I spend a lot of time helping subscription-based businesses find the best recurring billing solution for their needs. One thing I’ve really taken away from my experience is that no two businesses are alike.
Every subscription business has unique requirements around recurring billing and payments.
This means finding the right recurring billing software takes work. A fancy platform with lots of slick features is still only worth its ROI, after all.
A functional platform that enables true digital transformation of the business will outpace a glitzy one any day. Such a technology solution comes with features that actually increase your business revenue and customer satisfaction.
So how do you find the recurring billing software that best meets your business’s unique needs? Through a combination of experimentation and asking the right questions.
5 recurring billing software must-haves to empower digital transformation
Perhaps the most important thing your recurring billing software needs to do is accurately reflect your catalog of products and plans. Beyond that, there are just a few more critical things to look and fit for.
1. Flexible catalog structuring.
There are so many different ways to bring products to market. Between product types, add-ons, services, billing cycles, and currencies, a billing platform has to have enough catalog flexibility to accommodate many pricing and invoicing possibilities.
This flexibility is necessary for scaling a subscription business as it grows and the market changes.
The ability to easily adjust your catalog with a few clicks to align with the best possible pricing strategy sets successful businesses apart.
Truly agile recurring billing software can also make changes at the customer level without creating a whole new subscription.
There needs to be a separation of products and plans within the billing system. Why? Because marrying the two together into subscriptions limits their flexibility.
Instead, an adaptive billing platform allows products to behave as their own entity that can be priced uniquely according to the plan they’re attached to.
Examine your products and plans and find a billing and payments solution that accommodates their current and possible future configurations.
2. Automation of special pricing events and dunning management.
Many subscription businesses have a need for prorating and applying discounts and promotions to their billing. But handled manually, special pricing events like these can be both tedious and complicated.
Recurring billing software automates the invoicing and payment process. Make sure the billing solution you choose also goes the distance to manage your unique pricing needs now and can meet your business’s ability to deploy agile pricing strategies going forward.
Another event that should be automated is dunning management. This method of recovering revenue leakage is directly correlated to your billing platform’s ROI.
Pro tip: If a solution claims to recover 5% of leaked revenue, they’re probably exaggerating.
We find 2%-4% is more common, and software like Stax Bill generally pays for itself in one year or less, thanks to revenue recovery like this.
Finally, having the ability to easily condense multiple versions of the same plan for different currencies into one plan simplifies subscription management and improves reporting. If you bill in different currencies, this is a must.
3. Robust reporting insights create business opportunities.
Once you ensure the recurring billing software solutions you’re exploring allow for flexible structuring, you’ll need to confirm they offer robust reporting tools. These will help reveal whether your pricing strategies are working, and without data, you’re making decisions in the dark.
Your best recurring billing software should obviously have the ability to pull data by customer—but that’s not all you need. Intelligent recurring billing software allows businesses to add custom fields that can be reported on.
Creating additional tracking codes for different entities will mold reporting more closely to your business structure.
Additionally, while it’s helpful when billing software has a sleek user interface that makes reports easy to understand, data isn’t always helpful if it’s trapped in the platform.
The ability to export raw data—including custom fields—to a manipulable spreadsheet is critical to business success.
Sharing and reporting on the most important data to your business internally and externally is easier with exporting. The insights you glean from your data will transform your business.
4. Self-service capability.
A complete recurring billing solution will include a self-service portal for your customers. This portal should allow account holders to view the details of their account, change their subscription and payment information, and pay invoices all without manual effort on your business’s resources.
This further automates your workflows, which is great for productivity, but it also gives customers more control. In today’s increasingly customer-led market, self-service is critical to continued growth and success.
Improved customer experience is a central aspect of a business’s successful digital transformation.
5. Accounting and security compliance.
This should go without saying, but your best recurring billing software absolutely must be GAAP (accounting) and PCI (security) compliant; ideally PCI Level I.
Accurate revenue recognition isn’t optional in subscription business today.
Recognizing earned and deferred revenue is best done with an automated tool like agile recurring billing software. Additionally, accrual accounting with a dual-entry ledger is superior to cash accounting, so look for that in a platform as well.
From a security standpoint, software that is PCI compliant encodes and protects your customers’ sensitive data from possible cyberattacks, including their name, address, and credit cards or other payments information.
Get more granular based on your subscription business’s specific needs
Once you’ve met the must-haves in your recurring billing software search, it’s time to dig deeper.
The subscription business model is growing at breakneck speed. Your business’s ability to adapt and navigate the rapid pace of digital transformation determines its future viability. You need more than just software to manage customer subscriptions—you need a real revenue optimization engine.
Evaluate your business’s place in the market and figure out what special features may be “nice to have” for others, but game-changers for you. These might include things like:
- email and/or text notifications
- support for A/B testing
- contract management
- reseller management
- integrations with software like an ERP, CRM, and taxes management, or
- highly robust API.
The most essential thing when evaluating billing software is proof of concept
You can shop around and read about your options all you want. However, at the end of the day, you won’t know which billing software works best for your subscription business until you put it to the task.
The best thing you can do, then, is test out the most promising platforms. Ask for a trial account or sandbox and input actual business data to see what the billing software does with it. Create API workflows as part of this test.
And call sales engineers, if available, to learn how to make the most of tools or overcome hurdles.
This testing phase takes time, but it’s worth it.
Testing prevents you from investing in a bad-fit platform, and lays the groundwork for when you find the right one.
It’s also crucial to have some understanding of the post sale customer support provided by the vendor.
The best recurring billing software is multifunctional and customizable
The rules on perceived value are changing. Your subscribers want software partners: products that grow alongside them, pushing traditional, one-time purchases closer to obsolescence as digital transformation moves to the forefront.
Subscription companies are uniquely positioned to thrive in this market, especially as digitization and big data rapidly expand.
Modern, adaptable recurring billing software allows subscription businesses to make payments, accounting, and other recurring billing functions a breeze to boost cash flow and incite business growth.
Finding the best recurring billing software for your business requires looking past just flashy, “sexy” features and UI, and digging deep into what will actually work to positively transform your business. It requires testing things out and seeing whether or not there are workarounds to any gaps discovered.
Don’t rush the process; take the time to do it right, and you’ll never have to shop for a billing solution again.