Traditionally, billing functioned in the back office, and automating its tasks was a low priority. While this is still true for some companies, a growing number of businesses are making billing automation a priority. In fact, if you want to grow your business (and what company doesn’t) an agile billing model and billing process automation are a necessity.
Research, conducted by MGI Research, concluded that when companies reposition billing to function as a strategic enabler and accelerator of monetization innovation and frictionless customer experiences, they are able to overcome many obstacles. These include customer disputes, internal inefficiencies, inaccurate reporting and forecasting, and revenue leakage. Before discussing the benefits of an agile billing model, let’s take a closer look at agile billing.
What is an Agile Billing Model?
Agile billing can be defined on multiple levels: business agility, product agility, and IT agility. Designed to support sophisticated billing models, an agile billing platform is a cloud-native and flexible billing solution that provides organizations with the flexibility to keep pace with today’s ever-changing customer and market demands. It seamlessly integrates with front- and back-office systems, satisfies customer and business needs in real time, and provides speed, agility, and friction-free customer billing experiences.
Agile billing platforms are designed to take businesses to the next level by enabling complex billing and payments into a robust agile billing model. It allows businesses to seamlessly offer sophisticated and innovative pricing plans. These can include:
- Recurring billing (by skill set, by service, by asset)
- Subscription billing (flat-rate pricing, tiered-pricing, per user/per-unit pricing, freemium)
- Usage-based billing (pay-as-you-go, tiered pricing, volume pricing)
- Hybrid billing (subscription + one-time fees, subscription + pay-as-you-go, subscription + overage, multi-part pricing)
- Dynamic billing (formula-based pricing, time-based pricing, demand-based pricing, and event-based pricing)
Agile Billing: Why Now?
We’re now in the age of anything-as-a-service and with that transition, customers have become increasingly demanding. An agile billing model breaks down the barriers between you and your customers, giving them the transactional control they are seeking. It provides customers with the flexibility and transparency needed for them to better understand and control their spending.
From an organizational perspective, companies can improve cross-sell and up-sell initiatives. Additionally, it allows businesses to meet customer needs by offering flexible payment solutions, exceeding customer expectations, gaining a competitive advantage, and maximizing profitability.
Devices & Data Will Only Increase
Business opportunities don’t end there. While connected devices have been around for decades, the number of Internet of Things (IoT) devices is set to explode. It’s estimated that in 2023 IoT devices will increase to 14.4 billion (18% increase) and by 2025 there will be 27 billion IoT devices. With the ever- increasing number of IoT devices and their innovative uses, organizations will gain revenue-generating opportunities to monetize the data that is exchanged between devices. However, the ability to monetize IoT data requires an agile billing platform that features a built-in mediation engine.
Extend Your Enterprise Ecosystem
An agile billing system allows companies to easily extend their enterprise ecosystem to include critical applications and systems (both front- and back-office) 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 the entire quote-to-cash (Q2C) process, decreasing errors and reducing revenue leakage.
Is Revenue Leakage Cutting Your Business Short?
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. An agile billing platform 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 and handles payment retries if a credit card/debit card transaction fails, enabling you to recover a greater percentage of revenue.
Real-Time Data is Key
Critical to the financial health of the business is your ability to have a real-time view into the data that makes your business tick. Doing this requires turning the raw data you collect into intelligent insights. An agile billing platform enables you to quickly locate anomalies such as month-over-month and year-over-year spikes and dips in invoice counts, late invoice closings, late invoice approvals, unbilled usage, subscription variances, over or under subscription changes, expiring subscriptions, and more.
You should also have the ability to predict expected monthly and annual revenue, know average days sales outstanding (DSO) per account, proactively handle churn, and view aging and billing trends… just to name a few.
Agile Billing Model Benefits to Propel Your Business Forward
To recap, an agile billing model delivers countless benefits such as:
- Faster monetization of today’s products and services, as well as the ability to seize tomorrow’s new revenue-generating opportunities
- Increasing revenue from cross-sell and up-sell initiatives
- Monetizing IoT device data
- Seamless integration of front- and back-office systems
- Streamlining the entire Q2C process
- Reducing revenue leakage
- Lowering operational costs
- Gaining real-time intelligent insights
- Reducing churn
- Eliminating or reducing errors
- Gaining competitive advantage
- Delivering exceptional customer experiences
How to Know if You Need an Agile Billing System
Is it time for you to swap your manual billing processes or traditional billing software for an agile billing model and platform? To help you make the decision, we’ve highlighted 8 key questions.
- Do changes to your pricing models require system customization?
- Does it take weeks if not months to bring new offerings to market?
- Do you lack the ability to develop packages, bundles, and promotional offers quickly and easily?
- Are invoices a source of friction between the company and your customers?
- Is revenue leakage draining your profits?
- Does your finance team rely on spreadsheets or other manual processes?
- Does it take a week or longer to close the books?
- Are your billing processes slowing down other operations within the business? If so… Are these delays causing customer and employee frustration?
If you answered yes to even one of these questions, it’s time to embrace an agile billing model.
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 and deliver a frictionless customer experience. Our agile billing system provides the flexibility needed to meet today’s needs, as well as whatever tomorrow may bring.
But don’t just take our word for it. We were awarded the highest overall rating out of 35 vendors rated by MGI Research. In its June 2023 Agile Billing Buyer’s Guide we earned a positive analyst outlook based on criteria in five key categories including: strategy, management, product, finance, and channels. BillingPlatform is the only revenue lifecycle management platform that enables enterprises to monetize all types of product offerings – from subscriptions to usage-based pricing models and everything in between. BillingPlatform manages product setup, quoting, billing and invoicing, revenue recognition and payments, and collections, making it the most flexible solution on the market, putting enterprises in control of how they differentiate, maximize profitability, reduce operational costs, and improve the customer experience.
Want to see what sets us apart with your own eyes and bring your agile billing model plans to life? Start your free guided tour today.