Recurring Billing System – Build vs Buy?

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| Last Updated: September 22, 2017 |

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Build Vs Buy

Build Vs Buy?

One of the integral parts of running your SaaS business that you have to think about is a billing solution. Should you buy an existing solution or build one from scratch? Billing solutions issues should be thought out in advance to keep your company focused on your core business.

SaaS start-ups have to think carefully on the recurring billing solution to adopt for their businesses. While there are already great working recurring billing solutions in the market, some start-ups opt to develop their own. Is this really worth it? Let’s look at some of the arguments for and against building your own recurring building system.

Development Time

If you need a billing system within a few weeks, it is better to buy. Building a software application like a recurring billing system takes time and setbacks may occur along the way that can mean postponing the launch of the application or releasing an unfinished system. Unless you are willing to risk your company’s reputation among customers by putting out buggy software, you should buy.

On the other hand, if you still have time before the launch of your business, you can recruit brilliant programmers to code your billing software.

Quality of Application

Most SaaS businesses opt to build their own billing solutions when they find the available solutions lacking a feature that is important for their business. Perhaps it can be integration with a certain application that is crucial to the working of the SaaS company, maybe it is output of values in a different language, and so on.

The downside of developing your own software is that you are bound to end up with a low-quality solution. The security features, reporting systems and features of your solution may not as be as robust as those already available in the market.# Why re-invent the wheel when there is a working solution in the market?

Direct Costs

Developing an online recurring billing system is not cheap. Considering the tasks that the solutions are involved in, it is easy to see why the development cost are astronomical. If you choose to build, you will have to think application testing and deployment, fixing bugs and releasing patches, security and backups, ongoing support and maintenance and so on.

On the minimum, you can expect development of such an application to take from 6 to 8 months and cost anything from $10,000 to $300,000. Do you have the capital to finance the development of such an application? This amount can pay for an existing more robust and stable recurring billing system that has a proven track record of reliability and performance.

Risks

Developing your own recurring billing system exposes you to many risks. For example, you may need to upgrade or expand your servers to host the application. You will also need to update your servers’ security system to prevent intrusions by hackers or viruses. All these add up your costs. You have to be PCI-compliant to hold sensitive customer data like credit card information and there are huge fines for companies that put customer data at risk.

Most importantly, however, you run the risk of your billing system obstructing the growth of your business. As your subscriptions begin to scale and get more complex, it becomes increasingly time and effort intensive to build billing features that allow you to cater to them.

The total risks of having your own recurring billing solution may not be worth it considering that there are solutions that already do what you want to achieve more efficiently.

The cost of building your own recurring billing system is expensive both in terms of resources and time. You are better off letting the existing recurring billing vendors worry about the difficult things like security, customer data safety, upgrades and patch fixes and so one while you concentrate on your core business of serving your customers.

Author of the post

John Solomon

Marketing Leader / Sales Enabler. Head of India Operations for @Infrascale / @sosonlinebackup.

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