Unlike the past, the approach to software delivery is no more a “one-time purchase” affair!
An increasing number of companies in the technology industry have realized that scaling a SaaS business without a consumption-based billing platform is almost impossible. Rather than selling single units, shifting towards a recurring billing model is garnering more opportunities and benefits for both customers and businesses.
However, to reap maximum benefits of a subscription billing model, you need to ensure it has got the best practices in place.
And in this blog, we are going to take you through these best SaaS Billing practices that would help you get the most out of it.
1) Simplify Pricing Model
Different customers have different service-usage, thus, have different billing needs. And for you, billing requirements will differ at every stage of growth. Customers can easily correlate the services that are offered, the prices that they are offered at, and the value they obtain from your service. A complex pricing model can easily confuse and frustrate a customer, eventually leading to higher churn.
So, you need to ensure that your pricing model is kept simplified and logical so that your customers can choose the right plan as per their business needs. Discover effective SaaS pricing strategies for optimal growth.
2) Streamline Your Billing Process
Most SaaS companies that use manual billing process happen to experience revenue leakage. This is because they are not receiving the complete payment for the services they provide.This may happen due to:
- lack of a defined process to set reminders for customers about their upcoming payments
- delay in sending payment requests to customers as per their payment due date
- lack of an automated process that keeps a check on credit card expiries
- not having a process to send notifications for declined credit cards
As a SaaS company, the services that you offer can include API integrations, data reporting, third-party vendors, access to web interfaces and technical support. And with the due course of time, customers might feel the need to upgrade, downgrade or customize their service usage.
In that case, you should enable your customer to adjust both their billing plan and cycle as per their feasibility.
Without an automated billing management platform, it is quite impossible to track and collect payments for every customer as per their service usage.
Here, an automated billing management system can generate automated emails and streamline payment collections that can help you recover leaked revenue to a large extent.
3) Fast-track the Pricing Change
Pricing of your SaaS product and service can fluctuate over the course of time. It might happen due to market fluctuation, seasonal offerings and discounts or changes in customer demand. Companies that scale their businesses practice making changes in their pricing strategies on a more frequent basis. Undoubtedly, the process can be quite frustrating considering multiple currencies transactions.
However, with an automated billing platform, you can save a lot of time and effort of your finance team as you can get a new pricing catalog ready in just few minutes.
A good subscription management software will offer the flexibility to make frequent pricing changes and customization required by different customers.
To know more about subscription billing platforms, check out our blog on “Looking for a Subscription Billing Platform? Here are some Must-have Features to Consider!”
Moreover, there is a high probability for a customer to convert if they receive a promotion or coupon code.
A billing system with a built-in Coupon code engine will enable you to generate promotional coupons on both small and large scales. Be it seasonal offerings or the usual marketing promotions, discounts can be applied across the entire catalog for the desired time.
You can also offer specific discounts and coupons to selected plans and even to customers and broaden marketing and sales scope for your company.
4) Reduce Churn Rate
In SaaS business, getting a new customer onboard is costlier than retaining an existing customer. And when there is no timely notifications sent to customers for renewals and payments, there is an increased churn risk.
A subscription billing system would regulate automated communications to the customers notifying them about upcoming payments.
The recurring billing platform that you pick must also enable you to integrate multiple payment gateways for multi-geography audience. Further, offering multiple payment modes along with multiple currencies setup will facilitate you to accept payments across the globe, enhance customer experience, and prevent subscription cancellations, all at the same time.
5) Leverage Data to Forecast Revenue
Generally, there is a ton of data collected about your customers and their service usage. When consolidated and analyzed, this data would give you an insight about the cash-flow trends with respect to customer activity. Hence, you will be able to track lost payments and monitor deferred revenue.
Now, you can imagine the impact it will have on forecasting the billing and pricing changes, and your overall business growth.
A capable revenue management platform assists you in analyzing customer demands and project revenue over the time. Subsequently, it will help you implement new processes apart from acting as a capable financial record system.
This certainly means your team will always have access to the most accurate and updated information to make business decisions at their end. Ultimately, you will get all the complex math done in less time!
Picking the right billing management platform is crucial for your SaaS business as it not only resolves challenges that a manual process can’t, but also helps you focus on scaling your business. You can invest more time and effort in exploring opportunities to make operational changes, introduce new products or services, and enhance customer engagement.
With Muvi Billing’s optimized, automated billing system, you can be assured of having end-to-end management of your customer’s complex tax compliant billing processes, payment schedules, recurring revenue streams and more.
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