obtaining qualified leads and converting them to customers, and provides helpful data surrounding the growth rate of your business.
• Expansion MRR – Expansion MRR shows when your existing customers take actions like upgrading their subscriptions, adding new features, or adding more subscribers to their accounts. This indicates customer satisfaction and shows when upselling campaigns have been successful.
• Contraction MRR – The opposite of expansion MRR, contraction MRR shows when your existing customers have downgraded their subscription in some way. A high contraction MRR could indicate that customers feel your price is too high or they aren’t receiving enough value. This metric can help you assess your product pricing and ensure that you aren’t losing customers to a lower-priced competitor.
• Churned MRR – Churn MRR helps you accurately forecast your cash runway by indicating how much recurring revenue you’ll lose to churn over time. It can also provide insights into which specific customer groups are churning the most so you can make targeted changes and improvements.

Automatically generated MRR reports are available immediately and they are highly accurate, which means you don’t have to wait around for your finance team to produce the reports each month or risk manual errors.

This instant, reliable data allows you to see patterns as soon as they emerge and get to work identifying the cause.

Then, you can pivot your business strategy right away to either correct course (if you notice downward movement) or support a period of fast growth (if you see rapid upward movement).

3. Real-time data acts as an SSOT for all business departments.

If you’re using multiple different tools to gather and compile data about your business, you likely know the struggle of maintaining up-to-date, accessible, and digestible reports that can be used by all of your team members.

One simple transcription mistake can corrupt an entire report and impact your business negatively at every level.

With an automated subscription management platform that has real-time analytics,

• all of your data is in one place,
• the risk of manual errors is virtually eliminated, and
• all of your teams can access the information easily and securely.

It’s the single source of truth (SSOT).

Gone are the frustrating days of unreliable, outdated data and having to consult three different programs in order to get an idea of what’s going on in your subscription business.

A subscription management system functions as a data bridge between other components in your tech stack, including your CRM, ERP, payment gateways, and, in many cases, your business’s own product. Because it interacts with all these other pieces of software, your subscription management platform can pull data from the other systems to build reports that show the whole picture in real-time.

The SSOT provided by subscription management software benefits every team within a business, including sales, accounting, customer support and success, marketing, and even the executives.

Everyone is on the same page, referring to the same data, and confident that the information they are referencing is correct.

4. Accurate, accessible data allows you to improve the customer experience.

Given that your entire business can benefit from real-time analytics, the data can help customer-facing teams create a better customer experience (CX) as well.

3 examples of customer experience improvement as a result of a subscription management system:

• When a potential customer calls looking for a price quote on your subscription product, your sales team will have up-to-the-minute data on current pricing, availability, and so forth. This helps eliminate incorrect quotes, which can create mistrust and lead to lost sales.
• When a current customer calls for support, the customer support team can easily pull up their contact information, subscription history, account details, recurring billing information, past and future invoices, and other useful customer data. This prevents customers from having to answer a multitude of questions before the support agent can even address their main concern, and it shows the customer they are valued.
• An automated recurring billing system also ensures consistent invoicing for customers. This automation dramatically reduces billing inaccuracies that can result from manual errors, which means you have fewer frustrated customers, a lower churn rate, and a greater customer lifetime value.

5. Up-to-date reporting helps you scale more effectively.

Scaling your subscription business requires a careful analysis of how your business is currently performing, understanding how it’s performing in comparison to previous months, and accurately forecasting how it will likely perform in the future.

This information allows you to make those strategic, data-driven decisions we talked about, and manage risk as you grow your business.

Automated subscription management software provides a wealth of information to help you scale, including:

• Calendar reports to help with sales forecasting
• Sales reports to inform product development and pricing strategies
• Customer reports to develop and refine your marketing campaigns
• MRR reports for creating customer retention plans
• AR aging reports to track down and manage unpaid invoices
• Revenue reports to help you stay in compliance with revenue recognition rules

With all these real-time reports at your fingertips, you can easily get an accurate idea of your business’ performance. And, with all the time you saved by not having to generate manual reports, you can focus on developing and implementing strategies to scale your business.

The Top Subscription Management Software Solutions Available in 2024

Alright, so you’re ready to upgrade your billing solution to start automating the repetitive and improve your cash flow. But with seemingly endless choices out there, it can be tricky knowing where to start your hunt while cutting through the noise. Don’t worry: to make sure you’re headed in the right direction, here are the leading automated subscription management solutions for SaaS businesses available today.

Stax Bill

Stax Bill is one of the best-rated automated subscription management and payments software providers out there, hands down. Aimed at increasing your business’s efficiency through automated recurring billing, minimizing revenue leakage, and more powerful features that will scale your business, Stax Bill offers a holistic, full-service experience that’s virtually unparalleled in the industry. 

• Pricing: At Stax Bill, transparency is the name of the game, which is why we offer flat pricing with no hidden fees. With our subscription-based model, that means we never take a cut of your business’s revenue. What you see is what you get! With prices starting at just $199 and the ability to add 0% markup payment processing from $99/month, Stax Bill provides straightforward, hassle-free pricing for agile-minded businesses. 
• Key Features: All our features at Stax Bill are aimed at scaling your business and go beyond automated invoicing and subscription management. With our self-service portal, it’s a piece of cake to automate tasks like registrations, while also enabling your customers to manage their own subscriptions in real-time. Plus, with a 100% ASC 606-compliant revenue recognition model, even taxation is dramatically streamlined. And best of all, we offer granular, real-time analytics through over 40 reports that constantly update, so you can track your cash flow, MRR/ARR growth, and take data-driven business decisions with full confidence.

Maxio/Chargify: 

Maxio, formerly known as Chargify or SaaSOptics, provides billing and financial operations aimed at B2B SaaS companies. They offer a plethora of services like subscription billing and management, SaaS metrics, and revenue recognition.

• Pricing: There’s no getting around it: Maxio costs a pretty penny. Starting at $5,000 annually–based on a 12-month billing volume–it’s a steep price to swallow. While the Base subscription can be used for up to $500k in annual billings, the price tag alone will likely alienate smaller to medium-sized SaaS businesses. From there, you can add on other modules if you have more advanced workflows, like advanced billing or accounts receivable.
• Key Features: With an impressive amount of available integrations and powerful reporting capabilities, revenue recognition is as easy as 1-2-3 with Maxio. The same goes for recording contracts and transactions. Plus, reviews say that the team builds new features in line with customer feedback. 

FastSpring

As a self-proclaimed “full-stack digital commerce platform”, FastSpring aims to offer a wide range of services to help software and SaaS companies sell more and compete big. FastSpring’s comprehensive risk management focuses on making it easy to sell globally, and as it’s available in over 200 regions, it’s often touted as a great choice for eCommerce merchants active not only in the U.S., but internationally. 

• Pricing: Quite notably, FastSpring provides no concrete information about its pricing, instead saying that they offer flat-rate pricing, they work with a revenue-sharing model and their fees vary based on the transaction volume moved. As such, FastSpring requires that you speak with an Account Executive for more information, which suggests their pricing may be higher than other competitors and the possibility of being slapped with random fees.
• Key Features: A key differentiator of FastSpring is they’re a merchant of record (MoR), which makes it easier for SaaS businesses to sell in new regions. By dealing with regional payment processing, payment localization, and more, it’s easier for businesses to focus on their product or service while remaining risk-aware in new or challenging environments. FastSpring also offers additional services like affiliate marketing as part of their digital commerce approach, and they have a solid resource hub that’s easily-accessible for developers.

Recurly

“The best subscription management and recurring billing platform on the market.” That’s how Recurly bills itself, which sets high expectations, but we’re not convinced it always hits the mark. What does set Recurly apart is its in-depth, customized support for a wide range of industries, like telecom/energy and government/non-profit. Let’s take a closer look. 

• Pricing: Recurly offers a pretty unique deal, in that you pay nothing for the first 12 months, plus no payment volume fee up to a certain threshold. However, after the first year, their prices are quite steep, starting at $249/month, plus an overage fee of .9% if you exceed their plans’ revenue caps. That means if you have a great sales month and make an extra $50,000, you’d be charged $450 just for that. 
• Key Features: In addition to recurring billing and revenue recognition, Recurly offers both PCI and SEPA compliance, making it a good option for European-based businesses. Plus, they have an expansive range of integrations available. Proactive features like churn management and granular subscription management reporting provide a SSOT for customers. However, reviewers regularly point out that customization is lacking within the platform, and data exporting analytics require improvement.

How to Choose the Right Subscription Management Platform

Choosing the right subscription management platform is crucial for businesses that rely on recurring revenue models. With the growing popularity of subscription-based services, the right platform – the one that can scale with you – can be a true make or break. Here are some key considerations and steps to guide you in choosing the right subscription management platform.

1. Understand Your Business Requirements

Before diving into the specifics of various platforms, it’s essential to have a clear understanding of your business requirements. Consider the following:

• Different businesses may have varying subscription models, such as freemium, tiered, usage-based, or hybrid models. Ensure the platform supports your specific model.
• Consider the size and demographics of your customer base. Some platforms are better suited for large enterprises, while others cater to small and medium-sized businesses.
• Choose a platform that can scale with your business. As your subscriber base grows, the platform should be able to handle increased volume without performance issues.
• If you operate globally, ensure the platform supports multiple currencies, languages, and complies with international regulations.

2. Key Features to Look For

A robust subscription management platform should offer a comprehensive set of features to streamline your operations. Key features to consider include:

• Automated billing and invoicing, as well as integration with your payment gateway
• Ensure the platform can handle the entire subscription lifecycle, including sign-ups, renewals, upgrades, downgrades, and cancellations
• Paymement collection
• Real-time analytics and reporting tools provide insights into key metrics like monthly recurring revenue (MRR), churn rate, customer lifetime value (CLV)
• Customer management features, including the ability to track customer interactions, preferences, and subscription history

3. Integration Capabilities

Your subscription management platform should seamlessly integrate with other systems you use, such as your customer relationship management (CRM) system, accounting software, marketing automation tools and e-Commerce platform.

4. Security and Compliance

Security and compliance are critical considerations when choosing a subscription management platform. Ensure the platform adheres to industry standards and regulations, such as PCI-DSS, GDPR and SOC 2.

5. Ease of Use

A user-friendly platform can significantly reduce the learning curve for your team and enhance overall efficiency. Look for a platform with an intuitive interface, comprehensive documentation, and responsive customer support.

6. Cost Considerations

While cost should not be the sole deciding factor, it is an important consideration. Compare the pricing models of different platforms, keeping in mind the following:

• Subscription Fees: Understand the subscription fee structure, including any tiered pricing based on the number of subscribers or features.
• Transaction Fees: Some platforms charge additional transaction fees for each payment processed.
• Implementation and Setup Costs: Consider any initial setup fees or costs associated with integrating the platform with your existing systems.

7. Customer Support and Service

Reliable customer support is essential for addressing any issues that may arise. Evaluate the support options available, such as 24/7 support or a dedicated account manager.

Final Words

A subscription management solution with real-time analytics is essential for a maximally efficient tech stack and a scalable business.

As CMO Patrick Edmonds says, “Technology like AI has been around for a long time, but not in a usable way for companies. Data wasn’t being tracked properly, it wasn’t clean enough, it wasn’t being aggregated into a data warehouse where it could be manipulated and passed back into other systems to be useful. That’s changed. Strong data and analytics practices are becoming table stakes, especially in the B2B world.”

For subscription businesses, standalone recurring billing automation is just one component of your tech stack. If you’re looking to grow your business, you need all the benefits that come with a full-scale, modern subscription management solution that provides real-time analytics and a wealth of data.

And when it comes to Stax Bill, it will help you make better business decisions, reduce friction for your teams and customers, outperform your competitors, and scale your business strategically. 

---

Quick FAQs about Subscription Management Software

Q: What is the purpose of Subscription Management Software?

Subscription Management Software is a tool that automates the multi-faceted process of managing subscriptions for a subscription business. It helps in obtaining and maintaining customer subscriptions, handling recurring billing, processing payments, managing involuntary churn, and many other tasks.

Q: How does Subscription Management Software help in Data-Driven Decision Making (DDDM)?

Subscription Management Software provides real-time analytics, which is crucial for DDDM. It offers accurate and up-to-date data that helps in making informed management decisions, forecasting future sales and revenue, scaling the business strategically, and understanding the business performance.

Q: What is the role of Subscription Management Software in reducing manual errors and increasing efficiency?

Modern, automated Subscription Management Software can reduce time spent on subscription billing and nearly eliminate manual errors. This minimization of manual errors leads to decreased revenue leakage. The efficiency it brings provides the opportunity to scale your business potentially up to 3X without necessarily increasing staff.

Q: How does Real-time analytics in Subscription Management Software help in customer retention?

Real-time analytics allow tracking of Monthly Recurring Revenue (MRR) data, which helps in better understanding customer behavior trends. Such insights are invaluable in developing solid customer retention plans.

Q: What is Single Source of Truth (SSOT) in context of Subscription Management Software?

SSOT refers to the feature of automated Subscription Management Software where all company data is kept in one accessible place, free from manual errors. This feature allows all team members to access the information easily and securely, leading to efficient, data-driven operations.

Q: How does Subscription Management Software aid in enhancing customer experience?

Subscription Management Software provides real-time data that can be leveraged by customer-facing teams to enhance customer experience. This software ensures consistent invoicing, eliminates inaccurate quotes, and allows customer support teams to easily access customer data, contributing to trust-building and customer retention.

Q: How does Subscription Management Software facilitate business growth?

Subscription Management Software provides comprehensive real-time reports on sales, customer behavior, revenue, unpaid invoices, and Monthly Recurring Revenue (MRR), among others. These insights enable strategic, data-driven decision-making, helping businesses manage risks, identify opportunities, and plan their growth.

Q: What are some leading Subscription Management Software in the market?

Some of the leading Subscription Management Software includes Stax Bill, Recurly, Chargebee, Stripe Billing, and Maxio. These platforms offer robust features, are compatible with leading ERP, CRM, and payment gateways, and provide real-time data for informed decision-making.

Q: What are the benefits of using an agile and customizable Subscription Management Software?

An agile and customizable Subscription Management Software allows seamless integration with your existing tech stack. It automates the subscription management process and adapts to the unique needs of your subscription business. It provides real-time data and reports to help you optimize your business operations.

Q: How does Stax Bill stand out among other Subscription Management Software?

Stax Bill offers a comprehensive suite of features aimed at scaling your business, beyond automated invoicing and subscription management. With their self-service portal, automating tasks becomes easy, and customers can manage their own subscriptions in real-time. They offer granular, real-time analytics through over 40 reports that constantly update, allowing businesses to track their cash flow, MRR/ARR growth, and make data-driven business decisions with full confidence.

---

There’s no way to sugarcoat it: sustainably scaling your SaaS business is hard. Incredibly hard, most of the time. Only 28% of SaaS companies studied by McKinsey ever reached $100 million in revenue, and 85% of companies that were “supergrowers” couldn’t keep up their outstanding growth rates. Tough pill to swallow, right? 

It goes without saying that you need to keep a close eye on your SaaS business health and monitor your metrics so you’ll have a deeper understanding of how your company’s doing to ensure profitability. With a plethora of abbreviated metrics brands can track—from churn MRR to to CAC to CLV—it can feel overwhelming knowing where to start in order to best gauge your company’s financial health. We’ve already spoken before about the top 10 SaaS metrics to track and 4 MRR Types you should be aware of, but in today’s article, we’re going to do a deep dive into one metric you should be tracking, and that’s NRR.

If you’re trying to better the customer experience, improve your retention rates, and scale your business, then you need to be looking into net revenue retention, or NRR. If you have no idea what NRR is, why it matters for customer acquisition, or how to even put it into practice, look no further. In this blog, we’ll cover everything you need to know about net revenue retention, and then some.

TL;DR

• Gross revenue retention is a metric that shows you the percentage of your recurring revenue over a certain period of time, but doesn’t factor in upselling, cross-selling, or any other sort of additional revenue related to expansion. Meanwhile, NRR not only looks at your churn revenue, but also expansion revenue. In other words, it looks at both the negative and positive impacts on your recurring revenue in a certain period.
• NRR can demonstrate the value you provide to your customer, is a metric that investors care about as it can help determine the growth potential of companies, and can function as an early warning sign that your SaaS company needs to improve the customer experience and reduce churn.
• However, if you look at NRR in a bubble, this metric doesn’t tell the whole story. It may hide potentially critical issues like low new customer acquisition or high customer churn. That’s why it’s important to track all metrics holistically and balance your sources of revenue growth.

What is Net Revenue Retention (NRR)?

First, let’s start by defining a similar metric that some people confuse for NRR. Gross revenue retention (or GRR), is a metric that shows you the percentage of your recurring revenue over a certain period of time, but doesn’t factor in upselling, cross-selling, or any other sort of additional revenue related to expansion.

You can calculate it using this formula:

GRR = (Total revenue – Total churn) / Total revenue x 100%

Do note that your gross retention rate can never be higher than 100% (which would mean you had zero churn during that period).

The limitation of GRR is that it essentially defines success as looking exclusively at whether or not you retain customers. If you want to have a deeper understanding on how your SaaS company farms new customers, NRR (sometimes called net dollar retention) is the metric you’d need, since it looks not only at your churn revenue, but also expansion revenue. In other words, it looks at both the negative and positive impacts on your recurring revenue in a certain period.

How Do You Calculate NRR?

To calculate your NRR, use this formula:

Net revenue retention = (Net recurring revenue – Total churn + Expansion revenue ) / Base recurring revenue x 100%

Say you started the month with $200,000 in recurring revenue, and $220,000 from those same customers at the end of the month. Now, if you lost $10,000 in MRR because of churn and downgrades, but earned $12,000 from upgrades, you could calculate your net revenue retention as such:

NRR= ($220,000 – $10,000 + $12,000)  / $200,000 x 100

Which would come out to 111%.

Unlike GRR, your total figure for NRR can be a percentage higher than 100%, since it’s looking at both customer retention and value growth within your company. That’s why companies with a high NRR are often given a higher valuation, as they’re more likely to have a better retention than SaaS companies—meaning you’re likely to see SaaS organizations with a great NRR share it publicly.

As a general rule of thumb, a great net revenue retention rate is anything over 110%. That signals that you’re growing your business with a steady customer base and minimal churn. If your NRR is under 100%, it’s not necessarily a harbinger of doom (rapid-growth companies could fall in this category, if you’re onboarding customers faster than you’re losing current customers.)

Still, consider looking at your churn rate or customer lifetime value to better understand why your NRR is where it’s at. It could be because of a sudden customer drop-off, or it could mean you don’t have enough expansion revenue from upselling and cross-selling, which can be solved with some palm grease. However, if it’s under 80%, you need to up your customer retention game.

Why Should You Care about NRR?

It can demonstrate the value you provide to your customers

Subscription-based companies have to not only retain, but also expand their customer base to remain profitable and have sustainable revenue growth. One of the best metrics to measure the value your brand offers customers is NRR, as a high NRR can suggest that your organization is in a financially strong position. Since the growth from expansion revenue outpaces churn, you can reasonably assume that your organization is financially stable.

It’s a metric investors care about

Today, NRR is a metric that customer success team leads have to know about. That’s because the positive effect it can have on organizations has been clearly documented, like SaaS Capital noted in their 2023 Growth Benchmarks for Private SaaS Companies, saying: “Increasing Net Revenue Retention (NRR) from the 90% to 100% range to the 100% to 110% range improves growth rate by 9 percentage points. Companies with the highest NRR report median growth that is double the population median.” While it’s not the only metric that investors will look into (other key metrics include churn rate and LTV), NRR is a metric that is increasingly used to determine the growth potential of companies.

It functions as an early warning sign

If your NRR is on the lower side, it could be a signal that your SaaS organization needs to step up the customer experience, since NRR essentially measures your retention levels. It’s a sign that your monthly recurring revenue is vanishing faster than it’s being created. Some ways to improve your net revenue retention could be implementing proactive churn prevention with real-time analytics, flexible subscription models, incentives like referral programs, and dynamic account management. Whatever approach you take, make sure you set clear success benchmarks based on the data you’re being fed for a data-driven approach.

Why a High Net Revenue Retention (NRR) May Not Be a Good Thing for Your SaaS Business

OK, so we’ve covered why you shouldn’t ignore your NRR, but before you jet off, it’s important to realize that it’s not the full picture. In fact, you may be surprised to learn that it might not always be a good thing if your NRR is through the roof. Confused? 

Let’s say  your SaaS business has notched a  150% NRR for a few months in a row. You’re knocking it out of the park and you can now sit back and relax, right?

Well, not so fast—it’s not always in the best interest of your SaaS business to focus solely on a high NRR figure.

Your 150% NRR can lead to complacency and a false sense of security, especially if you aren’t keeping a close eye on other growth and retention metrics.

For example, unless you also check your business’s other metrics, you might not realize your new customer growth is only 25%. That’s not necessarily a death knell for your SaaS business, but it can present future challenges in terms of growth and the sustainability of your business.

High NRR can mask other issues in your SaaS business model

If you only look at your NRR, you may think your SaaS business is on track with excellent growth and a secure future.

But in a bubble, NRR doesn’t always tell the whole story.

While you may be fantasizing about the compounding business growth that’s surely coming your way thanks to your high NRR, some potentially critical issues could be lurking in the shadows.

Issue #1: Low new customer acquisition

In order to create a self-sustaining engine for future growth, it’s important to earn revenue from both existing customers as well as from new clients. A high NRR figure doesn’t take into account specifically where your revenue growth is coming from, so your SaaS business may be at 150% NRR but only 20% new logo growth.

Those figures mean your sales team is likely putting most of their effort into upselling existing clients with more products or account expansion. These are often easier sales targets than net new customers and should be focused on.

But, too low a rate of new customer acquisition can hinder future growth.

When the sales team focuses too heavily on selling to existing customers, they may effectively ‘over-harvest’ that revenue stream to the point where:

• there is a lower potential for upselling and cross-selling in the future, or
• customers no longer feel they’re getting enough value for their money.

This may lead to another issue , which is:

Issue #2: High customer churn

When customer satisfaction wanes, customers don’t feel like they’re getting their money’s worth, becoming more likely to churn. If enough customers churn, it can cause your SaaS business to become a leaky bucket. This occurs when a high churn rate chokes off the growth rate—existing customers are leaving at the same or higher rate than new customers are being acquired.

Another potential churn-related pitfall is when your SaaS business reaches a growth ceiling, which is where your customer base has grown substantially to the point where your churn, though not necessarily a concerningly high percentage, ultimately cancels out the growth of new customers. This can occur when your new client acquisition rate has not kept up proportionally with the size of your customer base.

Again, since NRR takes into account your expansion revenue as well as your churn revenue, the final figure can be greater than 100%. It’s a good metric of growth, while GRR is a better measure of customer retention. Therefore, it may be difficult to accurately assess your churn and growth rates by looking solely at your SaaS business’s NRR.

How to avoid being blindsided by these masked issues in the SaaS industry

Fortunately, there are a few ways you can avoid falling into a high-NRR-based complacency trap:

Track all metrics holistically

First and foremost, it’s crucial to take a holistic view of all of your SaaS business’s metrics. These should include both NRR and GRR, but also monthly recurring revenue (MRR), annual contract value (ACV), LTV, and customer acquisition costs (CAC). And don’t forget to look  at customer retention and churn rates as often as you check your NRR.

Especially early on in an effort to scale a SaaS business, it can be tempting to focus only on customer acquisition and attaining a glamorous 100%+ NRR. However, it’s equally important to ensure that your customers stick around and your GRR is high and stable.

The median GRR for SaaS businesses  less than three years old is around 99%, although it commonly drops to around 90% after about three years. So, if your SaaS business is relatively new, it’s important to ensure your GRR is meeting these benchmarks before you worry too much about NRR.

A high GRR shows you have a subscription product that’s useful and valuable to customers over the long term, while a high NRR shows you have strong growth potential. Investors know this, so if you seek funding, plan to have both your GRR and your NRR inspected.

As SaaS expert Dave Kellogg outlines, “I think the thing that most often goes wrong with SaaS metrics is when they’re incoherent with the story. No metric is inherently evil or good, but it has to match the story. If you’re going to tell a big land-and-expand story, and you’ve got multiple products and cross-sell and additions and price increases, I better see a nice NRR. If you have none of those things, well, first I’m going to wonder why you chose that story.”

So, the moral of the story: keep an eye on all your KPIs and metrics holistically—watching them individually as well as noticing how they correlate with each other. And, keep in mind that different metrics can be more impactful depending on where you are in the lifecycle of your business, the type of SaaS products or services you offer, and your business goals.

Balance sources of revenue growth

Next, aim to split your total revenue growth 50/50 between new logo growth and expansion revenue from existing customers. In the SaaS industry, if your overall revenue growth relies too heavily on expansion revenue, you run the risk of encountering a leaky bucket situation or hitting a growth ceiling.

Growth ceilings can be deadly for SaaS businesses, and there are only three ways to break through. You could:

• reduce churn/increase retention,
• acquire more new customers, or
• increase average revenue per user (ARPU).

Ensuring your revenue growth is balanced between new and existing customers from the get-go helps ensure that you won’t have to take emergency measures to save your business later on.

Segment your NRR and other metrics

Finally, segment your NRR and retention rates by ARPU and acquisition date to help reveal trends that may not otherwise be obvious. Doing so can help show whether small, mid-size, or enterprise customers are more likely to churn, as well as when that is most likely to happen. Then you can formulate a plan to increase retention rates for the customers who are most prone to churning.

This type of metric segmenting can also help you identify if there are certain members of your sales and customer service teams who may be underperforming. If so, you can take steps to improve performance and target specific problem areas.

But how?

A modern, comprehensive subscription management platform can help

A modern subscription management platform is more than just a tool to handle billing—it’s also a valuable data mine that increases the visibility of both NRR and non-NRR metrics.

This type of full-scale SaaS solution can also:

• Provide real-time customer data and reports
• Integrate seamlessly with your existing tech stack
• Generate accurate forecasts
• Virtually eliminate manual billing errors
• Reduce recurring revenue leaks
• Assist with revenue recognition compliance

Having all of this information readily available allows you to keep your finger on the pulse of your software as a service business and make data-driven decisions. In turn, this can help you scale effectively, meet your GRR and NRR goals, and win over investors.

Contact us today to schedule a demo with Stax Bill.

---

Quick FAQs about Net Revenue Retention

Q: What is Net Revenue Retention (NRR)?

Net Revenue Retention (NRR) is a crucial metric for SaaS businesses that measures the percentage of revenue retained from existing customers over a specific period. It factors in churn revenue and expansion revenue, providing insights into both customer retention and growth from upselling or cross-selling.

Q: Why is NRR important for SaaS businesses?

NRR is important because it reflects a company’s ability to retain and grow revenue from its current customer base. A high NRR indicates strong customer loyalty and effective upselling strategies, which can lead to a higher company valuation and attract potential investors.

Q: How is NRR different from Gross Revenue Retention (GRR)?

The key difference between NRR and GRR is that GRR only measures the percentage of recurring revenue retained from existing customers without considering expansion revenue. NRR, on the other hand, includes both churn and expansion revenue, thus offering a more comprehensive view of a company’s revenue dynamics.

Q: How can a SaaS company calculate its NRR?

To calculate Net Revenue Retention (NRR), use the formula: (Beginning MRR – Churned MRR – Downgrade MRR + Expansion MRR) / Beginning MRR; essentially, take the starting recurring revenue, subtract lost revenue from churned and downgraded customers, add any gained revenue from upgrades and expansions, then divide by the starting recurring revenue. Then you have the percentage representing NRR. This formula helps determine the total impact of customer retention and expansion on revenue.

Q: What does a high NRR indicate about a company?

A high NRR (above 110%) suggests that a company is successfully growing its revenue from existing customers, indicating a healthy balance of customer satisfaction and effective upselling.

Q: What strategies can improve NRR?

Companies can improve NRR by implementing proactive churn prevention techniques, offering flexible subscription models, incentivizing upgrades with referral programs, and enhancing customer engagement through personalized account management.

Q: Can focusing too much on NRR be detrimental?

Yes, focusing solely on NRR can lead to complacency and overlook other essential metrics like new customer acquisition. A balanced approach is necessary to ensure sustainable growth and prevent potential pitfalls like a “leaky bucket” scenario.

Q: Is a low NRR always a cause for concern?

Not necessarily. A low NRR might not be alarming if the company is in a rapid growth phase with a high rate of new customer acquisition. However, if NRR falls below 80%, it may indicate significant issues with customer retention or insufficient expansion revenue.

Q: How does NRR affect investor perception?

Investors often view NRR as a key indicator of a company’s growth potential and financial stability. A strong NRR can enhance investor confidence, as it suggests effective customer retention and revenue expansion strategies.

---