Introduction
In the recent years, billing and subscription management solutions have gained popularity because they offer customers three important things: simplicity, personalization, and value-based pricing.
As per the research by international growth strategy experts at Manifesto Growth Architects, 70% of businesses believe membership and subscription models hold great value for future commercial expansion. From healthcare to the IT industry to finance, the billing & subscription management solutions can help various businesses to grow in leaps and bounds.
Among many other strategies, an automated, fast, and simple customer experience is the foundation of a successful subscription business. This means you also must have reliable and easy-to-use billing system in place to enable you to bill efficiently, collect cash, develop better customer relationships, and optimize revenue potential.
What is billing and subscription management software?
A billing and subscription management software helps you streamline operational processes of your subscription business by providing a variety of tools and features. It improves the business profitability and overcomes the challenges associated with subscription billing, recurring revenue, and scalability by the subscription services providers.
Some examples of subscription services are:
- Internet services
- OTT platforms such as Netflix
- SaaS products
- Online training courses
Oftentimes, the process of managing subscriptions can be a mix of automated and manual actions. This includes things like:
- Refunds, discounts on services or products.
- Swapping out certain items with other products in place.
- Upgrading, downgrading, upselling, cross-selling.
- Pay as you go billing.
You’ve probably been asking yourself if it is more beneficial for your company to build a billing and subscription management solution on your own or go with the existing solutions available in the market. You must consider both pros and cons when making this decision.
So, let us dive right into them!
Building a billing and subscription management solution
One great advantage of building your software from scratch is that it gives you complete control over each component and function. When you make a solution specifically for yourself, your all needs get fulfilled.
Another advantage can be that as it is only for your own use, the development process can be quite flexible and can be continued over time. This means that it’s never too early or late to introduce new features, and there are no unwavering restrictions on what kind of innovation you want within your company.
Now, let’s list down the pros and cons of building a personal billing and subscription management software.
The Pros
- Customization of the product, anytime, as your business changes.
- Independent pricing tiers.
- Immediate action can be taken when bugs or issues are found in the system.
- Lower dependency on third-party.
The Cons
- The development process may not be easy because of the complexities involved.
- Dependencies still exist, for example, certain services from third parties such as services for payment gateway, card verification, APIs, security and more.
- Security might cost a lot of money and there is always the risk of non-compliance with strict laws.
- You may not have the right skill set in place.
- Time-consuming.
The idea of building your subscription billing automation platform is appealing, but it’s not an easy task. You’ll have to hire an IT team and they will be very busy with a lot of work for many months before they can even think about launching the product into production. Plus, security compliance can take up a lot of time.
If you still think you want to develop subscription management software, here are a few points you need to consider before getting into it:
- What is the size of your company and its potential buyers?
- What are your unique demands for subscription management software?
- Do you have sufficient resources to develop software?
- Do you have a strong maintenance plan?
- Will it be feasible in the long run?
- What kind of payment gateways do you need? Do you want a domestic or an international payment gateway?
- How would you keep your payment transactions?
- How would you manage declined or incomplete payment transactions?
- Where will you host your data – cloud-based or in-house servers?
- How would you comply with tax laws?
- Will your billing and subscription management solution be able to accommodate your business growth?
Buying a billing and subscription management solution
The most important advantage of buying a ready-made billing automation software is that it can be put to use immediately after buying – there’s no wait time. It is available at any time, which means there are no longer developing processes or waiting periods required to get your product up and running. And since there are regular updates in the software, all new traits instantly appear after installation.
Although, ready-made software may not meet your business’ every need; however, it does have its benefits. The most significant of these is that you don’t have to worry about maintaining or scaling your infrastructure as the platform takes care of both of them!
Now, let’s understand the pros and cons of buying a billing and subscription management software.
The Pros
- Automate pro-rated billing and payments
- Itemize invoicing for license and usage-based services along with your custom offers
- Provide customized online marketplace
- Easy to use self-serve capabilities for customers
- Manage your entire business from a single account
- Integration with various payment gateways
- Maintains the best security practices to ensure that your information is safe.
The Cons
- Lack of control over platform functionality leads to a higher dependency on the provider.
- Some platforms don’t allow for full customization.
- Additional fees like implementation charges.
Whether you choose to buy or build a recurring billing management solution, your solution must be expandable in the long run, adaptable to your pricing and customer preferences, and flexible throughout your use.
At the very least, any business needs basic functionalities from a subscription management system. This includes automated billing processes such as order processing, subscription, invoicing, renewals, etc. so that the company’s workforce can focus on higher value activities like sales, marketing or customer support, which are more profitable for any company!
We have prepared a business-critical list to ensure you are equipped with all the necessary features and capabilities to help you prepare for the major challenges that arise in managing subscriptions.
Things to consider before choosing a billing & subscription management solution
Subscription Management Solution for SMBs
Many SMBs do not require an overly complex billing automation system. So, we’ve listed important functionalities which are required for efficient billing.
- Key Billing Functionality: Core tasks like pricing and rating, packaging, taxation, and revenue management are all things you need to automate when running a full cycle of your business through a billing solution.
- Pricing Models: With creative pricing strategies, companies can grow their customer base and maximize revenue.
- Custom Document Creation: Custom documents such as welcome letters, invoices, etc. can help you give a more professional look to your business.
- Reports and Analytics: Real-time reports can help you track your company’s performance.
Subscription Management Solution for Enterprises
As your company grows, you’ll require more advanced billing software capabilities to streamline processes and eliminate manual effort. Let’s take a look at some of the features larger organizations need for them to be successful.
- Customer Portal: Empower your clients with self-service options that give them more control over their accounts.
- Pricing Settings: Offer a variety of pricing options to fit the needs and budgets of every customer.
- Account Management: By managing customer and partner accounts, you can exceed their expectations and increase retention.
- Revenue Management: Revenue management removes the complexity of financial closing processes and accelerates the growth of your company.
- Collections Management: It helps to find and collect outstanding balances with ease, putting an end to revenue leakage.
- Business Analytics: Real-time reports are important to get actionable insights to make better decisions for the company.
- Integrations: Integrations of front or back-office systems such as payment gateways, taxation, etc. with billing & subscription management software provides greater efficiency in day-to-day operations for everyone involved.
- Security: With the ever-growing data, you must maintain a high level of security and compliance to keep your customers’ information secure.
Conclusion
Choosing or building a subscription billing automation software is an equally daunting task. Whichever option you choose, you need to assess your current business needs and what speciality you will need in the future. If your billing system doesn’t follow your business approach, you’ll end up with lost income and confused customers. You need solid planning and expert help before opting for a billing automation system.
Originally Published on RackNap
