Not long ago, billing was strictly a function of the back office, and automation was typically prioritized after other business needs. For some companies, this is still the case. With the ever increasing speed of change, leading organizations are making billing a priority. They are not only moving it out of the back office but giving it an elevated status. As explained by MGI Research, when companies reposition billing to function as a strategic enabler and accelerator of monetization innovation and frictionless customer experience, they are able to solve many challenges such as customer disputes, internal inefficiencies, inaccurate reporting and forecasting, and revenue leakage.
Essentially, agile billing provides companies with a competitive advantage. Before diving into the benefits of an agile billing model, let’s get back to basics and define agile billing.
What is Agile Billing?
Agile billing can be defined on multiple levels of agility: business, product, and IT. Most organizations think about billing in terms of accuracy and evaluate their billing system vendors based on the functionality offered. Agility is more than that. It’s about business timing and velocity, which is particularly relevant to the billing function, as billing systems can dramatically accelerate or decelerate time to market.
By the very definition of agility and in this case business agility, it provides organizations with the ability to rapidly adapt to market and environmental changes in productive and cost-effective ways. Drilling down a level, typically agile billing systems are cloud-based offering a lower cost of ownership and simpler implementation. Designed to support sophisticated billing models, agile billing provides companies with the nimbleness and expedience needed to deliver frictionless customer experiences. In addition, the flexibility of an agile billing model provides companies with the ability to easily and seamlessly integrate with front- and back-office systems.
Agile Billing: Why Now?
It goes without saying, customers are more demanding than ever before. They want flexibility, transparency, and control. Today’s anything-as-a-service only perpetuates this need and innovative companies are taking the lead by delivering the experiences that keep customers loyal. An agile billing model breaks down the barriers between you and the customer. Since everything happens in real-time, it enables you to keep the customer at the center of your organization.
Let’s look at another slice of the agile business model benefits pie and talk about monetization. The days of straightforward billing of products and services are long gone. To remain competitive, businesses need the ability to quickly develop sophisticated pricing schemes such as one-time charges, packages, bundles, promotional offers, subscription-based, usage-based, dynamic, and hybrid. Providing a variety of pricing models gives customers a choice, enabling them to take control of their spending. It also provides businesses the opportunity to up-sell and cross-sell. Business opportunities don’t end there. It’s estimated that today there are 46 billion connected devices (Juniper Research) and by 2030 the internet of things (IoT) figure is expected to jump to 125 billion (Martech Advisor). This provides businesses with the opportunity to monetize the data that is exchanged between devices. However, the ability to monetize IoT requires an agile billing system that features a built-in mediation engine.
Next, we’ll take a look at examples of front-office and back-office systems. Typically focused on customers, front-office systems include marketing, sales, and customer service. Back-office systems support internal business operations and include accounting, billing, finance, inventory, order fulfillment, distribution, and shipping. Integration of these systems is essential to align business processes for improved employee productivity and to deliver quality customer interactions. An agile billing system allows companies to easily extend their enterprise ecosystem to include critical applications and systems such as customer relationship management (CRM), enterprise resource planning (ERP), general ledger, tax solutions, payments and more. Whether through custom-built connectors or application programming interfaces (APIs), integration to critical systems streamlines everything – from provisioning to accounting – decreasing errors and reducing revenue leaks.
Although some revenue leaks are easy to spot, others take diligence and time to locate and rectify. While you’re manually searching for the source of the revenue leak, profitability is seeping out of your business. As touched upon previously, tight integration to external systems will help to reduce revenue leakage. While a good starting point, an agile billing system streamlines processes – eliminating manual effort, increasing efficiency and reducing errors. An example of this process can be found in dunning management. An agile billing system automatically notifies customers when payments are missed or handles payment retries if a credit card transaction fails, enabling you to recover a greater percentage of revenue.
Critical to the financial health of the business is your ability to have a real-time view into everything that makes your business tick. Doing this requires turning the raw data you collect into intelligent insights. An agile billing system gives you visibility in a variety of formats such as reports, dashboards and analytics. For example you should have the ability to quickly locate anomalies such as spikes and dips in invoice counts month-over-month and year-over-year, late invoice closings, late invoice approvals, unbilled usage, subscription variances, over or under subscription changes, or expiring subscriptions. You should also have the ability to predict expected monthly revenue, know average days sales outstanding (DSO) per account, proactively handle churn, and view aging and billing trends… just to name a few.
To recap, an agile billing model delivers:
- Exceptional customer experiences
- Faster monetization of today’s products and services, as well as the ability to seize tomorrow’s new opportunities
- Seamless integration between front- and back-office systems
- Revenue leakage reduction
- Real-time intelligent insights
Do you need an Agile Billing System?
Is it time for you to upgrade to an agile billing system? To help you make the decision we’ve highlighted 7 key questions that’ll enable you to make the right decision.
- Do changes to your pricing models require system customization?
- Does it take weeks if not months to bring a new offering to market?
- Do you lack the ability to quickly and easily develop packages, bundles, and promotional offers?
- Are invoices a source of friction between the company and your customers?
- Is revenue leakage an ongoing occurrence?
- Does your finance team rely on spreadsheets?
- Does it take a week or longer to close the books?
Did you answer yes to one or more of these questions? If so, it’s time to consider swapping your traditional billing system for an agile billing platform.
Make Agile Billing the Cornerstone of your Business
Success in today’s dynamic market requires agility. And an agile billing model enables you to rapidly make the changes needed to deliver on customer expectations and stay ahead of the competition.
Built from the ground up to deliver the agility businesses need to quickly respond to customer and market changes, BillingPlatform empowers companies to monetize any revenue opportunity for a frictionless customer experience. Our agile billing system enables you to meet today’s needs while future-proofing your business. Does that sound like something your company could benefit from? If so, our team is ready to help.