Software as a service (SaaS) companies face many challenges in achieving their full revenue potential. Between scaling to meet demand, adapting to market trends, managing customer relationships, and preparing for the future; finance leaders, and the business in general, have a lot on their plate. When it comes to your pricing strategies, payment models, invoicing, and collecting revenue, legacy billing systems simply can’t handle the complexity. This is why when it comes to SaaS billing, there are some key considerations to keep in mind.
Turn SaaS Billing Challenges into Competitive Advantages
Regardless of the size of your SaaS company, you need to drive value and keep your revenue flowing. However, in a market that’s riddled with billing pitfalls, this is typically easier said than done. To put you on the road to SaaS billing success, we’ve highlighted the 8 most pervasive SaaS billing challenges and how you can overcome them.
1) Managing customer relationships
From the moment a customer signs up for your services, you need to be able to track their activations, trials, upgrades, downgrades, suspensions, payments, early terminations, etc. Manually handling these processes is daunting – to say the least. A misstep can lead to not only customer churn, but have a negative effect on your bottom line.
To keep your customers satisfied and your business profitable, you need to be able to easily tailor your offerings and prices – without IT involvement. To streamline your recurring revenue processes, you need a SaaS billing system that takes the complexity out of subscription management. A system that simplifies the complicated, conforms to your businesses needs, and provides the automation needed so that you can better manage customer accounts.
2) Keeping customers engaged
Regardless of the industry, keeping the lines of communication open is important in building long-term customer relationships. In the world of SaaS billing where complex offerings and pricing models are the norm, your customers may struggle to get the information they need. This makes it difficult to make purchasing decisions, handle payments, and manage their accounts.
By providing customers with an intuitive self-service portal, you’re able to share information with your customers and build loyalty. Empowering customers through self-service not only enhances the customer relationship, it enables you to lower costs and operate more efficiently. For instance, the right SaaS billing system should provide your customers with the ability to view account information and usage, pay invoices, and update their payment information. Doing so frees up your resources and reduces calls to your contact center.
3) Managing product bundles
Although the number of product bundles offered by SaaS companies can vary greatly, the average is 3.5. However many SaaS companies supplement their offerings with a la carte options. While increasing the number of bundles may be inevitable when trying to stand out and gain a competitive advantage, this strategy may complicate purchasing decisions and increase the complexity of product packages for the SaaS company.
A billing platform that provides unlimited pricing and rating capabilities, as well as allowing you to design innovative and flexible bundles gives you the freedom to continually improve your offerings, respond to industry trends, and rise above the competition.
4) Deploying flexible pricing plans
Your customers’ needs are nearly as vast as the number of customers you have. If we take this a step further by including fluctuating requirements, the ability to deliver diverse SaaS pricing can quickly become overwhelming. Not to mention be cost-prohibitive.
You need the ability to quickly and cost-effectively design and deploy any number of simple to complex pricing tactics. All without disrupting your day-to-day operations. With full pricing flexibility you’re able to support any combination of pricing models, from per-user tiers to build-your-own bundles and everything in between. A comprehensive SaaS billing system that provides point-and-click configuration combined with powerful workflow automation enables you to quickly bring your most ambitious and creative pricing strategies to life.
5) Launching incentives
Short-term sales programs such as discounts, promotions and coupons can help grow your customer base and boost loyalty. If you’re still using a legacy system or trying to implement incentives manually, chances are you’re spending thousands of dollars each year on these initiatives.
A centrally managed billing platform takes the manual effort out of sales programs, enabling you to automatically combine promotions with your products and services. This way you can quickly, efficiently and cost-effectively drive sales and revenue.
6) Accelerating the delivery of accurate invoices
With hundreds or thousands of customers, just managing the sheer number of invoices can over burden finance leaders. And, when invoicing is delayed, contains errors or just not sent, your ability to quickly collect revenue is hampered.
A billing system that increases accuracy and automates invoice processing eliminates this labor intensive task, and puts your SaaS company on track to collect the revenue you’re due.
7) Recognizing revenue
Revenue recognition for SaaS companies is not as straightforward as it is for more traditional business models. In addition to adhering to revenue recognition rules, you also need to take into consideration several other factors. Revenue recognized over time, your various billing methods, subscription additions, upgrades, downgrades, contractual commitments, and more.
With a billing platform that gives your finance teams total control over revenue recognition, you’re able to stay in compliance with ASC 606, IFRS 15 and other regulations, while realizing revenue as soon as possible. A SaaS billing system that combines billing and revenue recognition simplifies revenue management. It does so by assigning financial transactions and executing revenue recognition in real time – as events happen.
8) Expanding your footprint internationally
When taking your offerings across borders there are numerous considerations before the launch. To expedite your entry into new countries and to avoid complications that arise when expanding globally, your SaaS billing system must support localization.
To ensure that your expansion delivers on your internationalization objectives, such as customer and revenue growth, your billing system needs to have the ability to localize your offerings. Essentially, the billing system needs to be able to support multiple languages, currencies, number fields, tax providers, payment providers, regional regulations and much more. In addition, you’ll need the ability to easily configure the user interface (UI), pricing, packaging and invoices, as well as other documents.
Unleash the Power of your SaaS Business Model
Only an easy to use, yet sophisticated billing system can address the complex needs of SaaS businesses. Finance teams must be able to configure the entire billing cycle to their organization’s unique needs, from product catalog management to collections and dunning. BillingPlatform enables unrestrained SaaS billing innovation through its open architecture, custom data model, and vast array of features. Our cloud-based system is designed to flex to the needs of any SaaS business, no matter the industry, product or service. Every day, BillingPlatform gives SaaS companies the ability to achieve their highest level of revenue potential. With us you’re able to monetize SaaS offerings on your own terms, and outpace the competition.