Intro to Billing Platforms /

Time to upgrade

Maybe your current billing system is outdated. Maybe it’s responsible for too many errors. Maybe you’re leaving too much money on the table. Whatever the problem, you know the answer: upgrade to a modern, automated billing system. Here’s all you need to know to make good on your purchasing power: what to look for, what features might help your business best and how it can help you grow revenue.

What is a billing platform?

A billing platform is a solution that enables organizations to bill and invoice their customers. A comprehensive billing solution supports multiple customer profiles, agile billing cycles, and multiple currencies, along with automated invoice generation and automatic payment reminders.

Most billing platforms that offer subscription-based pricing models also offer automation capabilities and the ability to manage multiple pricing models like one-time payments, metered, tiered, consumption, or usage-based billing models.

Why do you need a billing platform?

A billing platform automates your billing processes and reduces accounting errors arising from manual data entry systems. Automated billing systems give you more control over cash flows and create an efficient and accurate business process that allows you to automatically compile costs, quotes, and generate invoices. This translates to increased profits because your invoices will be more accurate, saving the company any revenue leakage.

Automating billing is a crucial step for any business interested in growth. An automated billing solution provides businesses the agility to experiment with new pricing and revenue models and test new business ideas that will help them to quickly adapt to changing market needs. This allows them to remain competitive and scale their business.

Why is it important to find the right billing platform?

A billing platform is a core component of an organization; a good billing system can substantially increase productivity and profitability. It can reduce overhead costs and improve customer retention. So choosing a billing system is one of the most important decisions a business ever makes.

A good billing system needs to support your business not only in the present but should also be able to scale with you as you grow or your business prospects could flounder. Look for a solution that works hand-in-hand with your existing systems and your pricing model or it can lead to unhappy customers and lost income.

Businesses that choose a poor billing system have a difficult time scaling. This is because a poor billing system can lock you into a cash flow issue. On the other hand, when you choose the right billing solution partner, you can start to generate more revenue streams.

How do you choose a billing platform?

There are many options available for subscription billing and management software. To make the best choice in billing software, you should consider your budget and billing requirements. Carefully assess your business operations needs against the features and benefits offered by the billing platforms to understand which provider best meets your needs. You can follow a step-by-step process to select the right subscription billing system for your organization.

  1. Choose a billing provider that boosts customer retention
    Billing is one of the most important functions in your organization and it can make or break your customer experience. The billing platform you choose has to meet the following customer expectations for a frictionless billing experience:
    1. Drive down customer complaints by providing clear and easy to understand invoices and deliver a positive customer experience
    2. Support multiple pricing models so that you can offer a mix of monthly recurring, and annual subscription contracts or usage-based models
    3. Reduce customer churn by aligning your product price with its value so that they know exactly what they are getting for their money
  2. Billing systems should enable back-office automation
    A good billing software will make it possible to streamline your business processes and simplify your life. An automated billing system helps avoid manual errors which might cause incorrect payments and other inconveniences.
    1. The billing system should provide product purchase tracking
    2. Accept multiple payments methods like ACH, credit, or debit card and other local payment methods and multiple currencies
    3. Back multiple subscription billing and payment schedules and adapt to complex billing terms
    4. Facilitate outcome-based pricing so that customers can choose their plans based on their specific needs, allowing them to have more control over the outcome, and therefore experience more satisfaction
    5. Automate analysis and automation and ensure that the systems integrate with your business systems so that you can focus on scaling your business
  3. The billing system should protect your bottom line
    A modern billing system will allow you to track and analyze your revenue and cost, and it will help you to identify issues and make timely adjustments to solve them. It will help reduce the money you pay for customer service by eliminating time-wasting errors, decreasing your monetary exposure for lost receipts and invoices, and improving cash flow management. It should help with the following:
    1. Stop revenue leakage by eliminating manual billing errors and boost the accuracy of your collections
    2. Increase average revenue per user by giving you the tools to provide a number of service combinations and packages that your customers desire
    3. Reduce upfront barriers by reducing high entry costs
  4. The billing system should adapt to your business
    An agile billing system should be user-friendly and continuously adjust to your business's needs. If your business fluctuates, your billing system should be able to handle it. It should support your growth by bringing all divisions into the process.
    1. Support all governance and regulatory requirements like PCI, SOC1, and SOC 2, among others
    2. Improve visibility into customer usage by providing real-time metrics and analytics like monthly recurring revenue, churn rates, etc.
When is it time to upgrade your billing system?

If you sell subscriptions, then it’s worth investing in a system that can manage recurring billing and handle complex billing scenarios including usage-based billing. There are some apparent signs that your billing system needs an upgrade which we have outlined below:

  1. Your billing system is no longer able to support new services and pricing models
  2. You are under-billing customers due to manual calculations of customer usage leading to revenue leakage
  3. Your back-office billing is overworked and processes inefficiently, causing delays and errors in invoicing
  4. Customers are leaving feedback about incorrect billing
  5. Multiple errors resulting from manual billing practices
  6. You find it challenging to generate accurate reports and gather customer insights
Is there a checklist for choosing a billing platform?

The billing platform you choose should have the flexibility required by modern businesses that sell subscriptions and support business expansion. The must-have traits for a billing platform include adaptability and extensibility, automation, customization, and agility.

Use the checklist below as your guideline for choosing a billing platform:

  1. Manages multiple pricing models including subscriptions, usage-based pricing, quantity-based, tiered, or metered models
  2. Flexibility to modify billing plans and add-ons, and add one-time charges
  3. Offers the flexibility to change, remove, or add products with ease
  4. API first billing system native to the cloud
  5. Supports multi-currency billing
  6. Extensive integration with commonly used tools and apps
  7. Supports multiple billing schedules: monthly, annual, or custom
  8. Automates contract renewals
  9. Allows customers to view, and pay their invoices via a customer portal
  10. Is able to monitor credit card transactions for failed or fraudulent transactions
  11. Automates invoicing and provides a breakdown of all usage charges and taxes
  12. Manages billing exceptions and complexities like credits and refunds
  13. Offers promotional coupons and, discounts, and tracks redeemed discounts
  14. Offers real-time usage data and analytics, and insights on customer behavior
  15. Provides real-time actionable metrics like customer churn and customer retention rates, annual recurring revenue (ARR), monthly recurring revenue (MRR), etc.
  16. Complies with necessary regulations like PCI, GDPR, CCPA, and meets the requirements for network and physical security
How can marketing leverage a billing platform?

Marketing is an essential business function to generate new leads and has the potential to creatively engage customers. Unfortunately in most cases, people are constantly bombarded with unnecessary marketing messages that they choose to ignore. Businesses have the opportunity to get past this "ignore reflex" and talk to their customers more regularly where they have the permission to communicate which is via billing invoices.

Once every billing cycle, your customers have granted you permission to communicate with them. They expect it because they entered into an agreement with you to communicate in a business context. The marketing department can take advantage of this permissible communication method through your billing platform to upsell or cross-sell services that may be of interest to the customer. The communication can happen via a paper invoice, text, or in the customer portal. The options for the mode of interaction are unlimited.

What are some billing platform features to consider?

Companies need to find an enterprise billing system that is flexible and adaptable to different business models and is able to accommodate future business growth. Some of the must-have billing platform features are a real-time online invoicing system, detailed reporting tools, transparent transaction fees, an online payment gateway system, and easy to use dashboard.

When you're looking for a billing platform, it's important to have the following features that will allow your business to thrive:

  1. Dynamic pricing: The recurring billing software you select should support a dynamic pricing strategy and allow for flexible pricing changes for product bundles. It should allow you to set different prices for different customers, and provide special pricing outside of promotions, and maximize revenue. The billing system should also allow customers to change pricing plans or pause and resume subscriptions easily
  2. Product catalog: The billing platform should offer a flexible and customizable product and service catalog and allow you to test new product roll-outs and changes to pricing models. It should also seamlessly handle promotions, discounts, and coupons
  3. Allow bulk updates: It's important to make sure your enterprise billing software will help you implement usage-based billing. It should also have the ability to make bulk updates in a short period of time
  4. Automated dunning strategy: The billing system should have the option to automatically remind customers about missed payments, retry failed payments, and provide information to make payments. It should also have a system in place to send out automated notifications for billing statements, credit card expiry warnings, etc.
  5. Customizable reporting: The cloud billing software you invest in should track and report the important metrics necessary for a subscription-based business including real-time customer usage data. This information should be available to the key decision-makers in real-time
  6. Customer portal and automated invoicing: The billing system should provide automated invoices that clarify the customer usage and billing details in an easy-to-understand template. It should also have a self-service customer portal that allows the customers to view and pay their invoices easily
  7. Compliance: Your chosen billing platform should meet all the security and compliance requirements like Payment Card Industry (PCI) data security standard for credit card payment processing. It should also abide by the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA) compliance requirements

Product Comparison

Scores gathered from G2 crowd system user reviews as of November 2021
Meets Requirements
Ease of Use
Ease of Setup
Ease of Admin
Quality of Support
Ease of Doing Business With
Product Direction
Batch Invoicing

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