You’re being held back by your labor-intensive manual billing procedures.
You are well conscious of the issue. And you believe that automation is the solution: relieving important team members of monotonous tasks will free up their time to support your business’s growth as intended—and beyond!
Your business case is flawless now. To senior stakeholders, it was presented.
Now, look at us. The time has come. You finally get the go-ahead! The good part is about to start. The search for brand-new subscription management software has begun.
Unfortunately, it’s not all free samples and good times. This huge acquisition is a big issue; it necessitates fundamentally altering current procedures and does not necessarily involve a minor cost. This choice will have some effect on your entire department of revenue operations.
However, you can take heart—help is close to reaching! So, gather your short selection of products and begin your voyage of software evaluation. We’ll help you determine which option is best for your company. Here are some expert hints for specific queries you should pose to potential suppliers along the road.
1. What happens if I invoice for more revenue than I expected throughout the year?
Subscription management software is primarily made to manage customer payments and automate recurring bills. And as your firm expands, so do your needs for billing. To put it another way, rising annual recurring revenue (ARR) denotes the growing use of your subscription management system. Therefore, it seems sensible that billing software providers base their prices on the amount of revenue you invoice.
You might be on a basic plan with a monthly fee of $199 if your subscription business bills less than $500K in yearly revenue, for instance. The next level plan would be yours whenever you reached the $500K mark. The price of one, let’s say, is $499.
Imagine that you were, to begin with, the most basic plan, with a $450K projected ARR. However, your sales crew is blazing! You’re having a fantastic year, and, in just six months, you’ve surpassed your $450K revenue target. You have an impressive $800K in invoices at the end of the year. Well done.
awesome, right? Okay, sure. There is however more to it. In the subscription management industry, certain major providers impose overage charges.
As a result, if your invoice for more than what is allowed in the revenue band, the vendor will take a portion of that money, thus punishing you for expanding your business. The cost is often in the range of 0.5% to 1%.
A 1% overage fee in our scenario would cost $3,500. Not much, but nonetheless, an odd punishment for developing more quickly than anticipated.
When your contract is up for renewal, a vendor like Work 365 Bill would only move you up to the next pricing tier.
2. Can you work with the other components of my tech stack?
By itself, billing automation saves your AP team a significant amount of time—up to 40 hours per month, which can be used for other important tasks.
If your subscription management software could interface with components like yours, think about the effects it might have on internal procedures:
- CRM software streamlines the data flow from prospects to customers.
- Utilising an ERP system will allow your finance staff to manage payments, upload invoices with ease, and synchronise information for more accurate data.
- With the use of tax software, you may comply with ASC 606 while navigating the minefield of state-specific tax rules in the US and abroad, potentially saving you tens of millions of dollars.
- Payment gateway, enabling additional payment methods, supporting quicker and more effective cash inflow,
- Wearables, vehicles, equipment, and other IoT devices
- By streamlining usage tracking, enabling usage-based billing, and integrating billing activities with prompted in-platform answers, usage-based billing is made possible for your SaaS product.
Therefore, you should consider integrating your complete finance stack for more seamless operations in your subscription-based firm. And you’ll want to start out by choosing wisely. It would be a major hassle to roll out a subscription management system throughout the entire company only to discover that it isn’t compatible with a critical component of your tech stack or that its API is inadequate.
3. How simple is it to modify a customer’s plan or the catalogue?
A relatively flexible catalogue is a feature of any current subscription management solution worth its salt, but some do it better than others.
It’s difficult to fathom a subscription-based business today that doesn’t plan for:
- offering a mix of subscriptions and one-time purchases,
- releasing new items or services,
- experimenting with various pricing models or pricing plans,
- or switching clients between plans.
You require subscription management software with remarkable catalogue flexibility for these items. You can adapt subscriptions to each client’s particular demands if you have the tools to alter price or packaging at the consumer level. You now have a significant competitive advantage, particularly in B2B sales.
Agile catalogues also clear up billing-related muddles. You don’t need to use a workaround to enter sales that don’t fit into your pre-planned schedules, like naming add-ons wrongly or treating them as distinct subscriptions. Customers who don’t know the line items could become irritated by situations like that, and it contaminates data and practically ensures false reporting.
4. Do you help customers reduce their payment processing costs?
Utilizing a recurring income model entails routinely collecting recurring payments from clients. Additionally, because billing occurs repeatedly, credit card processing fees become a common and unavoidable annoyance. They can become quite expensive very fast at 2%–4% for each transaction.
Although there is no way to eliminate this expense, you can save some money by finding out whether potential subscription management suppliers have any special arrangements with preferred payment gateways.
But how would sign with one who does help your company? You are a more valuable customer in the vendor’s eyes. Why? In essence, you want to purchase not just one but two of their goods. You might stand to gain from
pricing aggregation and
a payment processing subscription model, which is more dependable and cost-effective than the typical fee-based model most gateways provide.
Overall, you might notice enough cost savings to make the product profitable!
5. How flexible are the pages you host?
Simple improvements like a hosted self-service portal and registration page can greatly enhance the customer experience. By managing subscriptions on a self-service site, customers gain control. A recent Frontegg study found that 77% of respondents said they prefer to use self-served SaaS applications. Microsoft data support the assertion. According to a study by Microsoft, 65% of respondents from around the world have a more favourable opinion of firms if they have a mobile-friendly customer support portal. The percentage is 79% among millennials, which is considerably higher. People want to handle their problems on their own whenever and whenever they please.
However, the ability for customers to manage their own subscriptions has advantages for all parties involved. Additionally, it lessens the workload for your support staff, giving them more time to concentrate on initiatives that will spur corporate growth.
Although they should be hosted by your subscription management software, these pages should be editable to match your branding and the unique requirements of your company. Will various client segments, for instance, have access to tools? What level of management will they have over their subscription? The many possibilities for payments, including method and frequency, and how they will need to mirror your pricing plan, are other items to think about.
If you want to earn the trust of your visitors and give them a satisfying browsing experience, you must customise the functionality of your hosted pages. For instance, having control over page layout enables you to maximise the user experience, which can boost conversions and have an impact on your revenue. Customers will feel reassured and confident in your brand because of the customised use of colours and styles, which is an important metric for subscription-based businesses.
Finally, your hosted pages must adhere to the highest level of PCI-compliant data security because they will collect sensitive customer information like contact information and billing details.
Choosing the ideal subscription management tool for your company
It won’t be as easy as comparing prices online and signing up for subscription management software for most cloud-based subscription firms.
A recurring billing platform can do more than just automate invoicing and reduce administrative work. It’s a comprehensive subscription lifecycle management system that will become crucial to the smooth running of your company and a turbo-charged engine for epic expansion.
You should be able to fine-tune your selection procedure and narrow down you’re shortlisted vendors using these five questions. Your chosen candidates ought to provide ASC 606-compliant revenue recognition, sophisticated financial reporting, subscription analytics with data-driven insights, adaptable hosted pages, a variety of integrations, catalogue flexibility, transparent and reasonable pricing, lower payment processing fees, subscription analysis, real-time revenue tracking, and a full complement of cutting-edge subscription management tools.
Finally, you should be ready to choose the ideal high-impact software when it comes time to make a purchase so that you may significantly enhance every aspect of your subscription-based business.
Work 365 is subscription management software used by Microsoft partners and software vendors to streamline billing, invoicing and subscription management and reduce customer churn.