The one thing all companies have in common is their desire to prosper and grow. While many organizations have automated various aspects of the business such as sales, customer service, inventory management, supply chain, delivery, etc., a critical component of every business (their financial processes) has often been overlooked. So if you’re trying to determine how to automate the billing process, this blog breaks it down.
Is it Time for Your Company to Automate Billing Processes?
Depending on the organization, it may be obvious if automating your financial processes needs to move to the top of your priority list. If you’re unsure, take a look at the following questions to determine if now’s the time to swap labor-intensive manual billing processes for automation.
- Is your finance team manually handling repetitive tasks?
- The time it takes to process an order can vary, but on average it takes 5 times longer without automation. Would you like to speed your order processing time?
- Does it take days or even weeks of research to identify outstanding payments, delaying follow-up on overdue accounts?
- When a customer requests an upgrade or downgrade do you need to cancel their subscription (or part of the subscription), replace the subscription, and make manual changes on the back end to ensure accurate revenue recognition?
- Is your financial team closing the books at the end of each month using spreadsheets?
- Does it take an excessive amount of time and an impossible number of reports to gauge the health of your business (total customer value (TCV), monthly recurring revenue (MRR), annual recurring revenue (ARR), cash flow, customer churn, customer lifetime value (CLV), product and/or services sales, revenue earned, etc.)?
- Do you struggle to obtain reports that detail how well your pricing strategies are performing?
If you answered yes to one or more of these questions, your business is ready for automated billing. Before moving on there is one last question… do you want to position your company for growth?
How to Automate The Billing Process
As your company grows, manual efforts typically result in increased errors, which many times has a downstream effect on your profitability. Although many companies are moving to an automated billing system, finding the right billing platform can be challenging. To help you on this quest, we’ve outlined the six most critical aspects that you need to consider.
- Start the process by reviewing your pricing plans. This includes subscription billing, usage-based billing, dynamic billing, and hybrid billing, as well as pricing bundles, packages, promotions, and discounts. Be sure to consider potential future pricing models during this phase of the process. You want to ensure that the billing system you select can efficiently handle today’s pricing models, as well as tomorrow’s.
- The system should have integrated workflow automation capabilities. This allows automation of key business processes around events, attributes, and/or time. For maximum productivity and minimal manual effort, it should provide a simple point-and-click interface. Plus allow you to set up and orchestrate workflows involving multiple steps.
- Ensure you’re able to split large invoices with numerous charges into smaller invoices that are individually approved and sent to the customer once the product is delivered or service rendered. Referred to as event-based invoicing, this functionality allows you to define invoicing cycles based on a single event or group of events that signal the close and delivery of an invoice.
- Customers want a choice when it comes to payments. Be sure the system allows for a variety of secure payment options, such as debit cards, credit cards, ACH, checks, PayPal, etc. In addition, if you sell globally or plan to sell on an international level, you’ll need a billing system that has built-in internationalization and includes functionality for localization, multi-currency, multiple languages, and regional taxation.
- The billing system needs the ability to automatically generate invoices, as well as accept payments. However, automation shouldn’t end there, you also need to automate credits, refunds, dunning, and collections.
- Finally, ensure you’re always compliant with ASC 606 and IFRS 15, revenue recognition so that you only recognize revenue when performance obligations are met.
Manually managing billing can, and does, lead to errors like missed calculations. Then the time and effort spent correcting mistakes is both time-consuming and costly. Want to dig a bit deeper into requirements for billing automation? Check out our 7 Questions to Clarify Your Requirements for Automated Billing blog.
Reap the Benefits of Billing Automation
When you automate billing processes, you gain both speed and efficiency. However, there’s one thing to keep in mind when selecting a billing platform vendor. The billing system needs to conform to your business, not the other way around.
BillingPlatform’s cloud-based billing platform enables you to easily automate the entire quote-to-cash process. We give companies, like yours, the power to enable any kind of pricing model, bring new and innovative products and services to market faster, reduce operational spend, and deliver a frictionless customer experience. Learn more about how we can help by reaching out to our team of experts today!