Build or Buy Word Effect

Are you at a crossroads on whether to build your own online billing system or use one of the available solutions in the market? Start-ups and SaaS businesses are finding it more viable to use existing billing solutions than build their own solutions. Below, we outline why building a custom billing solution may not be the best route for your business.

Cost is one of the things that any business has to keep watch of and for SaaS businesses, things are not any different. Building your own online billing system is costly and will use capital and human resources that would otherwise be used better elsewhere in your business. There are some instances when building a custom solution may make sense. However, most businesses are better off working with the available solutions in the market.

We talked about Build Vs Buy – Recurring Billing system a few days back.  Here are the top 5 reasons to NOT build your own billing solution:

1. Costs

A good billing system costs time and money. You need an excellent team of programmers to code and get the system running. The total costs of developing a working system can be very expensive. You not only have to pay the programmers, but there are also third-party costs to think of such as purchasing SSL, hosting services, backup services, etc. Some of the third party costs are recurring e.g. SSL services, and this will mean having to budget for them very financial year.

2. Time Sensitivity

If you are looking to launch your SaaS business in four or fewer months, you are better off using an existing online billing solution. Building a proper online billing system takes time and bugs and other unforeseen circumstances can make it necessary for you to postpone your launch date. This can impact your business negatively especially if you had made a lot of preparations for the launch date

3. Quality

The majority of billing solutions in the market have all the necessary features that most SaaS businesses need. Unless you need a custom interface or integration with an in-house proprietary application that is crucial to the operations of your business, it is advisable to go for an existing solution. An in-house billing system may not reach the security, reporting capabilities and features of the solutions in the market.

4. Services and Storage

When budgeting, you may overlook the costs of hosting the application in-house. The setup cost and space for a secure and stable server room will mean more expenses for your business. Even if you already have a server, you may need additional online servers for the new application. Moreover, security issues can arise with adding new servers. For example, if a virus infects your servers, you will not only lose the billing solution but everything else on the server. This can bring your business to a standstill.

5. Ongoing Maintenance

Online billing solutions require ongoing maintenance. The e-commerce industry is rapidly evolving and technologies change. Your support team may have to fix bugs and install server patches to maintain your online billing application’s security or transition it to superior technologies. The design technology and safeguards put by your development team to monitor the application 24/7 need a lot of investment. Most small and medium-sized business do not have the investment required for dedicated firewalls and round the clock monitoring of their applications to make sure they are not compromised.

While there are instances when building a custom online billing solution may be viable, the total direct and opportunity costs of developing one makes the solutions available in the market a perfect choice for SaaS business.

Want to evaluate a billing system? Check out our guide.