Modern SaaS companies suffer gravely at the hands of outdated legacy processes and systems that are error-prone, unable to scale, and simply aren’t flexible enough to cater to their evolving needs.
It’s no wonder digital transformation has once again become a major trend in SaaS. Or maybe it never stopped being a trend?
Either way, it has become more important than ever for businesses in this space to add efficiency and agility across all their departments to remain competitive—especially departments that touch revenue operations (RevOps).
While RevOps is typically associated with marketing, sales, and customer success, a SaaS business’s billing and finance department is inextricably intertwined with all of them. And for this reason, adding that efficiency and agility to a business’s monetization engine creates impactful change capable of providing immediate value across the entire organization. It even trickles down to the customer.
Subscription billing software is a critical component of any comprehensive SaaS digital transformation. And as businesses all over the world make the upgrade to a better billing solution, their stories provide demonstrable proof of the benefits of truly adaptive subscription billing solutions.
1. Streamlined automation for scalable growth
SaaS businesses need the ability to adapt to rapid growth in real-time. But when subscription accounts need to be processed and invoiced manually, it can overwhelm a billing department and require days—or even longer—to sort out. The resulting time and money exhausted trying to navigate through the mess make it very difficult for businesses to thrive in a growth environment.
2. Agile monetization capabilities for a competitive advantage
SaaS businesses that want to create bespoke offers or package and price their products in unique ways typically find their outdated subscription billing solutions unable to meet their needs. They require more flexibility and greater speed as quick time-to-market is a key competitive advantage.
When it comes to more innovative monetization approaches—like hybrid and usage-based billing for software—legacy systems may be completely incapable of rising to the occasion.
bitHeads offers its customers backend as a service (BaaS), and it uses a complex usage-based pricing model to charge its customers for how much they use its product.
Because usage-based billing requires tracking the data of every single account, it’s nearly impossible to handle manually. This is a significant concern as improper usage tracking can lead to billing inaccuracies and revenue leakage.
Integrating with subscription billing software enabled bitHeads to automate its complex pricing and subscription billing model. Now usage-based customer data is automatically used to bill customers with real-time accuracy based on how they used bitHeads’ BaaS.
Meter-based billing is trending upward in the world of SaaS with 38% of businesses reporting using some form of usage-based billing. As more and more SaaS businesses adopt this approach, the need for an accurate and flexible billing solution will only proliferate.
3. Automated collections and revenue recovery for reduced revenue leakage
Automated billing software can have a meaningful effect on collections assurance.
Advanced collections assurance has been an added benefit for bitHeads when it experiences failed payments. The business has been able to recover 5-10% of its revenue each month in collections alone.
The automated dunning functionality and broader revenue leakage prevention strategies of a modern billing platform can recover a significant amount of revenue. And on average, about 85% of manual dunning outreach attempts aren’t even seen by the intended party.
Consider CoConstruct—a SaaS in the construction space that serves the needs of over 100,000 building professionals. Previously, the business was using an ecommerce function from its CRM to perform its recurring billing. But this solution was creating limitations for the business. The business was also seeing revenue leakage at the hands of an inefficient dunning process and gaps in its ability to accurately apply taxes.
By switching to a comprehensive subscription billing software, CoConstruct has enhanced its collections and taxation processes to recover around $2,000 a month.
Effective dunning isn’t just an issue in the construction space.
Every month, 12% of all credit cards will fail. And only 15% of the outstanding charges that follow from that will be recovered.
4. Access to granular, real-time data for better financial transparency
Businesses that upgrade to automated billing platforms gain easy access to granular financial data that translates into better financial transparency. So not only does this digital transformation enhance agility and operational efficiency, but it also provides crucial information for informed business strategy and decision making.
This was certainly the experience of EnVue Telematics, a business that provides its customers with industry-leading telematics technology used in fleet management.
As EnVue scaled, its billing process became complicated. Reporting took weeks and it lacked the level of real-time transparency and accuracy the business needed.
Since switching to subscription billing software, EnVue has seen a significant transformation. Not only has its time spent on billing been cut in half, but it has been able to break down and differentiate its revenue in ways it was never able to before.
EnVue’s team members now have real-time insight into customer activity, subscription status, sales effectiveness, and overall growth patterns. This enhanced data transparency has led to enhanced budgeting and forecasting as well as improved overall efficiency.
About 95% of businesses cite unstructured data as a hindrance to growth.
Subscription billing platforms provide a granular focused look at data that matters.
5. Efficient and accurate processes for improved customer experience
Customer experience is often the difference between retention and churn. One in three consumers will leave a brand after one bad experience. That number jumps all the way to 92% after two or three bad experiences.
Subscription billing software enhances the customer experience by eliminating billing errors, diversifying the ways customers can make payments, and streamlining the collections process for everyone involved.
The Covenant Group—a subscription-based coaching service—was old school in its approach to billing, sending clients invoices and receiving payments in the form of faxes.
Naturally, the process was slow and error-prone. Collections often took up to six months, and weeks could pass before anyone noticed a late or failed payment.
Since The Covenant Group made the switch to subscription billing software, its customers have enjoyed an enhanced experience. They’re now automatically billed for their subscriptions and they can start their coaching journey without delay. They also have greater real-time autonomy to manage their accounts with self-service functionality, and they have increased communication with the business.
As for The Covenant Group, its recurring collections process is more reliable, and it has been able to leave faxes as a thing of the past.
SaaS companies looking to maximize their customer experience and stabilize their MRR will be hard-pressed to find a simpler or more immediate solution than an adaptive subscription billing platform.
Subscription billing software accelerates SaaS success
Subscription billing software creates changes and yields benefits that can transcend into all aspects of a SaaS business.
A digital transformation to agile business monetization not only improves scalability, flexibility, and recurring revenue predictability, but it also informs business strategy and aids in customer success.
For SaaS businesses that want to minimize inefficiency and churn and maximize their growth potential while streamlining processes organization-wide, an upgrade to robust subscription billing software is a vital step on the upward path.
