The subscription model has gained immense popularity across all markets over the last decade. Choosing the right subscription billing tools for your business is vital, whether launching a new e-commerce project or upgrading your current business model.
These tools integrate closely with subscription management, which automates payments at set intervals, ensuring a near-guaranteed income.
Transparent transactions help gain customers’ trust, leading to a better customer experience. From the customer’s perspective, it’s a convenient option where they subscribe to auto-pay, which captures their payment information and authorizes vendors to charge them. As a result, customers know what they are paying for, at what time, and for what reason.
Why do Businesses Need Subscription Billing Tools?
The old-fashioned back office no longer suffices with today’s complex business models. It is now imperative for businesses to provide flexible and personalized pricing, billing, and monetization options. The need for subscription billing software is also evolving along with a new set of billing models and systems.
A business’ billing software is the hub that performs multiple functionalities such as subscription management, invoicing, billing, accounting, analytics, online payment processing, and fraud management.
How Can Subscription Billing Software Help Businesses?
A robust system to care for your subscribers and their preferences throughout the customer’s lifecycle is a must. One such system is subscription billing management software. It collects product catalogs, prices, and subscribers’ data, such as subscriptions, add-ons, transaction histories, and billing cycles.
Also included are managing trial subscriptions, exemptions in the event of a price change, upgrade and downgrade options, and cancellations throughout the life of the subscription. It can impact businesses’ entire revenue operation, from revenue recognition to revenue recognition.
Being one of the modern billing strategies, it involves timely, efficient, and accurate ongoing payments for a product or service. But how can it benefit your business? Let’s find out:
1.Helps Ensure Revenue Recovery
In manual billing, there’s always a chance of losing revenue through mistakes such as forgetfulness and typing errors. Incorporating subscription billing software will eliminate the likelihood of these errors.
Intelligent payment solutions can help businesses recover lost revenue due to card expiration. It will keep track of renewal and payment dates and send out regular reminders to keep your clients in the loop.
2.Helps Create Promotions to Entice Customers
Out of many billing models available today, from quantity-based and recurring to usage-based, determining which one best meets your needs depends on many factors, from the target audience to the monetization strategy.
Opting for a subscription management platform that offers maximum flexibility by integrating all standard models is the right choice.
It’s easy to acquire some subscribers by simply offering the right plan, but it takes more work to convert others. Promotions can play a crucial role here. Offering a promotion can entice subscribers who are on the fence to take the plunge.
Consider a subscription management platform that offers gift cards, coupon codes, and free trials.
3.Reduces Workload
Subscription businesses bill their customers every month. Without a proper subscription management platform, your finance and accounting departments may have to work a lot over time.
Subscription systems with pre-built accounting and tax integrations will eliminate manual workarounds and minimize the possibility of errors.
Another good reason to have software that automates the quote-to-cash process is that it enables the sales and accounting departments to work together more effectively.
4.Reduces Involuntary Churn
Without tools to combat failed payments, your business will lose much revenue. More than half of subscriber churn results from failed transactions.
A top-notch subscription management platform is necessary to deal with failed payments. Additionally, this platform offers many tools to minimize churn, including account updating functionality and machine learning-driven retries.
A lot goes into revenue recovery, but it could yield massive returns.
5.Improves Data Accessibility and Transparency
Is your sales data incomplete or inaccurate? Has your subscription data been duplicated by mistake? A subscription management solution resolves these data issues through a centralization process that makes access to accurate and up-to-date data possible.
You will no longer need to check different sources for the most precise and authoritative data because the AI-powered system will do everything for you.
In addition to standardizing the data fields, it also ensures that everyone is on the same page with the same data.
6.Helps Make Informed Decisions
Over the last decade, data-driven decision-making (DDDM) has become a buzzword in business. DDDM requires interpretative and analytical skills to gain insight into overall business performance.
Subscription software that manages subscriptions provides powerful tools for contextualizing the data points and giving easy-to-understand reports. With these insights, you can make confident, data-driven decisions in your business’s best interest.
In addition to helping you make realistic, informed resource management choices, DDDM can accurately predict your business’s future sales and scale your business strategically.
7.Improves Customer Experience
Real-time analytics can benefit your entire business in several ways, including improved customer experience.
In addition to contact information and subscription history, the customer support team can quickly gather all relevant information in case a customer approaches support. It includes account details, past and future invoices, and other useful customer information. The customer won’t have to answer dozens of questions to get their main concern addressed, and it shows them that they are valued.
Additionally, the automation reduces billing errors caused by manual data entry, resulting in happier customers, lower churn rates, and more excellent lifetime value for each customer.
8.Helps Scale Business
Managing the growth of your business requires a careful analysis of current performance, a comparison with recent months, and a realistic forecast of future performance. Subscription management provides all these details and insights that help you scale, such as:
- Calendar reports can help forecast sales
- A sales report can inform product development and pricing decision
- Customer reports can help refine your marketing campaigns
- Create customer retention plans using MRR reports
- Track and manage unpaid invoices using AR aging reports
Final Thoughts
A comprehensive full-scale subscription billing management solution provides real-time analytics along with accurate and up-to-date data. It enables businesses to gain a competitive edge by making better and more informed decisions. It simplifies the billing process and helps process recurring payments automatically, which guarantees steady cash flow. Moreover, it appeals to customers for being a quick and convenient option.
