With no signs of slowing down, SaaS adoption is exploding. A recent MarketsandMarkets forecast predicts that the market size for global subscription and billing management is expected to grow from USD 4.0 billion in 2020 to USD 7.8 billion by 2025. What are the reasons for this remarkable growth? While there are many, the primary reasons include an increase in subscription business models, the desire to improve customer retention and reduce churn, compliance adherence, and legacy system upgrades. Considered the most important component of running a successful SaaS business, subscription management software enables you to bill customers at predetermined fees, offer a variety of payment options, and collect payments on a recurring basis. Essentially, SaaS subscription management software encompasses all of the interactions throughout the entire customer subscription lifecycle – from the moment a prospect becomes a subscriber until the subscription is canceled.
What to Consider in a SaaS Subscription Management Software Solution
It goes without saying that the advantages of a SaaS business model are plentiful. However, with the advantages, there are also hurdles to overcome. Think about it – the manual tracking of invoices, payments, and free trials is time-consuming and prone to errors. Taking the drudgery out of customer subscription lifecycle processes requires automation. That is why smart SaaS businesses are swapping their manual processes and legacy systems in favor of SaaS subscription management software. But, with so many solutions available, how do you know which one is right for your business?
At the most basic level, you need a SaaS subscription management software solution that compliments your business rather than detracts from it. We’ve taken the guesswork out of the selection process by providing the 8 must-have features your SaaS subscription management software should provide.
1) Flexible billing
As a SaaS business, you need the ability to offer customers flexible billing options. The best SaaS subscription management software solutions allows you to offer different subscription options, pricing models, promotions and discounts, freemiums, and trial periods. Be sure the software solution you select allows you to easily manage pricing tiers and quickly create promotional offers, discounts, coupons, plan upgrades and downgrades, packages, bundles, etc.
2) Tax compliance
Whether operating on a national or international level, the SaaS subscription management software should provide automatic tax handling. With an out-of-the-box tax solution you can send any field to the tax engine for efficient calculation of any tax type. In addition, seamless integration with external tax engines ensures efficient assessment of sales tax/VAT/GST or any other tax type so that you’re always in compliance with global, regional, and local tax requirements.
3) Invoice processing
Getting paid relies on your ability to send timely and error-free invoices. The SaaS subscription management software should provide the ability to automatically invoice customers, without the need for another platform. In addition, verify that the software supports complex account hierarchies so that invoicing can be easily and dynamically consolidated or separated. Finally, the invoice templates should be configurable so that you can design and deliver unique invoices by business unit, reseller/distributor or geography.
4) Payment gateways
To gain cost efficiencies and provide customers with payment options, the SaaS subscription management software should provide multiple online payment gateway choices – enabling you to accept payments through different channels, including credit cards. In addition, be sure the billing system you select is payment card industry (PCI) compliant which will give your customers peace of mind in knowing that their credit card payments are being processed securely.
5) Integration support
Reducing manual efforts and gaining cost efficiencies are critical to the financial health of your SaaS business. From the initial quote through to payment collection, your SaaS subscription management software plays a vital role. To create an efficient ecosystem and provide transparency across the organization, the SaaS subscription management software needs to seamlessly integrate with the other systems you use, including customer relationship management (CRM), enterprise resource planning (ERP), configure, price and quote (CPQ), and finance and tax solutions.
6) Revenue recognition
To stay compliant with revenue recognition standards like ASC 606 and IFRS 15 you need an all-in-one revenue recognition software solution that supports the entire quote-to-cash process. Advanced recognition that some of the more sophisticated SaaS subscription management software solutions provides enables you to create custom revenue milestones and schedules that cater to your customer base such as milestone recognition, point-in-time, recognition-over-time, and more.
7) Business intelligence
All SaaS subscription management software comes with default reporting functionality, but what if you need more? To make more informed business decisions, you need a subscription management solution that uses granular billing data to provide complete business intelligence. Look for a solution that provides not only standard reports, but custom reporting, dashboards and analytics.
8) User interface
Many times, the user interface (UI) is left out of the equation when researching SaaS subscription management software – but it shouldn’t be. If you choose a system that contains a complex, difficult-to-learn and navigate UI, adoption will be poor. Worse yet, you may find yourself at risk for customer churn. Today’s customers want empowerment, and what better way to provide that than through an easy-to-use customer portal that gives them real-time access to their account information, allows them to manage their accounts, and make payments. Go one step further by customizing the portal to give your customers a personalized experience that builds brand loyalty.
Reach Your Full Revenue Potential With a SaaS Subscription Management Software Solution
Your SaaS business has numerous moving parts, putting you at risk for revenue leakage and customer churn. The right solution can automate and streamline time-consuming and costly processes, ensuring you’re able to turn complexities into opportunities and reach your full revenue potential.
BillingPlatform is the most agile, complete, and customizable SaaS subscription management software solution in the market. Honored to be listed as a vendor in the Gartner Market Guide for Subscription and Recurring Billing Management, our cloud-based platform adapts to every unique business model and pricing structure, enabling you to monetize products and services to drive growth and competitive differentiation. Ready to learn more? Request your free demo to dive even deeper.