How Much Should You Spend on Your Billing Solution?

October 28, 2019
Posted on: October 28th, 2019 by Leonid Solomonik
Multiple Charging Models

Cost is a concern for any business, no matter the industry, especially when your company is looking at purchasing enterprise-level software. Advancements in technology and connectivity along with the prevalence of smartphones and tablets, cloud delivery and data backup, raise questions of costs and savings when considering any technology purchase.

It’s no surprise then, that in my business engagements I often hear this question: “How much should I be spending on my billing solution?”


I’ve heard this question in one form or another from small startups, established retailers and large enterprises. Each of them wants to know how they should be allocating funds for their technology stack. And when talking with me, they really want to understand the budget impact they should expect for their quote-to-cash process.

My response never changes, “most enterprises will spend 3% of their annual revenue on billing solutions.”

When BillingPlatform first offered our cloud-based platform into the market seven years ago, we began an engagement with a large, multinational software enterprise that made over $500 Million in revenue annually. Through our discovery process, they realized they had been spending 3% of their annual revenue, and often more, on their billing solution.

Multiple Charging Models

Three percent was surprising to the enterprise (and our eventual customer). It meant they were spending $15 Million annually. Surprising in that, for their entire IT stack most enterprises spend somewhere between 2% and 10% of revenue (retailers on the low side with finance companies on the higher end). Discovering that the majority of our customer’s spend went into billing came as a shock.

BillingPlatform continually demonstrates that an agile, cloud-based platform can significantly reduce costs.

A Better Question: How Much Can You Save?

I understand the importance of the cost question. Your billing system manages sensitive customer interactions, invoicing and payments for your products and services. No one can afford to make a mistake in this critical business operation.

However, relying on outdated, rigid systems can lead to large expenses. Your business will be better served by asking “How much can I save?” with a more innovative solution.

Diving a bit deeper into the 3% of revenue example above, that enterprise had been working with a rigid, legacy billing system that was deployed on premises. This meant a significant portion of their cost went into maintaining the installation in their tech stack. The hidden costs of on-premises software shouldn’t be a surprise to anyone.

By switching to the BillingPlatform cloud-based solution, our customer saved a significant portion of their annual revenue. Reducing on-premises maintenance costs led directly to a savings of 1% of their annual revenue. BillingPlatform delivers additional savings through automations and efficiencies. The processes that surround billing for this customer, including integrations with third-party or in-house applications, eliminated manual billing processes. The savings from these efficiencies are hard to quantify. But simply adopting a cloud model saved our customer millions.

Save More with a Better Approach

BillingPlatform has worked with enterprises in multiple industries, implementing a billing solution that flexes to meet their business needs and reduces costs. Saving on legacy maintenance costs is just one example. We’ve helped other companies reduce their dependence on IT, speed their time to market and improved their customer relations.

Estimate Your Savings with Our Calculator

Of course, every enterprise’s billing scenario is different. Each business has varying needs and multiple complexities to be considered. However, our experience has allowed us to create an ROI Calculator that estimates possible savings for any company.

Author: Leonid Solomonik
Leonid Solomonik
With over 20 years in the software industry and extensive experience in high capacity billing information systems, Leonid Solominik is the driving force that makes BillingPlatform the most dynamic and flexible solution on the market today. Leo is one of the original founders of BillingPlatform and is committed to excellence in product development and complete customer satisfaction on a system that has a 99.999% up-time guarantee. He is an enthusiast for out-door sports,and is a world traveler with a passion for global unity and diverse cultures. He also is fluent in Russian and has a passion for everything mechanical.
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