How SaaS companies can handle complex billing

02 August 2022- 12 min read

Saas billing software Subscription platform recurring billing

If you run a software company yourself, you already know that the SaaS business model, for all its benefits, comes with its own challenges. With a few recurring revenue streams and varied pricing, billing management can quickly become a burden. Manage increasing billing complexity with success by following a few billing best practices.

What adds to billing complexity

As you diversify revenue streams and your business grows, so does the complexity of billing — the number of subscriptions and the volume of transactions increases, costing you extra time and resources. Combine different subscription plans, products, currencies, billing cycles, add-ons, or coupons, and you have an entanglement of subscriptions that can make anybody sweat.

To attract and retain customers, you need to provide them with flexibility. Your customers should be free to change their subscription plans and pick billing options. Sure, such flexibility can contribute to complexity, but if you follow a few best practices, you can handle billing easily and keep your customers happy. 

Below you can read more about the best practices for SaaS billing.


Keep your pricing clear and flexible

Your pricing must be simple, straightforward, and logically tied to your product value. Customers should not struggle to decipher what they need to pay and what they will get. Everyone should be able to understand your offerings and connect them with pricing easily. Confusing pricing can lead to frustrated customers, a high churn rate, and an overwhelmed customer service team. 

Regardless of which revenue model you choose for your SaaS business, make sure to sustain pricing flexibility. When you extend the range of products or services and add different pricing, things can quickly get out of hand.

With scalable SaaS billing software, you can support multiple pricing models and experiment with pricing as much as needed without disrupting your day-to-day operations. Regular pricing optimization will help you find the best revenue source and grow your business.

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icon-growthPrevent revenue leakage

Revenue leakage is one of the most troubling parts of handling recurring billing. Providing a service and not getting paid is bad news for any business. You can successfully fight this by ensuring payments go through and maintaining billing-related communications to minimize churn.

You can easily do this by setting up a recurring billing and subscription management software. It can, for example, automatically handle dunning for you by reminding customers of upcoming payments, credit card expiration dates, or overdue bills.

Quickly responding with an appropriate action when payments fail is crucial to preventing revenue leakage. It also contributes to better customer relationships and overall business success. No more revenue slipping through the cracks.


Simplify invoicing

If you still manage invoices manually, you’ve felt the pain from this one. Manual invoicing is anything but simple. You might get away with it when handling a few hundreds of subscribers, but with thousands or more, invoicing can rapidly become a major headache for your accountants.

Complex invoicing leads to delays and errors, robbing you of collecting revenue. The best practice, in this case, is a SaaS billing system that automatically manages the whole invoicing process. Depending on what solution you decide to go with, it can also help you improve your invoicing efforts with company branding.


Simplify billing: leave it to automation

The aspirin for your headache: if there is one thing that can handle complex billing, it is automation. A sound billing automation system will simplify and streamline your billing process by taking care of everything from pricing changes and invoicing to proration and dunning.

Your customers do not like struggling through manual processes any more than you do. Automation can provide a much better customer experience. It also allows you to step aside from tedious billing operations and instead focus on scaling and growing your customer base.


One platform to battle all billing challenges

Tackle all your complex billing challenges in one automated platform. A dedicated SaaS billing management software will give you plenty of time and resources to focus on maximizing profits or venture out into different markets.

With an all-in-one automated billing solution, you can try out different pricing models and growth segments without worrying about breaking the setup. An agile SaaS business relies on methods to improve flexibility and efficiency, which is key to standing out and beating your competition.


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Piper McKenzie

Piper McKenzie

Piper is our Head of Marketing. He is passionate about delivering business growth through media projects and marketing campaigns. Piper joined the team in February 2022.