At the start of each billing cycle, is your finance team scrambling to determine which customers to send invoices to and for how much? Which customers have credit balances or outstanding balances? Have customers upgraded or downgraded their subscription tier? Are there customers purchased additional features and functionality, or took advantage of a promotion? The list of billing “what if’s” can seem endless! What if the situation was different and you started each billing cycle with all the information needed? Not only that, but what if you could generate invoices, track and collect payments, and handle revenue recognition with little to no human intervention? An automated billing solution enables you to automate all of the above… and much more.
Put Billing Errors Where They Belong: The Past
When handling billing processes manually, errors are bound to happen. After all, people are human and make mistakes. Even your most meticulous and competent financial employees will make mistakes. Without automated billing, the manual handling of these processes is time-consuming, tedious, and consists of repetitive tasks.
Making errors is inevitable, and when errors occur they can affect everything from customer satisfaction to revenue leakage. Let’s be honest, no one likes receiving an invoice that contains errors. Regardless of the type of error – an inaccurate amount due, other miscalculations or incorrect payment terms, it’s disappointing. This not only delays the payment process, it results in staff spending time fixing the error and resending the invoice. It can also lead to customer churn – negatively impacting your bottom line.
Simple Errors Could Cost You Down the Road
Miscalculations within the invoice aren’t the only areas where human errors can affect cash flow and the customer experience. Let’s assume that when updating a customer’s profile, a typo occurs in the payment terms. So instead of the contractual payment term of NET 30, it now reads NET 90. Not only will this seemingly innocent error delay when you receive payment, but chances are your collections processes will begin. That’s a process that requires resources that could be better utilized elsewhere. Additionally, the customer may lose confidence in your organization and take their business elsewhere.
Let’s look at another type of error that will result in monetary loss. Say that during a billing cycle 20 customers took advantage of your freemium offer. We’ll also assume that 10 of those customers upgraded their service by adding functionality at $10/ feature. Of them, five customers added two features (5 x $20 = $100), and five upgraded to three features (5 x $30 = $150). If the upgrade from freemium to paid services is overlooked during the billing cycle, revenue leakage occurs. While the loss of $250 during a single billing cycle may not sound like a lot, in 12 months that equates to losing $3,000. If the error remains unchecked for an extended period, the compounded loss could significantly affect your profitability.
Automated billing software reduces and, in some cases, eliminates human errors. This ensures the invoices you send are flawless and customers receive the experiences they expect. Let’s look at what an automated billing system is and the benefits it provides.
Say Goodbye to Manual Processes with Automated Billing
Designed to automate the creation, generation, and sending of invoices, as well as handle approvals and provisioning, track the payment process, and collect payments; automated billing software reduces the amount of human effort needed at every billing touchpoint. While no two automated billing solutions are alike, here are some of the key features and functionality automated billing provides.
Calculates amount due
Gathers all relevant information such as customer data, order/consumption data, costs of services rendered, and prices from a variety of sources. These could be your customer relationship management (CRM), enterprise resource planning (ERP), etc.
Leverages customizable invoice templates to populate the invoice and identifies invoices that require manual intervention. Automated billing then initiates departmental approval processes, and sends the invoice to the customer via predetermined delivery methods such as email, customer portal, etc.
Allows for real-time payments via a payment portal, payment gateways, or other method. This allows for a variety of payment options like credit/debit cards, autopay, ACH, bank transfers, wire transfers, etc. Additionally, the system handles multiple currencies, refunds, partial and split payments, and more.
Automated billing notifies customers of delinquent payment, upcoming card expirations, and service terminations resulting from late payments. All without you having to intervene! It also automatically retries payments when the payment fails.
Provides a customer self-service portal
Gives customers real-time access to their account information, allows them to manage their accounts, and make payments.
Delivers business intelligence
Provides a variety of tools such as reports, dashboards, and analytics to extract meaningful information. That information can help you better understand the financial health of your business, make informed business decisions, create forward-looking strategies, etc.
Promotes security and compliance
Adhering to compliance regulations and keeping customer data secure are non-negotiable. The automated billing solution enables you to align compliance to any standard, and tailor billing practices across all domestic and international business units by:
- Ensuring revenue recognition aligns with ASC 606 and IFRS 15.
- Maintaining internal controls over financial reporting and the privacy of customer data with SOC 1 and SOC 2 compliance.
- Securing customer payments and personal information with compliance to PCI and GDPR.
The benefits of an automated billing solution doesn’t end here. Additionally, it enables you to quickly and easily experiment with pricing plans and billing models, seamlessly integrate with upstream and downstream systems, control the entire customer journey, and much more.
Automated Billing Keeps Cash Flowing
BillingPlatform provides a complete enterprise-grade billing and revenue management solution that delivers support for the entire quote-to-cash (Q2C) process. From product setup, quoting, and billing, through revenue recognition, payments and collections, our single, secure platform enables you to reduce human intervention, make informed business decisions, decrease revenue leakage, and deliver frictionless customer experiences.
Unlike other cloud-billing software solutions, BillingPlatform’s agile and scalable platform provides a complete solution that fulfills 100% of your business requirements. From mediation, rating, invoicing, collections, reporting, analytics, revenue recognition, to A/R subledger. We standardize operations on a single platform to consolidate billing and automate bill cycle processing. This reduces costs, decreases resources needed, increases billing accuracy, and improves cash flow. In the words of Sarah Spoja, CFO at Tipalti, “As we expanded, we needed a billing solution that could not only handle our growing volumes and complexity but also integrate to critical third-party solutions to round out the entire billing and revenue management process. After completing a full evaluation of the market, BillingPlatform emerged as the best solution for our needs.”
Do you think you’re ready for an automated billing solution? Request a demo to see us in action.