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