Digital transformation: what a sexy term.
It conjures visions of a business being given a complete makeover, à la Cinderella, and emerging as a sleeker, more dynamic, and future-ready version of itself.
Of course, digitally transforming your subscription business takes more than simply waving a magic wand. To do so successfully, you need to adopt the right strategy and tools—and when you do, the efficiency gains your business sees will almost certainly be worth it.
At this point, most businesses’ digital transformations are well underway. But it’s important to remember that digital transformation is an ongoing process—with technology continuously evolving, so too should your digital transformation.
One key business function many subscription businesses tend to overlook when planning and executing their digital transformation strategy? Accounts receivable operations. But think of it this way: smoother invoicing and collections equal healthier cash flow—and a more financially sound business as a whole.
In this regard, modern recurring billing software is a must-have solution for digitally transforming your accounts receivable operations.
However, the power of subscription billing software goes beyond that.
It’s no fantasy: the right software has the potential to spread its magic touch across multiple business functions, and make the three core components of digital transformation—namely the overhaul of:
- operations, and
- customer relationships—a reality.
Let’s dive in.
1. Make tedious accounts receivable processes a thing of the past
No more duplicating and editing previous invoices or punching a calculator to compute prices. And gone will be the days of manually emailing invoices—especially if you’re sending dozens, or even hundreds, of invoices every day.
Not only is this copy-paste-send cycle monotonous for your billing team, but it’s also highly prone to human error. And as a result of that error, customer satisfaction with your business could take a nosedive if customers keep receiving inaccurate invoices. In a worst-case scenario, they may be compelled to churn out for good. But more on that later.
No more handling recurring payment processing through spreadsheets or outdated invoicing software. Your finance team can set up an invoice template in your subscription management solution and configure billing preferences like net terms and the length of each customer’s billing cycle.
Once the initial setup work is done, the subscription management platform will generate and email invoices to your customers on time like clockwork—no human action needed.
As shared in the B2B Payments Innovation Readiness Playbook by PYMNTS and American Express, 87% of businesses surveyed enjoyed faster processing speeds after automating their accounts receivable processes.
But that’s not all. Businesses handling more than 20,000 monthly invoices with automated invoice delivery, reported days sales outstanding (DSO) of up to 23 days shorter than their counterparts using manual, paper-based processes.
Separately, subscription management software can simplify related finance tasks such as revenue recognition, diligently recognizing revenue in the background. As a result, your finance team won’t need to manually calculate that period’s recognized revenue figures for each and every customer. Instead, they can direct their time and energy toward tasks that require more human creativity and input.
2. Empower your non-finance operations
It isn’t just your finance team that stands to benefit from recurring billing software: the potential gains can flow to other business functions too. Here are some examples.
Customers that contribute the most to your recurring revenue or have increased their spending with your business over time are likely to be good-fit, happy users of your product. Your marketing team can identify these customers by generating the relevant revenue reports in your subscription management solution.
Then, with this data in hand, it can hone in on the ideal customer profile it should tailor its messaging to.
At the same time, your subscription management software’s product catalog acts as a single source of truth (SSOT) for your sales team to obtain—and then promote—the latest details of your plans and prices. The software can also simultaneously track commissions to keep your sales team motivated.
Recurring billing software isn’t just an SSOT for your sales team, however. When customers reach out for help with their subscription, your customer success team needs to have historic info around customer subscriptions and purchases at its fingertips.
And where can it retrieve such information? You guessed it—your subscription management software. Consequently, your customer success team is empowered to render effective and timely assistance, or even pitch relevant upsells to boost your expansion revenue.
As the people responsible for driving the business’s future, the executive team will want to ensure its strategic decisions are backed by solid evidence and data. For this purpose, tap on your subscription management software to produce rich, insightful reports on key metrics like recurring revenue, churn, and more.
Armed with these reports, your executive team can then make the right decisions for the business, whether these relate to its day-to-day operations or long-term goals.
And because these reports can be generated on the fly, your executive team can have complete reassurance that it has based its decisions on the most up-to-date information available.
3. Elevate your customer experience
As touched on earlier, any manual-heavy process naturally invites human error. Automated invoicing thus improves your customer experience: after all, sending error-ridden invoices isn’t a professional look for any business.
Even worse if the invoice had understated the amount owed—if your business doesn’t want to eat the cost, it means you’d need to ask the customer to cough up more money to cover the shortfall. You definitely don’t want to leak the revenue, but the alternative has the potential to push customers away.
To further improve the customer experience, empower your customers to manage their subscriptions by themselves, 24/7, without even needing to submit a support ticket.
This can easily be done with a recurring billing solution that offers hosted registration pages and self-service portals for customers to purchase new plans, update billing details, or remit subscription payments on their own.
In the past, dental solution platform Instream would process new customer sign-ups by manually keying registration forms into its system. However, demand for its services eventually became too much for its staff to manage by hand.
Instream subsequently procured comprehensive subscription management software that not only automated its billing features but also allowed customers to DIY their registrations via a self-service portal.
As a result, the business was able to reduce the effort involved in registering and invoicing customers by a whopping 80%. The scalability of its subscription management software also meant that its customers would continue to enjoy the same smooth billing experience even as the business’s customer base grew.
And remember: the more you can improve the customer experience, the more you can maximize customer lifetime value.
Digitally transform your business with subscription management software as the catalyst
While subscription management software is the go-to solution for digitally transforming accounts receivable operations, the advantages of investing in such software don’t stop there.
A subscription management platform is also the key to:
- unlocking new growth opportunities,
- forging better customer relationships, and
- revealing the paths ahead for business success.
And these are only the tip of the iceberg!
Let subscription management software be your fairy godmother as your subscription business embarks on its epic digital transformation journey. After all, even Cinderella had a little help getting to the ball.