Across many business sectors, the way in which clients pay for products and services has fundamentally changed. Where items were previously purchased in a single, up-front transaction, sales are now often undertaken on a subscription basis.
Mobile phones, software applications, and gaming are all areas in which single purchases have been replaced with ongoing subscriptions. It’s also occurring in the entertainment sector. Rather than purchasing music CDs or movies, consumers are opting to subscribe to streaming services that provide large volumes of content for a set monthly fee.
For the businesses providing these offerings, this shift has caused challenges when it comes to the billing processes that underpin their operations. Managing one-off transactions is one thing, but many find themselves struggling with ongoing subscriptions.
Inefficient internal processes can lead to billing errors, revenue leakage, and customer churn. When this occurs, the implementation of an enterprise recurring billing software solution becomes a topic of management focus.
The benefits of recurring-billing software
The companies succeeding in this new subscription-focused marketplace are those that have harnessed the power of specialised recurring-billing platforms. These platforms are designed to automatically invoice customers for products or services rendered on a predetermined schedule such as monthly, quarterly, or annually.
Depending on the sophistication of the chosen platform, businesses may be able to gain a complete view of their entire invoice-to-payment process. The platform will also be able to give the business complete control over when invoices are sent and generate notifications and alerts to ensure timely payments.
Key features on offer
While some recurring billing platforms offer little more than basic features and functionality, more sophisticated alternatives offer true flexibility that can help scale and drive business growth. Leading platforms include:
- A single product catalogue: The platforms can help a business easily define and manage its entire range of products and services. They can apply discounting rules, define dependencies, and standardise offerings across all product lines.
- Customisable and configurable invoices: Leading recurring-billing platforms can allow staff to view invoices by geography, subsidiary, customer, or industry. They can also support complex account hierarchies.
- Improved security: Business clients will also be given an easy and secure way to make electronic payments using debit or credit cards or services such as PayPal. Payment security is enhanced with features such as SOC, PCI, and 3DSv2 compliance.
- Improved revenue recognition: Recurring billing platforms can streamline the task of revenue management by allocating, reconciling, and monitoring revenue for any pricing model, billing approach, or promotional offer.
- A combined solution: By combining billing, collections, and payment processing, a recurring billing platform can reduce days sales outstanding (DSO), improve cashflow, and stop revenue leaks.
- Integrated reporting and intelligence:
Businesses will be able to optimise billing by turning data into actionable insights through the harnessing of information across reporting, dashboards, and analytics. Factors that can be monitored include total customer value (TCV), monthly recurring revenue (MRR), cash flow, and customer churn. - Effective support for local billing requirements: Deployment of a recurring billing platform can ensure a business is able to stop worrying about factors such as multi-currency, multi-lingual, and regional tax requirements. Operations will be able to expand across borders by localising offerings to suit region-specific requirements.
- Tight integration with existing front and back-end systems: A recurring billing platform will allow a business to reduce time to market and gain a ‘single source of truth’ through seamless integration with existing service delivery systems, financial systems, customer relationship management (CRM) platforms and enterprise resource planning (ERP) solutions.
The business benefits that will flow from the deployment of a recurring billing platform are significant. As well as improving internal processes, platforms will significantly enhance the level of service delivered to customers throughout their entire subscription journey.
Consider how a platform could assist your business meet its growth goals in 2023.
