5 Critical Capabilities Every Software Company Should Demand from their Billing Solution
In the ultra-competitive software industry any advantage is welcome. However, billing can be a critical success factor for every business. This post identifies the 5 critical billing capabilities we’ve identified as essential to our software customers.
Billing can support or hinder your business. No one wants to labor for years to develop the perfect product, only to find their billing solution can’t support the pricing, packaging, and bundling that customers want. If you want to support innovation in software, billing flexibility is key.
With so many billing solutions in the market to choose from, I recommend that software companies pay particular attention to the following five capabilities.
- 1. Agility
2. Native Workflow Automation
3. Flexible Rating
4. Native Mediation
Agility Speed Time-To-Market with Configurability Capabilities
In software, rapid innovation is essential. You must deploy new product packages quickly and accurately, which is only possible with agile billing capabilities that support no code, point-and-click capabilities. Therefore I recommend beginning your search with highly configurable, agile platforms in mind. This will allow you to bring products and services to market faster than your competitors.
Many billing systems are too rigid to support product initiatives easily. Often, custom IT intervention or software development is required in order to make rigid solutions fit customer needs. Additionally, the cost of custom IT development can make product launches difficult to justify. Software businesses can’t afford to waste time and money updating their billing function.
With a cloud-based billing platform, designed with agility in mind, organizations can leverage custom data models built on metadata to configure new products and business models without IT intervention. This allows you to launch new product offerings or payment models in hours or days rather than months. Going to market quickly and efficiently is increasingly important as many companies are exploring new ways to attract customers.
Native Workflow Automation Reduce Errors and Maximize Efficiency with Process Management Capabilities
Enterprises that can successfully automate billing processes are able to collect revenue more quickly and accurately than businesses that perform the same tasks manually. Spreadsheet, or manual, billing introduces human error into financial operations. When implemented effectively, automation saves time and facilitates a higher level of precision in software businesses.
Workflow automation capabilities differ drastically across billing systems. Most offer basic functionality, such as final approval for invoice delivery. Others billing solutions offer complete control over workflow customization. Software companies with sophisticated pricing models need to customize unique workflows that suit their business models.
For example, a certain level of sophistication is required for a billing system to execute multiple actions within a workflow that would apply different discount levels depending on when clients paid their
Software organizations with business processes around products, accounts, pricing models, and billing terms should consider cloud-based platforms that can support highly granular native workflow functionality that is configurable and manageable by business users. The more enterprises are able to successfully automate their processes, the higher their efficiency and accuracy will be when it comes to billing operations.
Flexible Rating Lead the Market with Innovative Pricing and Packaging Capabilities
Software customers expect personalized pricing and rating options that cater to their unique needs. You can provide this with billing solutions that give total control over pricing and equip you with the tools you need to design product packages that respond to your clients’ expectations.
There is wide variation across billing systems in terms of what pricing models they can actually support out of the box. In addition, some billing systems allow business users to configure their own dynamic pricing models without IT intervention. Some systems can only deploy simple, subscription/recurring models, while others can handle highly complex rating schemes, based on multiple variables and market conditions.
For example, your software business may gain a competitive advantage and increase revenue by offering subscriptions with dynamic rating, such as metering usage to determine their level of consumption and applying discounts accordingly.
The key for software companies is identifying billing management platforms that don’t require custom code or programming expertise to implement specific pricing models. Again, flexibility and adaptability are incredibly important for software companies, and you can’t afford to waste time when it comes to delivering creative pricing to customers.
Native Mediation Translate Product Usage into Billable Consumption with Native Mediation
Because billing systems for software products depend on data generated by other enterprise applications, it’s essential that they can interpret structured data, calculate amounts owed, and invoice in a timely manner. However, billing solutions differ in their abilities to configure usage collection and mediation.
Data mediation, the process of converting data from one format to another, is not something that all systems can execute effectively. A complete billing solution offers native mediation capabilities that can aggregate and analyze usage data from any source to transform it into revenue potential immediately. These sophisticated billing solutions come with modern integration frameworks as well as robust APIs and data manipulation language capabilities.
Less robust systems require manual preparation before usage data can be calculated within the billing application. Some may require third-party applications to mediate usage data. Sophisticated billing solutions, on the other hand, can be configured natively to ingest any kind of usage data and convert it to the right structure for billing operations.
Extensibility Streamline Operations with Native APIs and Connectors
For any business, billing is no longer a strictly back-office process that sits in isolation. This is particularly true for software businesses. The business units within software companies must coordinate with other units, such as marketing, financial reporting, and sales, to support the level of fluidity and interconnectedness necessary to monitor the financial health of fast-moving businesses.
Cloud-based billing platforms, however, are highly extensible and can easily connect to new usage feeds, external applications, or be extended by the end user to accommodate additional business functions that are relevant to billing operation. Through the use of APIs billing platforms ensure that the entire financial ecosystem is in sync at all times. Application extensions enable billing to automate critical processes and connect with tax, ERPs (like NetSuite and SAP), and CRMs (such as Salesforce or Microsoft). As a result, organizations who leverage these cloud-based platforms have the ability to deliver one truly complete, end-to-end billing experience.
In addition, software companies that don’t have access to all of their financial data from a single solution can’t analyze their billing performance accurately. This lack of visibility can leave valuable customer insights and revenue opportunities buried in data. With cloud-based billing, you can build custom dashboards and reports for any data element that you define based on your unique pricing scenarios. This allows you to study customer trends and refine your pricing over time to maximize profitability.
Evolve Your Business with BillingPlatform
Optimizing a software business model for the digital economy is easy with BillingPlatform. Our solution helps finance teams configure and deploy any disruptive- or standard-pricing strategy, no matter the complexity. With BillingPlatform, you can mediate any data from product usage and define custom events that fit your unique needs. Automate high-volume usage and rating for metered offerings and manage your business model in one comprehensive, cloud-based solution.
BillingPlatform can scale with your user base as it grows. Without any custom coding or IT intervention, your finance team can monetize complicated offerings, as SmartBike did, giving consumers choices, while still providing tailored experiences.
We help every company embrace disruptive technology and economic trends. Discover how BillingPlatform evolves the role of Chief Financial Officers by downloading our ebook, Cloud-based Billing Management Disrupts to Role of CFO.