Recurring billing is a massive asset for SaaS businesses, especially when your transaction volumes are growing quickly and your business is expanding into international markets. However, these benefits of automated billing can run out if your solution cannot grow with you and ensure customer satisfaction.
While there are benefits to switching between automated billing solutions as a SaaS business—especially if you’re currently struggling with legacy billing systems—the process of selecting the right provider and making a seamless transition can seem overwhelming. Many businesses end up delaying making a switch, and creating a bigger challenge for themselves in the long term.
For example, a lot of SaaS businesses have deep concerns about the time and effort involved with configuring new billing systems. One or more team members will need to adjust their busy schedules to research software solutions, and then determine what key features or tools are needed to solve their business’s pain points.
The implementation itself can also cause a lot of anxiety. How much effort will be required to get a new system up and running? And of course, what will it all cost? No one wants to be disappointed by selecting the wrong provider—one that doesn’t live up to their expectations.
In this blog, we’re going to cover how to assess the shortcomings of your current recurring billing system, how to select the right automated billing solution for your needs, and how to ensure successful implementation so that your business isn’t forced to slow down.
TL;DR
You can prepare your business for a smooth implementation of your new billing platform by organizing product catalogs, ensuring accurate customer data, and providing thorough staff training to ensure a successful transition.
Switching to an automated billing system reduces manual errors, saves time, and improves overall billing efficiency, allowing your team to focus on core business objectives.
Look for systems with automatic invoice generation, recurring billing, flexible subscription management, integrated payment processing, and robust security features like PCI Level 1 certification.
What is a recurring billing system?
Recurring billing is the core revenue engine of the subscription business model. Making the right choice in a provider is vital to timely payment collection, especially during times of uncertainty. You want to make sure invoice generation is instant, payments are being collected, and operations are as smooth and efficient as possible, so your team can focus on your core business objectives.
A recurring billing system removes all of the friction from the above workflows. Instead of manual intervention every time your business needs to collect a payment or send an invoice, recurring billing software does this according to the schedule and timing you set, without needing your team to hit a button or send an email.
If your business is considering making the switch to an automated billing system, but your team is feeling a little overwhelmed at the prospect, the following steps will help. It answers a lot of important questions that SaaS businesses have regarding what billing automation can provide, and what it takes to get your business successfully transitioned.
It also provides some pretty convincing reasons why making the switch can lead to new levels of growth and prosperity for your business—for a cost that’s less than you might think! .
Understand Your Business’s Current Billing Gaps and Inefficiencies
Having a thorough understanding of how your current billing system is holding your business back can help you move toward a system that will propel your business forward. For example, while it’s common for start-ups to use manual billing processes, this quickly becomes an unmanageable process at scale—not to mention it’s often a gross misuse of talent. So, countless hours get dedicated to performing repetitive billing-related tasks that could easily be automated.
There’s also the issue of human error. When repetitive tasks are performed by humans, there’s always the risk that mistakes will be made. Businesses using manual billing processes often suffer from revenue leakage, compliance issues, and various other persistent customer-facing errors that can negatively affect reputation.
Legacy and manual billing processes often lack flexibility when managing product and service catalogs and the technical sophistication needed to offer customers new deals, discounts, and account alterations in real-time. The continual updates and changes required to compete and meet market demand create a huge drain on time and financial resources.
Dunning management, comprehensive data collection and storage, and in-depth business reporting and forecasting are just a few of the many areas your business may be lagging behind in if you’re still chugging along without an automated billing system.
So, what’s out there in terms of billing automation solutions, and how can you select a provider that will solve your business’s pain points?
Find the Best Automated Billing System for Your Business
Switching to automated billing software is an important step toward more efficiency and profitability for your business , so it’s well worth dedicating some time toward finding your ideal solution. Once you’ve taken stock of any specific feature gaps and inefficiencies, you can use this information to guide your research in the right direction.
There are several features you should look for while browsing software options and communicating with potential providers, including:
- email and invoice generation
- flexible catalog and subscription management, including ease of plan upgrades and downgrades
- customizable billing cycles e.g. one-time, metered, usage, recurring, or hybrid billing
- a self-service customer payment portal synced with the billing engine
- integrated payment processing
- dunning management and revenue recovery
- double-entry accounting support
- revenue recognition
- subscription analytics and reporting
It’s important to ask any potential automated billing software provider about their integration capabilities with your existing business systems . This will provide your business with greater operational flexibility as you scale.
You should ensure the provider you select offers world-class security features, as issues surrounding privacy and security are at the forefront of many industries right now. The best automated billing systems will provide your business with a range of security elements, including:
- state-of-the-art firewalls
- tokenization
- network intrusion
- content delivery technology
- application audit logging
- domain authorization
- IP address restriction.
The billing system you select should also be backed by PCI DSS Level 1 certification, ensuring your service provider will be audited yearly by a third party to maintain certification and compliance.
Concerned about cost? By going with a cloud-based service, you can avoid having to make a huge upfront investment in building static systems and hosting. Cloud-based systems offer affordable monthly payment options, as well as regular developments and software releases to keep your business on the cutting edge.
Like with any transaction, customer service shouldn’t be downplayed. Read reviews and make sure other customers have been happy with the speed and quality of service offered.
In addition to this, the provider you select should always listen to your concerns and work with you and your team to find solutions that fit. The best solutions will even work with your team during the pre-sales process to confirm they’re the right fit for your company before you make the investment.
Once you’ve asked all your questions and are satisfied you’ve found the right billing solution that can meet—and hopefully exceed—the needs of your business, it’s time to get your team ready to make the switch.
Prepare Your Business to Make The Switch
Even the best automated billing platforms require some upfront effort to get rolling. But the right billing solution will guide you through the process.
A crucial first step is often to get your entire team working toward the same goal. There may be a lot of interest about the process—or even some push back from staff with some lingering legacy mentality. Getting your company on board to change processes that everyone has gotten used to is never easy, but it’s essential for a smooth transition to a new billing system.
If you’re the business leader, make sure that there’s a long window to get everyone ready for this transition and give time for people to ask questions. No matter how great your new billing solution is, nothing good will come out of rough transitions that don’t have full company buy-in.
While undoubtedly, your provider will be an expert at the transition process, you’re the expert of your company and your data. Making yourself or your dedicated staff member(s) available ensures all your information—from your simplified catalog to your scrubbed data—is loaded correctly into your billing system. It will also expedite the entire process to get you and your team working on your new system as quickly as possible.
How to Implement a Recurring Billing System Successfully
You can select the greatest automated billing solution for your needs, but it’s not going to solve your business’s pain points unless you have a proper implementation roadmap. Before starting any work on setting your automation software to live, you need to complete the following steps:
Step 1: Create an implementation plan
This will be your single source of truth throughout the implementation process. The plan should outline the following information:
- Your timeline for implementation with key milestones
- Plan for data migration/backups in the case of implementation problems
- Integration roadmap for existing business systems e.g. CRM, accounting software, payment gateway
- Staff training schedule (either designed in-house or based on modules given by your billing provider).
- Testing rounds/phases before the go-live date
Ideally, the implementation of your billing solution should be overseen by a dedicated person or team who can monitor progress and flag any problems as implementation progresses. Making yourself or your dedicated staff member(s) available ensures all your information—from your simplified catalog to your scrubbed data—is loaded correctly into your billing system. It will also expedite the implementation process to get you and your team working on your new system as quickly as possible.
Step 2: Migrating data
Switching billing systems involved migrating huge amounts of data—customer data, subscription information, online payment details—from one platform to another. The complexity of this transition will depend on the platforms involved and what third-party integrations are available.
Before migrating any data, this is the perfect time to have a proper spring clean and remove any information that is no longer relevant, such as outdated customer profiles, billing plans, and payment information. You may think it’s ready to be loaded into the new system, but it could likely benefit from a bit of scrubbing. You need to start with good data to get the best results from your automated billing system. This will also make it easier to map data fields between your old and new systems.
For each of your clients, ensure you have the following:
- Up-to-date contact information
- Start and end of their billing cycle
- Any special terms or payment arrangements
- Current payment information
- their product/service subscriptions, including the quantity of each and any special pricing agreements
Once you’ve completed any necessary customer data adjustments and updates, you’ll be ready to get started with implementation.
Step 3: Configure billing
Once your data is ready, you can begin configuring your new automated billing system to your specific business needs. This might be a relatively quick process or more complicated, depending on how many features you’re utilizing in the software.
At a minimum, this will involve defining pricing tiers for your software, selecting billing cycles, setting up recurring payments for subscriptions, customizing invoice templates and email notifications, and configuring the correct revenue recognition rules.
Separately from this, you’ll need to ensure that your payment gateway and selected payment methods are functioning correctly and that test payments are passing through your merchant account.
Step 4: Security protocols
When you implement your new billing system, you need to be confident that everything is functioning which is essential for maintaining security standards and compliance requirements for PCI DSS. Otherwise, you could be at risk of a data breach—no matter how strong security (theoretically) is with your new provider. This process should include implementing strong encryption for data at rest and in transit, setting up appropriate user permissions, and implementing audit logging for all system changes and admin access.
Step 5: Staff training
No matter whether you’re a small business or an enterprise-level entity, getting all of your staff up to speed on your new billing solution is essential for a smooth transition.
Make sure you provide comprehensive training to all relevant team members, such as Finance, Accounting, Customer Support, Sales, and Account Management. Your tutorials should cover all of the fundamentals of using the billing platform, such as system navigation, common customer FAQs, revenue recognition practices, billing cycles, and security protocols.
Your new provider should be able to help you by providing detailed documentation and tutorials, which you can make available to your staff for ongoing reference.
Step 6: Test, test, test!
Before going live, make sure that you conduct numerous tests of your new billing system. This should include testing individual features like recurring billing or invoice generation, software integrations, and testing of all of your billing cycles. While as process can be time-consuming, it ensures that you can make the transition to your new platform with full confidence and avoid teething issues.
Make The Most of Your New Automated Billing System
Once you’re all set up, work with your provider to ensure you’re squeezing all the value from your new subscription billing platform.
This means connecting with your dedicated customer service representative to get the support you need, and speak up if something isn’t working the way you need it to. The right provider will be happy to receive your feedback and guide you in the right direction.
Note that this is an ongoing relationship where you can run into technical issues or problems even once your billing software is well-established. Being proactive and even providing feedback on features/capabilities you would like to see is the best way to ensure your investment goes from strength to strength.
Remember: It isn’t just your finance team that will benefit from switching to automated billing. Your new system will enable your marketing team to dive deep into your analytics to gain new insights into your customers. Your sales staff will have a better understanding of current market demand and how to modify your subscription pricing to create new offers. Your leadership team will be able to perform more accurate revenue forecasting to not only make more sound decisions about the business’s future direction and growth, but also manage any potential risks.
Ultimately, your entire team will enjoy greater flexibility and functionality, more time to focus on what really matters for the business, and peace of mind with regard to security and financial processes and procedures.
Switching With Success, for Success
While changing to an automated billing system may seem like a daunting undertaking, it can actually be a pretty seamless process–if you select the right software and have a solid plan for implementation. Billing and invoicing automation will create many new cost- and time-saving opportunities.
For example, automating your credit card retries and expiry reminders alone can help you uncover thousands of dollars in revenue leakage within the first few months of implementation.
And the time your staff can save by not managing these billing activities and other business processes manually will eliminate the bottlenecks that have been curbing your business agility.
But to really reap these benefits, you need a proper workflow in order to ease the transition from one system to another and ensure that your team feels supported and understands your new billing solution.
So, don’t let your fear of the process hold your business back from making the switch any longer. Chances are, you’ll wish you’d done it a lot sooner.
FAQs about Automated Billing System
Q: What are the benefits of switching to an automated billing system?
Switching to an automated billing system allows businesses to save time and money, streamline their invoicing processes, reduce errors, facilitate customer communication, and provide comprehensive data collection and storage. It also enhances dunning management along with revenue recovery and enables efficient financial forecasting.
Q: What could be potential concerns while transitioning to an automated billing system?
Some businesses may worry about the effort and cost involved in the transition process, including staff training, system implementation, and integration with existing technologies. Additionally, meeting the specific billing needs of their business and adjusting to a new system may prove challenging for some.
Q: What features should we look for while selecting an automated billing system?
A comprehensive automated billing system should include features like automatic generation of invoices, flexible catalog and subscription management, timely and accurate billing irrespective of plan complexity, a self-service portal, integrated payment processing, double-entry accounting support, and in-depth analytics.
Q: What security features should an automated billing system have?
Automated billing systems should be backed by world-class security features, such as state-of-the-art firewalls, network intrusion prevention mechanisms, content delivery technology, application audit logging, domain authorization, IP address restriction, and PCI Level 1 certification.
Q: How do I prepare my team for the switch to an automated billing system?
Firstly, the whole team should work together towards the transition. Organize your product and service catalog, and then ensure you have up-to-date and error-free customer data. Allocate time for onboarding during the initial transition period, and work closely with your provider to make sure the system meets your needs.
Q: How can an automated billing system benefit various business units?
An automated billing system provides valuable insights into customer behavior, enables modification of subscription pricing to create new offers, helps in understanding market demand better, and imparts accurate revenue forecasting. This can substantially aid your marketing, sales, and leadership teams in their respective functions. The system also ensures compliance with GAAP and facilitates easy acceptance of various payment methods.
Q: Can the cost of transitioning to an automated billing system be justified?
Although there might be upfront costs, the transition to an automated billing system can lead to significant cost and time savings in the long run. Automating billing activities can help uncover revenue leakages, boost cash flow, enhance customer experience, and eliminate manual process bottlenecks, thereby justifying the initial investment.
