We tout the billing automation platform as a tool that enables SaaS businesses to scale. Having a single tool automate your subscription billing frees up countless hours for your team to work more strategically, of course.
However, some SaaS billing systems are actually full-scale subscription management platforms. These offer plenty of additional perks—aka extra ROI that isn't strictly recurring billing-related.
One example I want to dive into is the wealth of data your subscription management platform manages on a daily basis.
Captured and used properly, the data inside your SaaS billing software enables your internal teams to make better decisions in all areas of the business. This includes:
- product development,
- compliance, and more.
When it comes to competing in the SaaS space, data is everything. Leveraging it can be a game-changer for winning against competitors and growing in your space.
Here's how you can use just a handful of subscription management reporting features to strategically scale your business.
1. Calendar reports for sales forecasting
"[A]chieving forecast accuracy is notoriously difficult. It’ll take a combination of the right revenue forecasting methods, sales processes, and data tools to understand where your business is headed," Brad Rosen, President and Head of Revenue Operations at Sales Assembly writes.
Regardless of how large or small your business is, having your finger on the pulse of your projected invoicing is an important component of strategic planning and sales forecasting.
Certainly, one of the perks of the recurring billing model is predictable recurring payments. Your subscription billing system can render calendar reports detailing how much incoming revenue is projected on any given day.
Search backward in time to view historical information, or go forward to view the number of projected outgoing invoices for any future time period.
2. Sales reports for product development
An important part of developing a SaaS product roadmap is knowing what your customers need.
Certainly, your customer success reps should play a big role in identifying exactly what that is, proactively communicating with existing customers. However, the sales reports in your SaaS billing software can also give you additional insight.
Sales reports visually break down which products and plans are selling well—and which aren't quite so popular.
This data informs SaaS business leaders which features they should prioritize for enhancements and which products or plans could be reconfigured or cut from their catalogs completely.
3. Customer reports for refining marketing messaging
Data is a must-have in today's marketing world, especially in an industry as competitive as SaaS. Your subscription management system is one of the tools that aid in building your ideal customer persona (ICP).
“I view data as fundamental to marketing. It has a horizontal impact across the organization, cutting across media, advertising, innovation, and everything else," Tom Benton, CEO of the Data and Marketing Association tells Forbes.
One of the most important foundations of effective marketing is knowing who your customers are. Your SaaS billing software can provide revenue by customer reports with a visual breakdown that shows you who your biggest-spending or best-fit customers are.
From there, your marketing team can infer any additional points around firmographics—number of employees, staff members, ARR—to identify similar prospects who would benefit from your product.
4. Monthly recurring revenue (MRR) reports for customer retention
If there's one thing leaders of SaaS companies the world over can agree on, it's that they love their MRR reports. It certainly is one of the most important SaaS metrics and KPIs to keep an eye on.
As new customers sign up and old ones churn, your MRR will constantly move up or down—and there are important, strategic insights you can glean from these trends.
Clearly, something is wrong if you see prolonged, high volumes of contraction MRR and churn. Perhaps there's a common bug or a recent feature release some customers weren't fans of.
If you see too much downward movement in your subscription management system, your customer success team can leverage its customer relationships to find out exactly what's driving them away. Then, your other internal teams can respond accordingly.
5. AR aging reports to stay on top of unpaid invoices
Customers may default on payment for any number of reasons. Regardless of the reason for failed payments, your business still has to get paid.
A SaaS billing system creates accounts receivable (AR) aging reports. These provide the technological support a business needs to make sure no unpaid invoices slip through the cracks. As a business leader, this report also gives you visibility into whether your billing clerks are doing everything they can to maximize collections assurance.
The AR aging report allows for a high-level overview of overdue invoices, color-coded according to the likelihood of receiving payment. It also allows you to drill down and get a more granular view of dollars and customers outstanding.
The report enables you to see:
- which customers have outstanding payments,
- how many overdue invoices each customer has, and
- the total dollar amount each overdue customer owes.
Your billing clerks can also add notes to each customer in this view, keeping everyone in the loop around communication attempts and collections status.
6. Revenue report for revenue recognition compliance
Keeping an eye on your earned vs. deferred revenue is more about staying in business than it is about attracting new business or expanding existing customers' subscriptions.
However, the larger your SaaS business scales, the more important it is that you accurately follow GAAP's ASC606 revenue recognition principle—and the bigger the consequences if you don't.
Your SaaS billing software automatically recognizes revenue. However, the earned vs. deferred revenue reports it creates are also extremely handy when it comes to calculating the taxes your business pays at the end of any given reporting period.
When you close your books at year-end, it's important to know how much of your revenue has already been earned compared to the amount that is still counted as a liability. For example, if you close a $1M annual deal right before year-end, you don't want to pay taxes on such a large sum of money when the majority of your services are yet unrendered.
SaaS billing insights help you grow faster than your competitors.
"If we’re honest, there are probably 19 other companies in your category just like yours (with feature parity, the same value proposition, similar pricing, etc.)," writes Lincoln Murphy of Sixteen Ventures.
In an industry this crowded, standing out and continuing to wow your customers with every interaction is the only way to win out over the vast array of competing subscription businesses.
Murphy continues: "[W]hy would your customer choose you when there are 19 other options out there? And just as important…why would they stay with you?"
If you have the right data available and you know how to action it, the answer is simple: you know what your customers want without having to ask them.
Your SaaS subscription management platform is an incredibly valuable tool for so much more than simple recurring billing. It can help you establish product direction and customer messaging, and make sure you're handling revenue wisely. Its insights can aid not only in new customer acquisition but also in customer retention.
Regardless of how many products on the market are just like yours, using the right data from your billing solution allows your SaaS business to outperform them every time.