Described as software that enables companies to, at its most basic level, generate and send invoices, collect payments, and calculate taxes – billing software is now capable of so much more. Regardless of whether you run a small and-medium sized business (SMB), a large enterprise, or something in between – implementing the right billing solution enables you to drive operational efficiencies, reduce errors, and boost profitability. However, with the number of billing systems now available, how do you know which one is right for your company?
This blog details why billing software is essential, the benefits of a billing software, the types of billing solutions currently on the market, considerations on selecting billing software, and how to overcome industry-specific billing obstacles.
Why Billing Software is Essential
Even though some of the tasks are tedious, accurate and timely billing is critical to the profitability and ongoing success of your company. Are you a SMB or mid-sized company that believes billing software is only for large enterprises? Or perhaps you’re a larger organization that has been on the fence when it comes to implementing billing software.
If so, here are 10 consequences of going without:
- Decreased and inaccurate cash flow: This covers not only the inability to track missed or delayed payments but also the difficulties in calculating cash flow, resulting in figures that are inaccurate.
- Increased errors: Mistakes are inevitable, and these mistakes can range from simple math miscalculations to more complex errors that can have significant financial repercussions.
- Contributes to higher operational costs: You may think that by not investing in billing software, you’re saving the company money. In reality, the opposite is true. Manually handling billing processes actually costs more – think about overtime hours, onboarding additional resources, and the inability to assign employees to value-adding or growth-oriented projects.
- Time-consuming: There are many processes related to the billing cycle such as billing and invoicing, payments and collections, revenue recognition and reporting. When done manually they not only take a substantial amount of time – which takes away from other significant work – but contributes to higher operational costs and increased errors. At some point, manually handling billing processes will become impractical, especially as your business grows.
- Information isn’t readily available or accessible: When billing processes are handled manually, the majority of information is locally stored, making it unavailable to remote staff, hindering communication and productivity.
- Difficult to track changes: Without an up-to-date log of changes, determining modifications made and who made them, as well as locating errors is problematic and time consuming.
- Processes can be missed: Without automated workflows, you run the risk of processes being overlooked or falling through the cracks, which can result in errors and revenue leakage.
- Inability to accept digital payments: Handling billing manually limits your ability to accept digital payments such as debit/credit cards, PayPal, direct debit, etc., which can increase your accounts receivable lifecycle, as well as impact the customer’s ability to make payments.
- Provides limited reporting capabilities: Since reports will contain limited information, the company won’t have the granular data needed to make informed business decisions.
- Increases security risks: Security vulnerabilities are exponentially greater when billing is handled manually. Paper records, as well as sensitive information like credit/debit card numbers, account numbers, and social security numbers can easily be compromised. Data breaches not only affect the customer but can have serious consequences for the business.
Don’t Let Data Lead to Delays
Now that we’ve covered the classic problems companies encounter when billing is handled manually, let’s talk about data.
For most industries, a significant amount of data is needed to accurately bill for products purchased or services rendered. If your data is spread across multiple systems, trying to manually consolidate it results in billing process delays. Further to the point, inaccurate or incomplete data hinders your ability to make intelligent financial decisions based on acquired data.
How can you resolve these and other billing issues? Simply put, turning billing obstacles into billing advantages requires an overarching, integrated billing solution.
Billing Software: Advantages and Benefits
That adds up to a lot of disadvantages, so what are the benefits of deploying billing software?
Billing software enables you to automate many of the time-consuming and error-prone tasks such as collecting usage data, ensuring all data is recognized across the billing processes, transferring billing data to other systems, confirming billable items and pricing, linking contract information, pricing, and usage data together, managing contracts to ensure accurate invoicing, and combining or splitting invoices – saving you time and money.
Here are more benefits you can expect to receive by implementing billing software.
- Reduced manual work and errors
- Shorter payment cycles/improved cash flow
- Decreased revenue leakage
- Quicker time-to-market
- Faster account reconciliation
- Additional payment options for faster payments
- Lower operational costs
- Improved transparency
- Enhanced tracking and improved regulatory compliance
- Reduction in security risks and fraud
- Improved reporting
- Accessibility from anywhere, at any time
- A single source of customer truth
- Enhanced employee morale
- Improved customer experiences
When considering the type of billing software currently available, they’re first categorized by on-premise or cloud-based. However, determining which billing solution is right for your business requires a bit more thought and planning.
How to Select the Right Billing Software Solution
Selecting the right billing software for your company requires you to look at many factors. To put you on the right track, we’ve provided tips that will help you narrow the selection and choose the billing software that will best meet your current requirements and future needs.
1) Know your requirements
This may sound fundamental but without having a clear understanding of your needs you may purchase a system that is lacking the features and functionality needed or conversely deploy a system that provides more functionality than you’ll ever use. Since billing software needs vary depending on company size, number of customers, billing complexity, and volume of transactions, your requirements may be different from your competitors.
2) Compare features and functionality
Evaluate several billing software packages and compare the features and functionality offered to your requirements. Be sure the billing software allows for seamless integration to your other systems, as well as provides the scalability needed as your business grows. Additionally, consider other factors such as customer support, task automation, and ease of use.
3) Determine your budget
With an understanding of your requirements, will an on-premise billing software solution provide what you need or do your requirements require cloud-based software. On-premise billing software has a one-time initial payment which is usually quite high. Additionally, overtime you may pay for software upgrades, as well as incur costs to keep the system operational. On the other hand, cloud-based billing software provides subscription plans that can be paid monthly, quarterly, semi-annually, or annually, and upgrades/maintenance is typically handled by the software vendor.
4) Predefined templates and customization
While predefined invoice templates are a standard deliverable, the billing software should also enable you to configure the invoice to meet your specific needs and deliver a personal touch. Additionally, design elements need to provide the ability to create unique invoices by business unit, reseller/distributor, or geography.
5) Revenue recognition
The solution should have the ability to automate revenue management and manage the complete quote-to-cash and revenue recognition processes.
6) Security features
In today’s market, data security is non-negotiable. Be sure the billing software offers robust security measures and adheres to the strictest privacy and data policies – ASC 606, IFRS 15, SOC1/SOC2/PCI, GDPR, DKIM, and FIPS 140-2 encryption Level 2 and Level 3 standards.
7) Enables international growth
The software should support localized billing, multiple currencies, multiple languages, and regional taxation – sales tax/VAT/GST, etc.
8) Learn more before you buy
When it comes to billing software, there’s not a one-size fits all solution. This is especially true when it comes to industry-specific requirements.
Billing Software That Meets Industry-Specific Needs
Let’s look at four diverse industries, their specific billing issues, and how billing software enables them to overcome challenges.
Communications Service Providers
While not deliberately overlooked, many communications service providers (CSPs) continue to rely on legacy billing software that doesn’t provide the features and functionality needed for today’s 5G digital era. Challenges encountered due to billing software that is beyond its prime include inaccurate invoices that can result in revenue leakage and billing disputes, which many times leads to customer dissatisfaction/churn, lost revenue, and damage to the CSPs reputation, payment fraud which can also result in lost revenue and damage to their reputation, as well as legal liabilities, regulatory non-compliance which will result in penalties, fines, and again damage to the brand.
Overcoming these obstacles requires billing software that has been developed to meet the increasing and intensifying needs of today’s CSPs. An automated billing solution enables CSPs to:
- Reduce OPEX & CAPEX
- Increase revenue and drive operational efficiency with core functions like mediation, billing, and revenue recognition in a single solution
- Launch new services and promotions faster with a configuration-driven product catalog
- Deploy creative pricing schemes
- Streamline billing processes, improve accuracy and efficiency, and improve the customer experience
- Seamlessly integrates to other systems, reducing time and resources to complete tasks
The finance industry is rapidly evolving with technological innovation despite having to rely on legacy systems. Meanwhile, FinTech start-ups are disrupting the industry and bringing solutions that offer better customer service and greater convenience at a lower price. To combat these disruptors, financial institutions are exploring ways to serve customers more effectively through analytics and digital banking technologies.
When a secure, cloud-based billing solution is deployed, financial institutions gain the ability to flex to any business model and adapt to global, regional, and local compliance standards, as well as:
- Simplify revenue management with a rule-based revenue recognition engine
- Speed integration with the critical front- and back-office applications to connect directly with the billing system
- Execute predictive analytics on any data element to obtain insights that drive business success
Media and Entertainment
Historically, the media and entertainment industry has been dominated by recurring and one-time revenue models. While still relevant, the space is expanding to offer the types of innovative pricing packages that keep consumers engaged. Now, enterprises must be able to handle massive volumes of transactions and manage complex scenarios involving usage, bundles, and subscription pricing for a variety of streaming platforms, from movies and music to educational content, and more.
With billing software that supports endless configurations for media products and entertainment platforms, these companies can easily:
- Convert manual billing into automated workflows that scale with the customer base.
- Package, charge, invoice, and provision products to meet the unique needs and requirements of the industry.
- Enhance subscription models with native mediation to gather data from any source for innovative metered and usage-based pricing.
A key requirement for success, organizations in the travel, transportation, and logistics industry need to be able to streamline operations. For example, airports need to manage revenue collection for many activities, including flight movements, aircraft parking, ground power, retail, and more. Logistics companies must manage vast inventory and shipping databases, as well as leverage data, such as distance traveled and weight or speed of delivery to accurately account for services.
Transportation companies that utilize a complete billing solution to automatically rate, invoice, and collect payments gain the ability to:
- Easily transition from simple one-time and subscription-based pricing models to creative metered and usage-based plans
- Standardize operations on a single platform to consolidate billing and automate bill cycle processing, saving cost on resources needed
- Lower cost and speed time-to-market with no-code, point and click configurability to easily extend the solution to meet their exact needs
Grow Revenue with the Right Billing Software
Regardless of the size of your business or your industry, a primary objective of yours is probably to accelerate revenue growth. This requires a flexible billing solution that enables you to bring innovative products and services to market faster than the competition, cut operational expenses, and build profitable customer relationships. BillingPlatform provides everything you need and much more.
With BillingPlatform you get billing software that not only meets the needs of your business today and into the future, but your industry-specific requirements. With us you get a complete billing and revenue management solution that supports the entire quote-to-cash lifecycle – from product setup and quoting through billing/invoicing and revenue recognition through payment and collections. All built on a secure, next-generation cloud platform that seamlessly integrates to your other systems. Reach out to our team today to see if BillingPlatform is the solution you’ve been looking for.