The Internet of Things (IoT) is evolving businesses and driving growth in increasingly innovative ways.
Reducing manual tasks and processes to ensure maximum efficiency can provide a competitive advantage that further fuels growth and ensures that a business is not left behind.
Recurring billing businesses in the digital age can’t afford to put off automation—especially those in the IoT industry.
Tracking hundreds and thousands of devices with manual data management doesn’t make sense, and it certainly doesn’t scale. And with the rise of usage based billing and hybrid pricing strategies in IoT, automated billing software has become essential to business scale and success.
Here are ten ways recurring billing software helps IoT businesses thrive.
1. Produces hyper-accurate billing.
Robust recurring billing software synchronizes IoT device data with invoicing. This means billing is automated and based directly on data generated by customer devices.
The task of manually transposing customers’ subscription and usage data into invoices—not to mention collecting payment on them—is not only error-prone, but it’s also nearly impossible to scale.
Additionally, while an incorrect charge in a traditional business transaction will likely only affect one payment, in recurring billing, that incorrect charge could repeat again and again until noticed.
This kind of error either eats away at revenue or overcharges the customer. Neither situation is acceptable.
With recurring billing software, billing can begin automatically as soon as devices are activated.
This real-time activation not only ensures you’ll never miss revenue from active devices again, but it also eliminates the need for manual proration for devices activated mid-month.
And all charges and usage fees can be set prior to activation—and adjusted as needed in real-time—meaning your automated billing system will always apply correct charges.
For accurate and scalable IoT invoicing, synchronizing customer, device, and usage data with recurring billing software is the answer.
2. Enables catalog agility.
Want to increase your value to your customers by creating and offering an add-on, such as increased functionality or a wider service area? No problem. A few clicks on an agile recurring billing platform brings the idea to life.
This is especially useful for marketing and sales teams. It unlocks freedom and creativity to come up with promotions or easily tailor prospects’ purchases to their needs without the restrictions imposed by needing the development team to update the catalog.
Since the billing software integrates with your accounting system, the finance team won’t have to put in added hours to ensure all your discounts and promotions are factored into billing and book-keeping cycles.
All of this also means faster time-to-market, which enables your IoT business to stay competitive and generate more revenue.
Need to update your products and subscriptions in bulk? Recurring billing software has your back there, too. Bulk updating can be especially resource-heavy and demanding—potentially requiring your team to go through many, most, or even all accounts individually to make alterations. It’s easy for details to fall through the cracks and cost your business revenue.
With the right recurring billing software, bulk updates can be applied across plans, products, and all relevant subscriptions automatically and in real time.
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3. Supports complex pricing models.
Agile recurring billing software supports a wide variety of flexible pricing models. And these various models can be applied on a customer level for customized subscription offerings.
Many IoT businesses employ a usage-based and/or hybrid pricing model to appeal to the needs of their customers. However, calculating recurring fees along with usage rates can become time-consuming and resource-heavy, especially as a business continues growing its customer base.
It’s also difficult to predict the demand on resources each cycle, and of course, it’s hard to forecast revenue.
Put all this together, and you likely have a billing model too complex to scale without automation.
Usage is a moving target that manual and legacy billing systems struggle to handle, but recurring billing software is built for it. Tracking usage meters, frequencies, and device pauses and restarts for accurate billing becomes a background process. This grants your team freedom to focus on more important things.
4. Simplifies account activation.
Speaking of hybrid billing, many IoT businesses begin customer relationships with one-time device purchases.
The shipping, installment, and device activation processes can slow down billing activation.
Add in complications related to lease or lease-to-own payment plans, grace periods, and prorating mid-month activation, and it’s easy to imagine how new customer relationships can feel bogged down right from the starting line.
Robust recurring billing software handles these situations with ease.
A business can pre-enter serial numbers for devices into its software before they even ship. Once purchased, each device’s serial number can then be linked to a subscription and customer, and billing can start automatically once the device is activated, but not before then (unless desired!).
And because each individual device has its own subscription, that subscription can be adjusted, paused, or cancelled as needed without affecting billing for other devices on a customer’s account.
5. Unifies businesses with manufacturers and resellers.
IoT devices can be used in many ways. For example, a device designed to plug into a vehicle’s computer for tracking GPS, mileage, and gas consumption will inspire innovative developers to find other ways to leverage it, like monitoring safe driving.
As a result, the IoT industry tends to be an IoT-manufacturer-reseller-end user ecosystem. Managing billing in these scenarios can be tricky. No customer wants to receive separate invoices from every party. However, businesses run into a problem bringing everyone together to produce one complete and correct invoice.
The solution? An agile recurring billing platform that pulls data from all parties to consistently and automatically produce accurate invoices.
6. Speeds up fulfillment.
As mentioned, IoT devices are trackable through recurring billing software even before purchase and activation thanks to their unique serial numbers.
Intelligent platforms allow businesses to input new devices from the manufacturer into the system, waiting to be activated upon purchase or installation scan. Then, the correct pricing is assigned to the device and customer, and inventory can be automatically updated to reflect the purchase.
Storing and delivering devices is the boots-on-the-ground work of IoT, not to mention tracking and managing additional hardware for installation, operation, and maintenance.
Robust recurring billing software integrates with leading ERP platforms like NetSuite to streamline inventory management and shipping.
The challenges of IoT billing necessitate seamlessly integrated technology solutions.
7. Provides real-time data.
Having so many moving parts can feel overwhelming, especially if your team must manually check-in every day on the status of each customer and device.
Fortunately, with automated recurring billing platforms, data is updated and available in real-time.
Both customers and businesses benefit from this access to real-time data. IoT businesses can use data on usage and subscriptions trends to inform decisions.
Accessible data for business teams and customers also creates transparency that strengthens the customer relationship. For example, if someone needs to check their usage in the middle of a billing cycle, it shouldn’t be a major drain on resources to provide that.
With connected devices generating huge amounts of IoT data each day, a recurring billing platform that can capture and display it all is simply essential to effective IoT business operations.
8. Manages subscriptions.
From sign-ups to activations, and plan migrations, robust recurring billing software supports comprehensive subscription management.
Multiple—which could mean hundreds or even thousands of customer devices and subscriptions—may be activating, pausing, ending, or upgrading at any given time.
Any change to a subscription often means there are about 26 changes that need to be made downstream in terms of ledger moves and financial changes, according to industry standards.
With robust billing software, these changes are all automated. This means no more surges in manual reactivations at certain times of the year, tying up resources and pulling team members away from focusing on operations. And no more puzzling over invoicing for accounts with multiple devices. The finance team can breathe easy.
Each device has its own subscription and is assigned to a customer. Customers can even be given the power to pause or upgrade their own devices and subscriptions.
9. Recognizes revenue seamlessly.
As any subscription business knows, Generally Accepted Accounting Principles (GAAP) compliance is crucial for recognizing revenue. ASC 606 defines strict rules regarding earned vs. deferred revenue, and an error in reporting could result in legal ramifications.
Manually tracking recurring revenue in IoT is difficult to do accurately and in a timely manner. Recurring billing software automates the process, reducing errors and strain on accounting.
Look for a ledger-based recurring billing platform with a double-entry accounting system that distinguishes sales from revenue. Then, leave worries about revenue recognition behind.
10. Secures payment data.
Everyone from customers to business stakeholders wants to know that financial information is secure. This is why you need a recurring billing platform that meets the highest PCI-compliant billing security standards.
Maintaining compliance doesn’t have to be on a business’s to-do list if it adopts an intelligent recurring billing platform that does the work for it.
Leverage recurring billing software for your IoT business growth
At the end of the day, manual billing isn’t scalable for IoT businesses. A dynamic recurring billing platform automates tasks and simplifies compliance so resources can refocus on more important issues.
Apart from the ten benefits listed above, there are a host of other features like automated dunning management and payment retries that can reduce churn, prevent revenue leakage, and recover business revenue on a regular basis.
With the right fintech automation technologies, data-driven businesses stay competitive. They’re armed with the time and capabilities necessary to face whatever the future brings.