While many businesses would not be able to cope without some form of subscription software helping them to run their SaaS or other subscription billing, there are those that do undertake this task. Often they use forms, sheets, databases and spreadsheets to keep on top of their subscriber lists.
While some may feel that they can run a highly successful subscription business this way, there are numerous issues they face. Here is a list of the potential challenges associated with a manual subscription billing system.
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1. Missed Billing Periods
No matter what, it is important that you bill your clients at the same time each period. The only exception to this rule is when it is a national holiday or weekend, although billing on Saturdays is becoming more common nowadays. However, when you are manually creating bills and you have a small team; it is easy to miss these billing periods.
It can become even more complicated if you are charging different subscribers at different times of the month.
Not meeting your deadlines portrays the wrong message to your clients. Firstly, it implies that their payment means nothing to you and you don’t mind it being late. Secondly, it looks unprofessional. It could also concern the client that their subscription has been cancelled and this may increase enquires.
2. Incorrect Invoices
Sometimes customers need to be billed more or less depending on their usage, or if they’ve bought extras during a particular payment period. Checking what the invoice should include can be a long drawn out task, especially if you have a large database of clients.
Incorrect invoicing takes time to resolve and looks unprofessional. You’ll have to identify where the issue occurred, calculate the correct billing amount and then re-issue the invoice. At the same time you might have to pay the client compensation to say sorry and make them happy again.
Alternatively, you could miss out on funds and that could cost your subscription business even more.
Automated billing systems take the manual administration away from you and allow you to focus on building your business. Manual systems can stifle your time and mean you can’t grow your business without taking on more staff. The more staff you have, the higher the costs of your subscriptions services and the more you’ll have to charge.
Another problem is that with a manual system there will be a theoretical level of the number of clients you can have without the quality of service being affected. Once you’ve breached that figure, you’ll find customer satisfaction will steadily decrease and you’ll lose clients. Unhappy clients will tell their friends and family who will avoid your service.
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4. Credit Control
When you have a lot of subscribers and not so many staff, being a manual subscription service can be a real pain. Every invoice you’ve sent out must be checked for payment and then action taken if it has not. This can take a considerable amount of time. Yet having extra staff can be too costly and possibly cost more than just letting the non-payers have access to your system.
An automated system can be programmed so that anyone who has not paid within a certain amount of time can have their access revoked. This can save you money and time while you are happy knowing no-one is stealing from you.
Manual subscription services may be cheaper than software, but the long term ramifications of making a mistake on them can be worth tenfold the cost of software. Therefore, it is always recommended that you look at the software options available when you create a SaaS or other subscription service, to ensure that your business is the best it can be.