Subscription-based, usage-based, tiered, freemium, flat-rate, fixed-price, bundled, feature-based, release-based, hybrid, and more. One thing you can be sure of, there are plenty of pricing models to choose from. So, how do you know which one will maximize your revenue flow and which invoice billing software is right for your needs?
Regardless of the billing model you are currently using, the one thing that everyone agrees on is that getting paid is good. And, the only thing better than getting paid, is getting paid faster! In many situations this isn’t always possible, especially when you’re dealing with large B2B customers.
Invoice Billing Software & Delayed Payments
Your goal is to generate revenue. In fact, your business relies on a steady stream of revenue. But what happens when payment is delayed due to situations beyond your control? Let’s take a look at a few scenarios that happen all too frequently.
Say your company manufactures and sells luxury sofas to four-star resorts, and this quarter you closed your biggest order to date! After celebrating your success, everyone gets busy to ensure the timely delivery of the sofas to six new resorts that are in various stages of construction. With a lot of hard work and overtime, the sofas are ready for shipment, however, one of the resorts encountered construction delays and postponed delivery until the following quarter.
In another example, let’s assume that your company sold hundreds of thousands of dollars in products and associated services. Delivery and execution went off without a hitch, and the customer was invoiced. Unfortunately, the customer decided to dispute a few hundred dollars of the charges.
In both of these scenarios, the end result is a delay in payment. When revenue is tied to a single invoice you may find yourself waiting for your hard-earned revenue for months, if not quarters. And for some businesses, this could be the difference between operating in the red instead of the black.
Is there a solution to this payment dilemma? Yes, and the answer is harnessing event-based billing within your invoice billing software.
What is Event-Based Billing?
Simply put, event-based billing is a more sophisticated form of usage-based billing. Based on chargeable events, you’re able to control the creation of invoices. For instance, let’s assume that you need to create invoices where customers are charged for product usage, but the billing cycle doesn’t always coincide with when usage occurs. Instead of waiting for the next billing cycle (monthly, quarterly, annually, etc.), with the right invoice billing software you can send invoices in response to specific events that you define based on usage, or other custom fields to immediately generate the invoice.
Essentially, event-based billing enables you to use the event data that you already capture to define the release of an invoice. With an event-based billing cycle, you’re able to define a set of attributes at the product level that detail a natural grouping of billing events, as well as a single event that signals the “close” of an invoice. In this model, usage flows in a continuous stream through the billing system to ERP and other sources, automatically generating invoices and delivering them when the “closing” event takes place.
Alternatively, you can define your billing components to accumulate charges and then “close” the invoices on a specific cycle, creating a common time interval for delivering bills for a subset of products and services.
What’s in it for the Customer?
Think about it… which industry continues to see a decline in subscribers? Since 2015 consumers have been rapidly cutting the cord, leaving cable and satellite providers trying to reinvent themselves so they remain profitable. The reason for this mass exodus isn’t that people can’t afford to pay for the services, it’s that they only want to pay for what they use. And in this case… what they want to watch.
When your invoice billing software gives customers the option of event-based billing, they have control over how much they spend and when. To illustrate, let’s take the example of server access and data uploads. Let’s assume your customers pay a set amount for uploads each month, regardless of whether data is uploaded or not. By giving your customers the option of event-based billing, they can choose when they want to upload data and only pay for the services used for that time period.
Invoice Billing Software Makes It Simple
With billing models and processes already in place, how can you incorporate a model that lets you take advantage of near real-time invoicing? Event-based billing is possible with the right invoice billing software, letting you get the best of both worlds. For example, you can continue with your scheduled billing cycles and have them coexist with the event billing cycle for certain products or services.
With this approach, rules are easily added and evaluated. Regardless of your current billing model, event-based billing takes priority over the default cycles – enabling you to capture revenue faster than ever before.
Minimize Payment Delays and Improve Cash Flow
When invoice billing software limits your options for automated invoice cycles, you’re forced to generate invoices based on predefined triggers. These can include project acceptance, delivery of a specific number of products, or a specific percentage of project completion. All of which can result in large monthly invoices that are prone to charging disputes and delayed payment. These disputes can directly impact your cash flow, creating serious repercussions for your business.
With BillingPlatform you can avoid payment delays and get paid faster with event-based billing. Our invoice billing software gives you the ability to configure your products to “close” and send separate invoices based on specific events or actions. Our billing and revenue recognition are in the same system, so when an event is triggered – either from BillingPlatform or a 3rd party solution – revenue from that sale can be automatically recognized, improving your cash flow. Contact our team today to learn more about our solution.