Over the past 5 years, more companies have shifted or started experimenting with recurring revenue business models. At the moment, software companies dominate the recurring revenue business model. Undoubtedly, there is no other industry where the recurring revenue model is used more than in the SaaS industry. However, even retail companies are starting to experiment with recurring revenue models. The rise of gift box companies like Birch has inspired a new breed of retail recurring revenue businesses. Even larger brands like Target have started online recurring delivery.
The benefits of a recurring business model are clear. With the model, businesses can better plan their expenses and expansion because they can predict revenues more accurately. Moreover, businesses get a higher value per user than they would in a perpetual software licensing business model. Finally, if your product or service is good, you have guaranteed monthly revenue even when during times of stunted growth.
However, to be successful with your recurring revenue model, you need a good subscription billing software. The software will maximize your potential of generating recurring revenue stream through various features.
Impact of Recurring Billing Software
Recurring billing software should help you to manage sales, finance and customer service effectively. Ideally, the solution should be able to integrate with your front-end and back-end office processes. This means you can get real-time view of your customers and their interactions with your app. A good solution will drive profitability by increasing billing efficiency and bolstering revenue recognition process. Apart from this, customer satisfaction will increase, resulting in increased renewals, upgrades or purchase of more complementary services.
Some of the benefits of a recurring billing software include:
i) Upsell customers for more revenue
With the solution, businesses have the ability to monetize customers with strong upsell and cross-sell management features. A good system should enable customers to easily upgrade or manage their service consumption right from the dashboard. This will not only save you time, but also improve your revenues.
ii) Better customer service
The solution helps businesses to improve customer care by enabling sales, finance and service teams know all they need about customer behavior. The software can provide the departments with relevant information that can be used to increase consumer renewals.
iii) Generate more profits
The software helps businesses to increase profits from users by reducing the “cost-to-serve”. Automated billing software reduces the stresses that come with billing customer manually. Imagine if you have to bill 1,000 credit cards manually? Manual billing will take the time you would have otherwise used for other productive activities.
iv) Bill customers accurately
The software gives businesses more professional and accurate billing. By using a recurring billing software, you eliminate the risks that come with immature financial systems or spreadsheet based processes. Your inputs and charges will be more accurate and done on time, which leads to a better financial health of your business.
v) Determine future revenues accurately
An automated recurring system helps businesses to determine revenues over different cycles. The software can help you to easily determine the revenue generated by customers over a term of the contract. You can also see how it compares with other revenues generated over other schedules.
vi) Support agile pricing changes to subscription plans
The software makes it easy for you to change your subscription billing plans without the need of integrating a custom integration. The changes can be made in response to market demand while customer can change their price subscription to match their needs. You can also minimize revenue recognition issues and errors and thus improve the accounting department’s staff performance
Make Billing Easier With Recurring Billing Software
Automated billing software makes billing easier, enabling easily management of your recurring billing processes. With the software, you can bill customers on time, provide them with self-service abilities and let them manage their own billing plans, find demographic information and payment options and so on. The software allows you to provide faster service, thus increasing customer satisfaction and turning billing into a competitive asset.
Other capabilities of the system include billing in advance or arrears, pro-rate partial months, manage different billing terms (monthly, quarterly, annually, etc.), providing dashboard and reporting across all business functions (operations, finance, sales, and services), built-in billing and revenue recognition functionality, among others.
Automated billing systems help you have a better outlook of your revenues at any particular time. With a good solution, you also improve efficiency of your business and free time to attend to important core matters such as product development, global subscriber base support and so on.