Is software and automation synonymous? The short answer to this question is no. Think Microsoft Excel. While Excel is certainly more efficient and accurate than paper ledgers, it’s a stretch to say it delivers automation. Let’s take this question one step further – is billing software the same as billing automation? Billing software refers to programs that are designed to track billable products and services, as well as handle the preparation of invoices and other accounting documents. While these types of programs can automate some manual tasks, they do not provide the full functionality that many enterprises – especially software-as-a-service (SaaS) and subscription-based organizations need. This is why automated billing software is critical to taking your business to the next level.
Why Automation is Essential for Billing
Your business is growing faster than expected. The products and services delivered are beyond reproach. Customer churn is at an all-time low. With so many positives, what could explain why your company is missing profitability goals?
This is a two-sided coin. On one side the business has grown, however on the flip side manual processes simply don’t scale – resulting in lost opportunities. This is especially true if your organization handles complex billing models. And further down the road, as the business continues to expand, you’ll find supporting a variety of pricing models and consistently delivering positive customer experiences increasingly difficult. Not to mention, the likelihood of errors resulting from repetitive and manual tasks increased. This not only takes time and can cost money, but can negatively affect your company’s credibility. The answer to these and other challenges associated with manually handling billing is found by implementing an automated billing software solution.
Automated Billing Software: The Benefits
Regardless of your industry, business model, or pricing schemes, automated billing software delivers the benefits that will help set your organization apart from the competition and deliver long-term success. With a billing automation platform, you can:
Even if you employ the most thorough accountants, errors do and will happen. When mistakes happen, they cost you time and money, as well as decrease customer satisfaction – which ultimately leads to churn. By automating billing you’re able to not only reduce, and in some cases eliminate, human errors. You’ll also increase the efficiency of the entire billing process – saving you time and money. Additionally, billing automation enables you to deliver the type of experiences customers expect and helps to keep your cash flow consistent.
Encourage timely payments
When invoices aren’t sent on a timely basis or contain errors, payments are delayed, which affects your cash flow. Automated billing systems ensure the timely delivery of error-free invoices, helping you to receive payments in accordance with the terms.
In a perfect world, payments would be received on time, but as you know that’s not always the case. Automated billing software combines billing, dunning, collections, and payment processing in a single solution. This enables you to reduce days sales outstanding (DSO), improve cash flow, and build positive customer relationships – even during the collection process.
Accelerate revenue recognition
Complexities associated with revenue recognition takes vast amounts of time to accurately track earned and deferred revenue. By automating revenue recognition you’re able to streamline revenue management to allocate, reconcile, monitor, and recognize revenue for any pricing model, billing approach, or promotional offer – speeding the close process.
When it comes to complying with Generally Accepted Accounting Principles (GAAP), you need to strictly adhere to its guidelines. Knowing when to recognize revenue can be challenging for businesses across all industries. Automated billing software enables you to adhere to today’s strict compliance standards such as ASC 606 and IFRS 15.
Do your systems still operate in siloed environments? If so, for staff to get the information needed they must access multiple applications. Typically this results in inconsistent and contradictory data. Using robust application programming interfaces (APIs) or pre-built connectors, automated billing solutions provide the ability to connect with critical front- and back-office systems. When you’re able to seamlessly integrate systems such as financial, customer relationship management (CRM), business process management (BPM), robotic process automation (RPA), enterprise resource planning (ERP), general ledger, tax solutions, as well as any other system needed to automate end-to-end billing and revenue management, you’re able to dramatically reduce errors and revenue leakage.
You need to keep customer data protected and handling billing manually doesn’t provide the tools needed to meet data security standards. Automated billing software provides the enterprise-grade security that enables you to keep customer data secure and meet compliance standards whether on a domestic or global level. For instance, you can align compliance to any standard by maintaining internal controls over financial reporting and the privacy of customer data with SOC 1 & 2 compliance. Securing customer payment and personal information requires compliance to PCI and GDPR. Further, customer data security is handled by encrypting highly sensitive and user-defined data by adhering to FIPS 140-2 encryption Level 2 and Level 3 standards. When it comes to processing credit card payments, the automated billing system should follow the PCI security standards for credit card payments and offer the DKIM protocol for sending emails from the billing solution.
Gain insights into operational metrics
You need to know how well your business is functioning. Automated billing software provides the metrics needed to keep your finger on the pulse of the health of your business, enabling you to make informed and strategic decisions. To maximize your potential, billing automation provides the information necessary to track total customer value (TCV), monthly recurring revenue (MRR), annual recurring revenue (ARR), cash flow, customer churn, customer lifetime value (CLV), customer acquisition cost (CAC), sales, earned revenues, and more.
Finally, we would be remiss if we didn’t discuss how automated billing software enables you to deliver exceptional customer experiences. Automation enables you to deliver timely and accurate invoices and provides the information needed to analyze potential situations. Before they become customer or revenue-threatening. This gives you the opportunity to take proactive action!
Is Your Business Ready for Automated Billing Software?
The risks of continuing to use inefficient manual billing processes are significant. Handling billing manually slows you down, restricts growth, and can result in customer dissatisfaction and churn. Simply put – automation streamlines processes, eliminates errors, provides operational insights, and enhances customer relationships.
How can you be sure that an automated billing system is right for your organization? We’ve already mentioned the benefits you’ll receive by automating billing, however, if you’re still not sure take a look at some questions to see if it’s time for you to automate billing.
Essentially, an automated billing system removes bottlenecks, enabling you to keep cash flowing and customers loyal. The best automated billing software solutions are flexible, scalable, efficient, and comprehensive. They provide a one-stop shop for automating the entire quote-to-cash process. Unique in the industry, BillingPlatform delivers a cloud-based, automated billing platform that provides organizations with the ability to monetize any revenue opportunity and deliver frictionless customer experiences. Take a test drive for 14 days to see the difference for yourself.