So you’ve built a good business, and you’ve made a name for yourself. You’ve created stable revenue streams, and you’re looking to scale up. Now you’re here wondering whether automated billing makes that big a difference, strap in.
Yes. Yes, it does.
Embracing automation is a rite of passage to enter the big leagues. You should focus on maximizing your revenue and not worry about whether your billing system can handle the increased volume of transactions. You should chart plans for expansion and not worry about the operational difficulty of accepting different currencies or complying with multiple international regulations. You should be analyzing pricing strategies and not feel dread at the thought of executing a price change.
If you’re nodding vigorously at your screen, I’m here to tell you that your outdated billing system isn’t just eating up your time. It’s stealing your growth opportunities.
Automated Billing Vs. Manual Billing
Today’s businesses are turning towards a mix of one-time purchases, subscriptions, and usage-based billing. This is an entanglement of various subscriptions with various billing logic. As a business grows, it is only desirable and likely to see more volume of transactions which would eat up manual hours and the work-life balance of your employees.
Based on just these two factors, I can firmly say that any business keen on growth should not prefer manual billing.
Enter automated billing.
Automated billing is more than just neatly filed invoices. It helps you manage your cash flow, reconcile your payments, streamline collections, revenue tracking, and reporting. When you automate your billing system, you’re also automating tax management, payment processing, payment collection, and payment retries. Having the right automated system in place frees up your time to experiment with growth segments and pricing models.
Switching to automated billing is like switching from mortar and pestle to an actual electric blender. No one said they missed the mortar’s hand workout ever.
Growth with Billing Automation
Here are six reasons why automating your billing system would accelerate your growth.
1. Unlock new revenue streams with multiple product families
Subscription products typically have multiple plans. Now throw in add-ons, coupons, different price points, different currencies, and multiple billing frequencies. Imagine managing numerous product lines with this whole cohort of operations. It’ll make anybody sweat.
Automating billing with a scalable Product Catalog makes managing your product families effortless and significantly reduces the go-to-market time for new product launches, currencies, and billing frequencies.
2. Manage multiple pricing models and execute hassle-free pricing changes
The majority of pricing used today falls into these buckets.
- Flat rate subscription – a set price charged monthly but billed annually.
- Usage-based pricing – a ‘pay-as-you-go’ approach that charges you on the volume consumed.
- Per-unit and one-time pricing – these refer to one time transactions
- Tiered pricing – gives you different pricing slabs to choose from
When you scale this up for multiple products, each with its pricing model, it can get overwhelming quickly. With a scalable billing infrastructure, you can support multiple pricing models without wasting your precious hours poring over spreadsheets.
Implementing new pricing strategies or experimenting with pricing can decidedly influence your revenue generation, and you deserve to try on a few so you can find your glass slipper. A study found that continual price optimization helps shoot up your growth trajectory in a matter of months. A robust billing infrastructure makes running pricing experiments as easy as trying on a shoe. You can change your pricing model overnight, offer flexible billing periods, and grandfather your existing customers seamlessly.
3. Reach a wider audience by accepting payments globally
Targeting a broader audience means supporting preferred payment methods and payment gateways of the places you cater to. Your billing system needs to process larger transactions in multiple currencies and languages and calculate taxes based on your geographical location. It also needs to take into account compliance requirements.
Global taxes are evolving on a regular basis. With automation, you wouldn’t have to worry about the change every time it happens. Billing automation simplifies tax management with automated and precise tax rate updates and ensures effortless tax filing and reporting. It ensures you have custom tax rules for your subscriptions and gives your customers tailored attention.
An automated billing system also allows you to control the access levels of different people working with the tool. It helps one adhere to compliance more easily.
4. Stay on top of revenue leakage with dunning management
Did you know that 20-40% of your churn comes from credit card failures, and it’s not even voluntary?
Now imagine having to spot, cross-check, follow up and somehow revive this lost revenue without losing your customer in the process manually. And the icky problem with credit card declines is that sometimes your customer doesn’t even know that there was a decline. Hassle, isn’t it?
Now imagine the John Lenon way but in revenue management.
“Imagine all the people
Livin’ life in peace…”
…and having a dunning management system that helps recover the lost revenue for you. With automated revenue recovery, you can send payment reminders and retries at the right time, remind customers about changing expired cards, or update their payment methods, all with just a few clicks. It ensures that your hard-earned revenue doesn’t slip through the cracks.
5. Uncomplicate your revenue recognition
Your billing and revenue go hand-in-hand. It’s essential to track the money that flows in your account and how much of it is recognized. But revenue recognition can be a complex process for subscription businesses. Your subscribers have the flexibility to change their subscription tenure, pause or cancel subscriptions, and upgrade or downgrade to different plans mid-cycle. Manually deciding how much revenue can be recognized and when can be a nightmare for finance teams.
Moreover, accuracy is critical in the revenue recognition process because you can’t report incorrect revenue numbers in your financial statements and reports. Not to mention the ever-evolving global standards that you must stay compliant with.
Automated revenue recognition helps you eliminate complexities, automatically recognize revenue upon fulfillment, accurately forecast revenue, and stay compliant to global standards like ASC 606 and IFRS.
6. Streamline data collection for efficient decision making
Your business’s billing is a harmony of different factors coming together from unlimited data, including your customers’ confidential and sensitive information, their preferred payment methods, and so on. If you are handling it all on your own, it would require many tools to manage and process this highly confidential data. In addition, some of the accounting systems do not understand the logic of subscriptions, hence miscalculating a considerable portion of your MRR.
A comprehensive billing system centralizes all the data and even provides the relationship between the different data points like customer lifetime value, churn, average revenue per customer, etc. Some of the most integral data screaming the direction your company needs to take right away resides quietly in these datasheets.
How can Chargebee automate your billing process?
Billing automation offers a smooth, error-free experience for the buyer while helping you unlock growth opportunities for your business – it’s a win-win.
While there are many billing software, it is crucial to opt for one that understands your business and seamlessly fits your operations and structures. Chargebee scales seamlessly to match your growth while keeping in mind your unique billing needs and data integrity. You can check out how we have helped different organizations across different industries. If you’d like to automate your recurring billing, get in touch with us, and we’ll take it forward from there.