The global subscription economy is growing at a rapid rate and is expected to reach $1,500 billion by 2025, from $650 billion in 2020.
That’s one of the reasons why so many businesses are shifting to the subscription business model.
This calls for the need for good subscription management software with features that can help manage all aspects of a subscription business.
What are the most important subscription management software features?
Well, you’ll find out soon enough. In this post, we’ve compiled a list of must-have subscription management software features that you should consider before making a purchase.
But, before that, let’s first understand what a subscription management system is and why it’s needed.
What is Subscription Management Software?
A subscription management software solution helps SaaS businesses optimize and automate their invoicing, billing, payments, revenue recognition, etc.
Subscription businesses earn recurring revenue that is often different for different customers and can change mid-cycle. Given the complexity of the subscription billing model, there are multiple scenarios where a CRM, regular accounting, or invoicing solution will fail.
Subscription management software solutions are designed specifically for such businesses and offer specific features to tackle these complex scenarios.
What are these features?
Let’s find out in the next section.
What are the Most Important Subscription Management Software Features?
Here are the subscription management software features that you should consider when selecting one for your business.
Remember, that most solutions will offer these features, but not necessarily at an advanced level. You need to look in-depth to see exactly what features a solution is offering and how it differs from that offered by other software solutions.
Keeping that in mind, let’s get started with our list of top features.
1. Flexible Billing Options
One of the most important features of subscription management software is its ability to bill different types of businesses and business plans.
Subscription businesses work on different pricing models, provide different billing schedules to different customers, and have a lot of other complex billing scenarios.
Billing for subscription businesses, therefore, is not as simple as a one-time payment for a good or service.
Additionally, subscription businesses earn recurring revenue, so SaaS subscription management software should provide an automated recurring billing option.
It should be able to automatically bill customers on specific dates, according to their plan and payment schedule.
Imagine how much more complicated it would be if you need to keep track of this instead of your subscription management solution.
Let’s discuss the different pricing models and scenarios that good SaaS subscription management software should be able to handle.
Ability to Adapt to Different Pricing Models
Here are some common pricing models used by subscription businesses. Choose a software solution that can adapt to all of these.
A system in which customers pay a flat subscription fee for a specific set of services or features for a given time period.
Example: $10 per month
In this model, customers can choose one out of multiple pricing plans with different sets of features and services. Plans with fewer features will cost less and vice-versa.
- Basic: $9.99 per month
- Standard: $15.49 per month
Here’s another example where the tiers and features are defined by the end-user.
Image via SuperOffice CRM
Per Unit/User Pricing
In this case, a business charges customers a fixed amount for every unit or user. So, it’s a usage-based pricing model for which a software solution should be able to track usage and charge accordingly.
Example: $10 per user per month or $0.01 per click
A freemium model offers a free plan with limited features or usage limits. To get access to the complete set of features or increase the usage limit customers need to buy a paid plan.
Example 1: Free for 3 projects, 20 users, and 1GB storage; upgrade to paid plan if you need more.
Example 2: Free till 10K messages and 5GB storage, chargeable after that,
Image via Slack
Ability to Handle Different Billing Scenarios
One of the crucial SaaS subscription management software features is the ability to make adjustments and perform calculations to accurately bill customers.
There are many scenarios where a customer’s bill amount or schedule would deviate from the normal. Your software solution should be able to adjust for these changes.
Let’s discuss some of these billing scenarios where additional calculations and adjustments may be necessary.
Some subscription businesses provide their customers with the option to choose the date on which they want to make their monthly payments. This date may vary from customer to customer.
Good SaaS subscription management software should be able to automatically bill customers on their chosen dates.
Offers & Discounts
Many SaaS businesses offer sales discounts from time to time to attract new customers. Look for a solution that can adjust the current prices and adapt the changed price as and when required.
Also, the discount should automatically reflect on the invoice as well.
Adding to the previous point, your software solution should also be able to charge different prices for the same plan from old and new customers.
Essentially, every customer should pay the price they signed up for when they bought the subscription.
Grandfathering basically allows you to keep existing customers on the same plan, while experimenting with different prices to acquire new customers.
This is one of the most important billing features for a SaaS subscription management software solution.
Mid-Cycle Changes or Prorations
Sometimes customers may change their plan mid-cycle and upgrade or downgrade their plan. Good SaaS subscription management software are capable of recognizing these changes and making instant changes to update the bill amount.
2. Advanced Invoicing
The second on our list of important subscription management software features is invoicing.
While every subscription management solution will have invoicing as a feature, you need to see how basic or advanced their invoicing functionality actually is.
Let’s discuss some of the must-have invoicing features for subscription management software.
Your subscription management software solution should be able to automatically generate invoices by gathering data from your accounting software.
It should also be able to produce accurate invoices for all the different billing scenarios mentioned above.
Every business has different requirements for the fields they want on their invoice. It’s not a one-size-fits-all solution.
So, look for subscription management software solutions that allow customizing the invoice according to your requirements.
If your business offers multiple types of subscriptions, you need a solution that can consolidate all information for each customer.
So, if a customer makes more than one purchase, you can provide a consolidated invoice. This would include the details of all the subscriptions a customer has purchased from you into a single invoice.
Consolidating multiple invoices into one make things easier for both the customer and your business.
This feature allows you to collect advance payments from customers, instead of billing them on a monthly or quarterly basis.
While it’s simpler to collect a one-time advance payment than charging frequently, not every software solution will provide you with this functionality.
3. Customizable Analytics Reports
Analytics and reporting are crucial subscription management software features that most platforms offer. However, not all subscription management software will offer advanced customization options to create targeted reports, even though they may offer basic SaaS reporting tools.
When comparing the analytics features of different software, always check the level of customization they offer.
If you can choose which subscription business metrics you can include in your reports and how frequently you want to get an automated report, then there’s nothing like it.
You should also check the kind of visualization options a solution offers, as it makes it easier to draw insights from a report. Ideally, you should be able to track the metrics that are important to your business in a way that’s easy to understand for you.
Younium, for example, provides an editable dashboard that you can customize according to your specific needs. You can also export reports as CSV or Excel files.
Image via Younium
Want to know the best part?
You can use these customizable reports to show your company’s investors how well you’re performing and how your business is growing.
Investors need regular updates on company’s health, and these analytics reports can help you keep your investors at ease.
And if you need to bring in more investments, showing all the company’s accurate performance analytics on a single platform definitely helps.
4. Multiple Payment Options
This is another one of the must-have subscription management software features that can’t be ignored.
Your subscription management solution should be able to accept multiple payment gateways and options including credit cards, wallets, bank transfers, checks, invoices, etc.
Why is it important?
It makes it easier for customers to make payments according to their convenience and that reduces abandoned cart incidents.
It should also accept payments in different currencies as that would allow you to cater to customers around the world.
Another feature related to payments is automatic and accurate tax calculations. We’ll cover it in the next section.
5. Tax Compliance
One of the features that enable smooth payments is automatic tax calculation. A good software solution should be able to calculate taxes in compliance with different tax regulations.
If you want a smooth workflow, your subscription management software solution should be able to automatically calculate taxes during the checkout process.
So, look for a software solution that specifically mentions tax compliance and calculation as one of its features. If it’s not explicitly mentioned as a feature, chances are that the software solution is not tax compliant.
Younium, for example, offers a tax-compliant solution for B2B businesses and explicitly mentions it on the website.
One of the features that you definitely want in your subscription management software solution is the ability to send automatic notifications, alerts, and reminders.
From the moment a customer makes a purchase and throughout their association with your business you need to keep them updated about important events.
For example, you should send a welcome email as soon as they sign up. You will also need to send payment reminders when the billing date is coming close.
Sending timely invoice reminders is especially important for B2B businesses as they mostly work on deferred payments.
So, when choosing SaaS subscription management software, always look for features that enable automated alerts.
7. Customized Customer Portal
Every SaaS subscription management software solution should have a dedicated customer portal. It’s where your customers can get all the information about their plans and can modify it if they want.
It should also contain all details on their bills, invoices, and other pertinent information. This enables you to maintain complete transparency.
What’s even better is that some software allow you to use your branding for the customer portal. So, your customers can acquire all information and make changes to their plan without leaving your brand environment.
8. Multiple Integration Options
Last on our list of SaaS subscription management software features is the ability to integrate with other tools and platforms.
As a SaaS business, you need a single source of truth for all your business data. If your subscription management system can integrate with other systems, such as CRM software, accounting software, ERP systems, and financial software, you can access all data from one place.
Moreover, integrations allow you to create streamlined data flow involving many systems working in sync. This will also improve your operational efficiency and ensure that processes work smoothly, without interruptions and data leakage.
So, the more systems your software can integrate with, the better. Younium, for instance, allows you to connect multiple systems using connectors and APIs.
Image via Younium
FAQs1. What are subscription businesses?
A subscription business does not sell a one-time product or service, but a subscription that gets recurring revenue. For example, instead of a customer paying for a product to buy it, they can buy a subscription to use a product for a certain period of time.2. What is subscription management software?
These are software that help manage all aspects of a subscription business from revenue recognition to automated recurring billing and online payments.
Such software solutions have features designed specifically for subscription businesses that deal with recurring revenue instead of one-time payments.3. What are the most important subscription management software features?
Here are the most important SaaS subscription management software features to look for when selecting one for your business:
- Flexible recurring billing options
- Advanced invoicing
- Customizable analytics reports
- Easy checkout
- Multiple payment options
- Tax compliance
- Customer portal
- Multiple integration options
One of the most important features of SaaS subscription management software is automated recurring billing. But to manage that effectively, it needs to be able to handle:
- Different pricing models like flat usage-based pricing and tiered pricing
- Complex scenarios that need calculations and adjustments like prorations and grandfathering
When looking for recurring billing features, always compare the detailed functionalities offered by each subscription billing system to make the right choice.5. What are the benefits of subscription management software?
Here are some key benefits of subscription management software:
- Automates billing, invoicing, payments, and tax calculations to save time and reduce the scope for error
- Improves data tracking and analytics to aid business decisions
- Integrates with other tools to provide a single source of truth for all your business data
- Meets tax compliance requirements by doing accurate and automatic tax calculations when accepting payments
- Helps avoid revenue leakage and enables advanced revenue recognition
But to realize all these benefits you need to choose a SaaS subscription management software solution with the right set of features.
Subscription management software are necessary if you run a subscription business, but they’re only effective if they have the right set of features.
What are the right features?
Well. that depends on your business needs and requirements. Still, we’ve made a list of the top must-have features that you should consider when making a selection.
You should go through these features and prioritize them according to your needs and then use the final list for choosing the right subscription management hub for your business. All the best!