Recurring Billing

10 Reasons You Shouldn’t Invest in Billing Automation

Adolphus McKoy | September 22, 2022

You may have heard the rumors: Automated billing speeds up the invoicing process. It aids in dunning management. Provides robust analytics, and generally integrates with most components of a well-oiled tech stack.

Well, we regret to inform you that these rumors are completely factual. Automated billing can have a major impact on the businesses that utilize it. If you’re uncomfortable with change, keep your distance.

There are many reasons to shun billing automation. The more you know about it, the better prepared you will be to avoid its wicked ways.

1. You like to leak money

Most businesses want to collect every penny they are owed. But isn’t that exactly what the competition would expect you to do? Keep them on their toes by using revenue leaking software.

You’ll certainly have a leg up on CoConstruct when it comes to originality. Oh sure, they were you like you once. When the business grew fast, their old billing system was unable to keep up—leaving thousands of dollars in uncollected sales tax on the table each month.

Unfortunately, that all changed when they switched to an automated billing platform. Now, revenue leakage is but a distant memory, and their processes have never been faster.

2. You like keeping your AR team busy

Billing automation frees up countless hours for the accounts receivable (AR) department. Where before they might have had to work overtime just to get all the invoices out, with an automated billing system they experience manageable workloads and work what some people (softies, we say) would call “reasonable hours.”

That’s exactly what automated billing software did for JustLogin. When this cloud-based HR company began to grow at a rapid clip, the billing department had its work cut out for them. It took their team two weeks of overtime work each month to get invoices out to the business’s eight hundred customers.

Since adopting an automated billing system, time spent on invoices has shrunken by 90%. But we ask you, aside from JustLogin, their customers, and their staff, who really benefits from this change? Exactly.

3. You enjoy adversity, even from your product catalog

Automated billing systems make it easy to update your catalog with the press of a few buttons. Strange, I know, but it turns out some people are into that sort of thing. They like being able to bring a new product to market the moment it’s ready so they can outpace the competition. They don’t enjoy bringing in developers (even though they are very nice people!) just to make minor catalog adjustments.

Well, they can have their billing system and its catalog flexibility. You will stick to your way. The much, (much, much) harder way.

4. You think involuntary churn keeps things fun and exciting

Involuntary churn happens when someone who wants to continue being your customer is accidentally kicked out. Some experts believe that up to 20% of churn is involuntary. A business’s involuntary churn numbers are usually directly tied to its dunning management strategies.

Legacy systems have a really fun approach to dunning management: Everything is done by hand. When a customer can’t be reached, they are booted! Probably forever!

Well, as you might have guessed, billing software has its own way of doing things. Subscription management software allows businesses to automatically retry card payments, while also sending out reminder messages, so willing customers can stick around for as long as they want.

Stable churn numbers. Predictable revenue. Where’s the excitement in that?

5. Your customers don’t require custom plans

You’ve probably heard it one thousand times: the customer is always right. Give them what they want! Do you know why you’ve heard it so often? Because it’s a cliché.

Customers don’t need custom plans that are tailored to their precise needs! They want you to be stern and inflexible with your product offerings. Tough love.

Of course, automated billing systems would have you believe differently. They’ll tell you that almost 50% of consumers have made a purchase based on personalized sales approaches. Classic billing automation solution propaganda.

It’s no wonder automated billing software is quick to point this out: it allows businesses to make bespoke offers in a matter of minutes.

Good thing your customers don’t go in for silly things like that.

6. You like to bring products out to market slowly

Businesses with an effective automated billing system enjoy (their word, not ours) the ability to easily bundle features, update their catalog, and experiment with pricing. All features that make bringing a new product to market much quicker.

Do you know what life in the fast lane gets you? Speeding tickets.

Let those with automated billing solutions get products out to market quickly. You’re more than happy to take your time.

7. You’re a non-compliant type

Everyone operating in the subscription billing space is well-aware of ASC 606—the current revenue recognition standard that accounts for approximately 60% of the SEC’s fraud cases. For businesses that are interested in compliance, revenue recognition is a key component of their billing processes.

A dual ledger-backed automated billing solution makes compliance easy by recording transactions in an ASC 606-friendly manner. The automated billing system integrates with existing accounting software to keep all the payment processing information neatly filed and safely stored.

Sure, businesses using an automated billing solution avoid fines and jail time, but they don’t get to go to work like Tony Soprano, always wondering when the boys in blue will close in.

8. Data isn’t for you

Hey, I get it! Too many numbers, right? Yet another of automated billing’s many evils. Subscription management tools provide lots of analytics. What features are being used? What sort of people spend the most on your products? What sort of revenue can you expect for next quarter?

All of these stats can be used to provide actionable insights for businesses that want to improve their marketing efforts or boost sales numbers.

At least that’s what the statistically inclined claim. But do they have the numbers to back it up? Oh, they do?

9. You think software integrations make things too easy

Good billing software will integrate effortlessly with your CRM and ERP so that information can be shared seamlessly between tools. No more calling Sally from sales for a stat. It’s already right there in front of you, free from the reaches of human error.

Convenient? Sure. But where’s the challenge?

10. Your customers don’t like self-service support

Around 40% of consumers prefer self-service over contacting customer support. Of course, none of these people do business with you. No, your customers like to call in the old-fashioned way. Wait on hold. Get transferred from department to department. Ask their question. Then spend approximately the amount of time it takes to watch a Marvel movie asking it over and over again until someone who can help them hops on the phone.

Hey, it’s a customer service tradition.

Turns out people who use automated billing aren’t the traditional sort. Automated billing software provides customer portals that make small account adjustments a simple, quick procedure. That means no more needlessly long customer service phone calls.

Success is supposed to be hard!

So, there’s no denying that automated billing software makes things easier. But do you really want that? Success is supposed to come at a cost. You want the frustration of a needlessly long invoice cycle. The setbacks that come from involuntary churn. The energizing prospect of ASC 606 non-compliance-related jail time. Who needs coffee with that hanging over their head?

If you enjoy those frustrations, don’t walk but run from the next person who mentions automated billing to you. They don’t have your best interests at heart.

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Adolphus McKoy
Adolphus McKoy
Account Executive, Stax Bill