It’s a regular Tuesday morning. Or at least you think it is until you realize it’s the end of the month, and it’s time to verify and send all of your invoices for the month manually.
You grab an early lunch and brace yourself for a day-long marathon of deep-diving into the month’s billing cycles, invoice statuses, and state of subscription for each customer. You notice occasional goof-ups in the invoice amounts, and you double-check everything before finally billing the customer.
Fast-forward a few quarters. You now accept more than three payment methods, including the old school cheques. You’ve added more logos to your customer portfolio, and your pricing model is evolving. The future looks bright, but it gets tougher and tougher each month to manually verify and keep track of billing and invoicing.
And one day, you realize that despite all the checks, you have billed the customer double the amount than what was intended. Now you have a highly displeased customer and an equally frustrated accountant who has to sort out the mess.
Did you find yourself nodding in agreement? Have you found yourself deep in the endless manual billing and invoicing rabbit hole?
If yes, I think you’re going to like this story because:
- You’re not alone. (misery does love company)
- There’s a way out. (automation! But how and what?)
Let’s see how a rapidly scaling subscription business solved this.
Growing Pains and Manual Workflows
The story above isn’t entirely fiction. We’re talking about real problems subscription businesses are facing in their growth journey. This business, in particular, is a payment recovery platform that’s rapidly scaling over the past couple of years, helping subscription businesses tackle involuntary churn. With a fresh round of funding and the growing potential of the subscriptions market, the opportunity in front of them was significant.
They charge their customers a flat subscription fee per month, along with usage-based billing components for a few customers.
With scale, it was increasingly difficult to manually calculate the usage-based component for some customers every billing cycle and ensure that the invoice says the same amount.
“Scalability is important. Each customer has different manual touch points. We have hundreds of customers now. How do we manage that when it’s triple or, say, quadruple?”
-Director of Finance
The billing process eats away DAYS from the accountant’s work, and despite all of that, it isn’t entirely error-free. Accountants are number wizards, sure, but they’re human after all. One of these days, there might be an erroneous extra zero in the invoice amount. Errors are bound to happen.
Another area of concern was reporting and finding the correct information at the right time. Churn reporting was particularly time-consuming, with revenue analysts spending hours and hours on excel sheets to bring out some actionable information. Moreover, making this information available for all significant organizational stakeholders became a challenge, as there was no single dashboard.
This became more evident come funding time, and presenting accurate information to investors in a short period became a mammoth task.
“We want to increase efficiencies on the finance side, automate the subscription finance processes and renewals, improve collections; but from a 30,000-foot view, we want to make the organization more integrated.”
-SVP of Operations
It was then that the executive team decided to solve this problem of siloed operations and to build more connected technology infrastructure for the business.
The Zero Moment of Truth
There is no dearth of buzzwords in the business world, but this is one of my favorites.
The Zero Moment of Truth (ZMOT for short) is the decision-making moment when you’re evaluating a solution. In this case, it was two things:
- The scope of error: They almost sent a customer double the invoice amount due to a usage-based billing calculation error.
- Siloed operation and reporting: Execs were dependent on one or two folks in accounting for all the billing information, which was not that easy to extract on short notice. Accurate reporting was a pain, with no central dashboards and heavily manual workflows.
“I’m trying to clean data as I go. That’s been a little challenging. It ends up being like over half my day. And everyone’s trying just to piece together different numbers because systems aren’t speaking.”
And that’s when they realized that manual billing and reporting are not going to cut it by far with their growth ambitions in mind.
Thus began a search for a solution that will solve these problems:
How to save time spent on manual invoicing? How to make the process error-free?
How to make the order-to-cash process more efficient?
How to make reporting more accurate? How many customers are churning and why?
How to test pricing experiments and their possible impact?
How to be less siloed, more connected, and access the right kind of information whenever needed?
In their quest to rid themselves of billing inefficiencies, they came across Chargebee. The VP of finance saw great promise in Chargebee. Automating recurring invoices, managing different pricing models such as flat fee and metered billing, and syncing information from accounting systems was as easy as pie with Chargebee. The product catalog made it easy to manage plans, add different currencies, and add discounts in bulk, and change billing cycles for subscriptions in just a few clicks.
Moreover, revenue analytics right within Chargebee made it possible to analyze churn cohorts as often as needed. Finance watch dashboards presented a clear picture of Monthly Recurring Revenue (MRR), cash flow, payments & refunds, and credit card expiry of customers.
Chargebee was on its way to becoming the single source of truth for all things revenue operations.
Scaling Revenue Management with Chargebee
With Chargebee, the business is now able to save a tonne of time (which the director of finance was quite pleased about) and move away from siloed operations.
“I think this solves a lot of not just Finance pain points but even broader organizational pain points.”
-Director of Finance
With churn and revenue reports accessible at their fingertips, the team is geared to make data-driven decisions and scale new heights in their growth journey with global expansion on the horizon.