If you're running a SaaS business, your goal is to increase monthly recurring revenue (MRR) while reducing any costs you incur along the way.
Ironically, however, one business operation that causes revenue leakage for many SaaS companies is the very process that's supposed to bring in revenue: subscription billing.
It's all in the process. Legacy software, spreadsheets, and even homegrown solutions come with many opportunities for leakage. These include manual errors, lack of features, subpar compliance, and more. In fact, employees can have an error rate of between 12%-15% when it comes to manual billing.
Ideally, you use a modern subscription management solution that is simple, automated, and integrated with your NetSuite platform.
What about the native NetSuite subscription billing module?
You probably know that NetSuite has a recurring billing module you can add to your environment at extra cost. Wouldn't that be the best billing management solution for NetSuite integration?
For some businesses, maybe. But if your business
- wants to get up and running quickly,
- needs a more budget-friendly solution, or
- doesn't want to hire a consultant to help its employees use the software
...you may prefer an alternative.
The best solution to automate NetSuite subscription billing
The good news is there's no shortage of subscription billing platforms that work well with NetSuite. However, with so many options to choose from, you may find yourself suffering from a bit of analysis paralysis.
Different subscription billing solutions have different strengths and weaknesses. Below are five non-negotiable features that should be included when you're looking for the best billing platform to integrate with NetSuite.
1. Natively integrates with NetSuite
Sure, this may sound like a no-brainer, but hear me out.
A recurring billing solution with a native, seamless NetSuite integration is preferable to using an API to connect the two platforms. It's less work for your development team and results in deeper integration.
In a similar vein, be aware that not all subscription billing platform options will have the same quality of native NetSuite integrations. Some may be more robust than others.
You'll also want to look for a subscription billing platform that was built on a general ledger (GL) system. This strengthens the connection between your billing software and your ERP, since both systems speak the same language.
2. Automates more than just the billing process
Sure, creating and sending subscription invoices is extremely time-consuming. However, it's not the only financial process your software can take off your plate.
- An automated revenue recognition module ensures ASC606-compliant subscription revenue reporting in a fraction of the time a manual-heavy process might demand.
- Collections assurance such as dunning communications, failed transaction retries, and credit card auto-updating help you ensure a healthy cash flow and reduce involuntary churn, extending the subscription lifecycle.
- Invoice proration is a huge pain to do manually. If your customer's new subscription doesn't line up with your regular billing dates, your billing system should ensure you're charging the correct amount of money for any partial billing periods.
- Automatic financial data reporting capabilities produce up-to-the-minute reports on revenue management that senior leadership can use in strategy and planning sessions.
Seamless automation of recurring invoices is undoubtedly a time-saver. But being able to automate adjacent accounting processes is a real game-changer. Seventy-two percent of workers believe that with automation taking repetitive tasks off their plate, they could spend one day or more each week focusing on high-level work that is more valuable to their business.
How's that for a growth enabler?
3. Prioritizes ease-of-use
The more feature-rich a platform is, the harder it is to use, right?
Often, yes—68% of U.S. employees face at least one challenge with their work software. But there's no rule stating there needs to be such a trade-off.
Some of the folks on your subscription billing team may not be very tech-savvy, and that's fine. It's not a requirement of their job.
Or, at least it shouldn't be.
Your subscription billing platform shouldn't be so unintuitive to use that your billing clerks are:
- frequently asking developers for help
- dreading using it as a tool to do their jobs.
NetSuite's native subscription billing module isn't particularly well-known for its ease of use. And hard-to-use software can cost businesses a pretty penny.
"Every company has it: the trendy new software that was supposed to make your life easier but everyone stopped using after the first couple months," software writer Lauren Pope explains for 15Five. "Don’t think it happens? It does. According to data sourced for the launch of G2Track, unused software costs businesses $40 billion in overspend every year."
Instead, your team may prefer an integrated solution that sits somewhere between robust capabilities and user-friendliness.
4. Has a flexible catalog
A flexible catalog is a must-have when it comes to finding a recurring billing system. Robust catalog flexibility allows you to:
- test out multiple pricing models,
- make permanent or temporary price adjustments,
- adjust customers' billing frequency,
- offer flexible contract start dates,
- offer customer-specific pricing, and
- invoice for subscription-related usage charges.
Not only does this make things easier for your billing team should pricing change or a new product be added, it also allows sales and marketing to get creative with presenting your offerings to the customer.
Offering things like customer-specific pricing and usage-based billing also creates a better customer experience, decreasing the likelihood of high customer churn.
5. Is a cost-effective addition to the NetSuite platform
The perfect recurring billing solution for NetSuite integration is a tall order to fill. Ideally, you're getting plenty of in-depth features at a price point that doesn't break the bank.
While NetSuite's own subscription billing module isn't known for being cost-effective, plenty of integrated alternatives on the market are. When you're able to maximize the cost-to-value ratio of your billing solution, you free up budget for other complementary pieces of software. For example, you can enhance your billing process with tax software or a merchant of record system.
The right subscription billing solution is a game-changer
Processing recurring billing is one of—if not the—most important processes a subscription business handles. Of course, you want to make sure you have the best systems in place to handle it.
When it comes to NetSuite subscription billing, in particular, you'll want a robust solution that helps you scale without breaking the bank. Your billing process should be the last place you're losing money.