Do you often feel like your SaaS product is attracting a lot of clients and your team is working to full-capacity, yet every day is a struggle with negative cash flows?
Then, it's likely that a bottle-neck (or more) exists in your billing cycle.
If you want the money to reach your business goals faster, reducing the billing lead time is critical.
After all, only if the client receives the bill can they pay for your solution on-time fueling your cash flow.
This brings us to subscription billing management solutions that automates and streamlines your billing so that it is a no-brainer - accurate, efficient and super-fast.
Read on, as in this article, we look at how a subscription hub helps increasing invoice accuracy, speed up billing, and improve cash flow.
But first, let's understand why the manual process isn't really working for most companies.
How manual invoicing processing puts the brakes on billing
Every SaaS business shares bills with their customers in hopes of being paid within a certain amount of time for the provided services. The more customers you have, and the shorter the billing frequency (i.e. monthly or quarterly), the more bills you will need to send.
This billing process involves quite a few steps, from invoice creation, review, and approval to dispatch.
So many invoices and invoicing steps, so little time.
And since B2B subscriptions tend to be advanced and customized, you will have to spend extra time on the invoice processing for each billing period.
Most importantly, for each invoice, you will need to identify, extract and input the correct data such as:
- Subscription heads information: Using account and billing account, terms of subscription, and notice period terms
- Product data: Recurring fees, variable usage based fees, monthly /quarterly pricing period, frequency, and revenue recognition rules
- Pricing tiers: Basic, Advanced, Enterprise, etc
- Real-time usage data
Human error creeps in when you try to manually manage all this data on spreadsheets or multiple apps. This results in inaccurate invoices, especially as your business starts to scale. Also, human intervention at every step of the process decreases data integrity, nor is it time-efficient.
Hence, a new, automated invoicing process is the need of the hour.
How automation = higher billing efficiency= faster billing speed
Since more and more companies are looking at consumption (usage) based billing to get their pricing right, it's not easy or efficient to manage it without the right billing systems in place.
It takes a lot of effort to manually manage the billing for various subscription plans and billing frequencies.
To gain more control over your client subscriptions, it is imperative to use a billing tool that automates the more repetitive tasks in your invoice processing workflow.
This is an essential step towards speeding up your billing workflow.
That’s not all, such billing software also helps:
- Ensure that you don't leave money on the table
- Reduce instances of invoicing errors
- Reduce admin and billing workload
- Deliver customer delight
3 ways in which subscription billing software speeds up billing and improves cash flow
Month after month or year after year, you need to craft bills, send payment reminders, and keep track of payments.
So for SaaS businesses, a subscription invoicing solution is non-negotiable when it comes to improving the cash flow and avoiding that giant pile of paperwork!
Here are some of the ways this technology can help make your billing process speedy and efficient:
1.Optimizes invoicing: Get the invoice out faster. If you bill your clients promptly, as soon as the job is done, chances are you will get paid on time too. Auto-billing software ensures that your team never forgets to create and send the invoices.
It auto creates the bills and with just a few clicks allows you to send the invoices on their way to the client. Here is how a good billing software works in the two most common scenarios:
- Frequent occasions: The system gives you daily proposals on the invoices that need to be sent out. As soon as you approve it, the invoices are shared with clients.
Infrequent occasions: If you only bill clients once in a while (eg: quarterly or yearly), then the system will process all invoices within a period, in one batch
The tool also optimizes your billing cycle in the following ways:
- Regularly establishes and tracks invoice processing KPIs to resolve process inefficiencies.
- Automatically emails customers about renewals or unpaid invoices
- Integrates with your ERPs to extract data from ERP solutions to help your team stay up-to-date on subscription terms and usage details
2. Reduces dependencies on the person executing the billing time after time: Let's face it, there are a hundred-thousand more fun things to do than invoicing.
Therefore, one of the roadblocks in your billing process may be that no one actually wants to be in charge of preparing and sending out the invoices. A billing software can fix this by automatically generating and dispatching invoices, and making the approval process more seamless, so that your team has more free time to focus on more strategic tasks. It also removes the dependency of that one person when he/she is enjoying a nice holiday, business continues as usual.
3. Harnesses subscription data in a structured way: Sometimes, the reasons for delays in payment is that:
- Customers have questions about the invoice. For example, why does the invoice feature old billing terms, when we had tweaked it in the contract one week ago?
- Internal team members notice errors and add manual comments on the invoice that will go back to the invoice preparer for review. For example, why are we billing the client for 12 users, when only 10 are actively using the solution?
Answering these questions and making corrections in the invoice (if required) slows down the billing workflow.
An automated billing software captures all subscription and usage data from your SaaS apps or ERPs so that your billing is always accurate and current. Thus, this single source of truth improves internal and external efficiency and reduces billing errors.
And when you clearly communicate what they are paying for, you end up with happy customers.
When is the ideal time for me to automate my invoicing process?
To get an easy return on investment out of your billing automation tool, it is recommended that you wait until your SaaS business attains an ARR of > 100KEUR. However, complexity in your customer agreements says more about the need of a tool rather than your ARR, if you just started your journey as a SaaS company, want to have full creative freedom in your packaging and pricing and focus all your time and energy on building and growing your business instead if back-office related tasks you will not be our first customer that started that way.
How to switch to billing automation
There is no doubt that subscription billing technology is good for your SaaS businesses.
Yet, as per a recent poll, 50% SaaS businesses manually run their billing, while 50% have a billing system that is partially automated.
So, what's stopping businesses from adopting automated billing software?
Simple: they have not found the right one yet or they don’t know these solutions exist. Even more so, we have met many customers that assumed their proposition was too “advanced” to manage in a Subscription Management solution. Our customers are living proof that there is no subscription we cannot manage.
There is also a modern myth that switching to a new way of billing is a complicated affair.
Luckily, Younium with its API capabilities makes this digital transformation almost effortless.
In no-time, you will automate your entire invoicing process, understand your SaaS metrics with users gaining access to the system long before that. Give us your case and we will look into it how you can shorten your billing lead time. Reach for here for Younium showcase.