What’s Flexibility of SaaS Billing Processes to Grow your SaaS Business
For a while now, the tech industry has been moving away from traditional SaaS billing practices and towards more flexible billing. This has reduced barriers to entry and allowed a number of SaaS businesses to automate their processes.
As more and more businesses shift to pay-per-use and other variable pricing models, automated billing software are becoming a popular fintech tool, especially for the increasing number of SaaS subscription-based businesses that deal with recurring billing. However it is important to first understand the different types of B2B SaaS billing models which exist:
- Flat Fee Billing
- Usage-Based Billing
- Hybrid Billing
- Subscription Box Billing
- Pay Per Use Billing
- Demand Based Billing
However, one wonders, how does subscription billing help SaaS businesses efficiently invoice customers and manage their billing processes? The latter usually cost businesses thousands of dollars’ worth of revenue if done manually, owing to human errors, inefficient allocation of resources and, payment failures. Here are some of the best SaaS billing practices that simplify your life!
Quick changes in Price
Service or product prices can change due to market fluctuations, periodic sales, discounting, evolving customer demand and changing customer billing plans. Especially when subscription businesses are dealing in multiple currencies, they tend to alter their billing strategies more often, and this process can be quite frustrating, with all the conversions and tax rules involved.
Automated billing software enables businesses to develop a varied price catalog in a minute or two without making their finance teams work extra hours. These platforms allow firms the flexibility to also customize prices according to customers’ needs, for instance in the usage-based billing where customers are charged only according to how much of the product they are using.
If a customer has used more than his given package, B2B SaaS billing models can upgrade his plan automatically or offer him a hybrid billing option. Also if you want to offer discounts and coupons to customers a robust SaaS billing process allows you to immediately apply discounts across the entire catalog for any period of time you select. Moreover, your team is able to offer specific coupons on select plans or to customers. These possibilities create a ton of opportunities for the sales and marketing teams.
Preventing Revenue Leakage in SaaS Billing
A number of B2B SaaS subscription billing businesses experience a leaky revenue faucet when they use manual billing processes. This can because of delayed payment requests from customers, inefficient systems for retrying errors in payments, and failure to send reminders to customers about their credit card expiries or following up on cards that have declined. Using an automated SaaS billing process means you get automated dunning management systems that facilities you with automated payment collection, emails, and retries that recover 1 to 4% of your leaked revenue.
Leveraging usage data to predict change
SaaS billing systems collect loads of data about customers how much of the services they are using. This data can be utilized to further track and understand the effect your billing changes are having on customer trends. The right SaaS billing processes help you anticipate the impact of billing changes on customer product demands, implement new processes, visualize revenue projections, and understand how various pricing incentives affect product usage.
An important tool that SaaS businesses need to have is a mechanism for quick insights and high-level reporting. Using an adaptive and automated subscription management system allows businesses to compare and review their financial performance, access MRR (monthly recurring revenue), analyze cash-flow trends, monitor activity customer triggers, and get updates on lost and deferred revenue.
This then facilitates the SaaS billing process to be more efficient and error free. Automated subscription billing platforms also consolidate and manage all the recurring revenue data in one place, making it a system of financial record. This means that each member on your team will always perform their duties and make business decisions relying on accurate and up-to-date financial information.
Churn Rate Reduction
A crucial SaaS billing process is retaining customers. It is widely known that acquiring new customers cots more than retaining current customers. Unlike manual billing methods, an automated SaaS billing process provides notifications on ongoing customer payments and renewals to recover failed payments and identify when a customer is about to get frustrated enough to leave due payment failures. This warning can be used to retain customers timely and avoid preventable churn.
Implementing a suitable subscription management software effectively optimizes your business processes or B2B SaaS billing models. The right software enhances your customer experience and takes the load off your team because both do not have to struggle through a long list of manual processes.
If you are looking for options SubscriptionFlow is one solution that automates and optimizes the billing processes and streamlines revenue for your subscription business. Built for the changing needs of SaaS companies, it helps businesses gain the agility required to maintain their competitive advantage.