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consumption based pricing model software

Billing & Monetization

Consumption-Based Pricing Model Software: 14 Benefits You Don’t Want to Miss

Consumption-based pricing (also referred to as usage-based pricing) charges based on what you use or consume. This usage-based pricing model charges customers only for the resources consumed. For instance, let’s assume a...

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revenue vs profit

Accounts Receivable

Revenue vs Profit: Understanding Key Differences for Financial Success

Considered the most important metrics for businesses and investors alike, revenue and profit measure a business’s income. This, however, is where the similarities end. Let's uncover what each one is, their differences, how...
revenue leakage

Accounts Receivable

Understanding Revenue Leakage: Causes, Prevention and Solutions

Like a dripping faucet, revenue leakage – which may initially start as a slow financial drip – over time will drain your organization’s profitability. Unlike customer churn, revenue leakage is when a...
arpu

Accounts Receivable

Average Revenue Per User (ARPU): Definition and How to Calculate

A key performance indicator (KPI), average revenue per user (ARPU) measures the revenue generated per user/customer over a specific period of time. This metric has many uses, from helping organizations assess how...
accrued revenue

Accounts Receivable

Accrued Revenue: Definition, Examples, and How to Record It

Accrued revenue is a cornerstone of accrual accounting, playing a vital role in accurately reflecting a company's financial performance. For businesses operating in dynamic industries, understanding the concept is essential for aligning...
net dollar retention

Accounts Receivable

What is Net Dollar Retention?

Used extensively by subscription-based and software as a service (SaaS) companies, net dollar retention (NDR) is a metric that measures revenue growth or decline in customers over a specific period. This critical...
what is a free trial

Accounts Receivable

What is a Free Trial, and Is Offering Free Trials Right for Your SaaS Business?

In the Software-as-a-Service (SaaS) industry, a free trial is a popular acquisition model that allows potential customers to experience the product before committing to a paid subscription. The idea behind this model...
what is cost plus pricing

Accounts Receivable

A Guide to Cost-Plus Pricing: Definition, Benefits and Strategy

One of the most straightforward pricing strategies for the sale of goods and services, cost-plus pricing is a pricing model where a fixed percentage is added to the cost of producing or...
churn rate

Accounts Receivable

Churn Rates By Industry: Is Your Churn Rate Too High?

Customer churn—the rate at which customers stop doing business with a company—is a critical metric for companies across all industries. High churn rates can directly impact revenue growth, profitability and long-term sustainability....
payment reconciliation

Accounts Receivable

What is Payment Reconciliation & How Does it Work?

Managing payments and transaction records for your business seems easy enough, right? After all, if you’re not doing it the business probably won’t survive. But as businesses grow and cash flow increases,...
AR aging

Accounts Receivable

Your Guide to Accounts Receivable Aging Reports & How to Calculate AR Aging

Does your organization extend credit to customers? Do members of your accounts receivable team find themselves overwhelmed with the task of determining which customers have uncollected debt? An accounts receivable (AR) aging...
consolidated billing

Accounts Receivable

What Is Consolidated Billing? Best Practices & Benefits Uncovered

Popular among software-as-a-service (SaaS) organizations, billing consolidation is a methodology that merges multiple transactions or subscriptions into a single invoice. This approach simplifies the process by consolidating multiple financial transactions. It’s also...
dunning

Accounts Receivable

What is Dunning, and Can it Improve Customer Retention?

An overlooked process by many software as a service (SaaS) and subscription-based companies, dunning is a 17th-century term that describes the process that organizations take to methodically communicate with customers to collect...