What is recurring billing and how can it improve your business?

25 April 2022- 13 min read

Saas billing software Subscription platform recurring billing

As more and more companies shift their business towards recurring billing, you may be sitting thinking: what is it exactly, and is it worth the fuss?

It is currently projected that the global subscription and recurring billing market size will double by 2026. The ongoing COVID-19 pandemic has only accelerated this growth as customer behavior changed and vendors had to adjust.

In short, recurring billing is a win-win for both customers and companies because customers get a continuous service while companies get a revenue stream. But let us start from the beginning.

Recurring billing

What is recurring billing?


As the name indicates, recurring billing means repeated payments. It is an ongoing periodic payment for a service or product. Recurring billing enables vendors to charge customers at predefined intervals: weekly, monthly, annually, or otherwise.


Recurring payments are commonly met in the subscription business, and this could be anything from B2C companies such as Netflix or Goodiebox to B2B companies such as HubSpot. When subscribing, customers provide their payment data and permit vendors to automatically deduct a certain amount of money on an agreed time in exchange for goods or services.

Recurring billing is a lucrative business solution for companies because it rewards them with predictable revenue, giving them more peace of mind and foreseeable growth. At the same time, customers do not need to worry about making sure to pay another bill or purchase a needed product - it is all taken care of automatically.

Let us dive deeper into how recurring billing can improve your business.

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What can recurring billing do for your business?


In essence, recurring billing fosters an ongoing relationship between a customer and a vendor rather than a single purchase. It is a subscription business model that deepens customer relationships and even helps with customer retention.


Companies also go with recurring billing because:

  • Repeated payments mean expected ARR (Annual Recurring Revenue), bringing more security and predictability when making future plans and strategies.
  • They want to scale, which is essential to survive in the increasingly competitive market. Having recurring revenue enables companies to manage growth better and scale accordingly.
  • They seek to offer different products and pricing models to remain relevant and attractive to customers.
  • They need to offer different payment options to customers. This is especially crucial if you are running an international business and need to accept payments from other countries and in foreign currencies.


So far, it looks like recurring billing for your business is a great idea. After all, how hard can it be? Customer chooses a pricing plan, gives you their payment details, and you charge them once a month.

But what if you have multiple products, multiple pricing plans, paid during different periods, using various payment methods? And what about dunning? Let us take a look at some of the recurring billing challenges.

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The most common recurring billing challenges


If you are considering transitioning to recurring billing and subscription management, there are a few important things to consider:

  • Customers want flexibility and a smooth shopping experience, including different pricing options and payment methods. Customers should also be able to switch between different plans with no hassle.
  • Customer data. While it can provide you with helpful insights to benefit your business, you also need to make sure to be compliant with various international regulations.
  • Invoicing. The right person, the right amount, the correct currency, and it all needs to work seamlessly to retain agility.
  • Subscription management and customer communication. You need to welcome new subscribers, communicate to them when a payment fails, or other issues arise, etc.


The list goes on. Under the hood of recurring billing hides many moving elements that you need to sort out and be aware of right from the start. Luckily, even the biggest recurring billing challenges will not be so scary if you have the right tools in place.


Why you should consider a dedicated recurring billing platform


Predictable revenue helps solve a lot of common business headaches. But it can only work to your benefit if you have established a reliable recurring billing machine. 

When it comes to setting up a recurring billing system, there are 3 ways you can go: 

  • Choose some traditional accounting software.
  • Build your own subscription engine.
  • Pick a dedicated recurring billing and subscription management platform, such as Upodi.


What accounting software does well is - no surprise here - accounting. But what about subscription management, customer communication, and data concerns, among many other aspects of recurring billing?

A DIY solution to manage your subscriptions and recurring billing also sounds good until you realize how many resources it requires: financial and human. On top of that, you will need to make sure your system integrates with your ERP system and is compliant with GDPR or PCI.

Meanwhile, the power of a dedicated recurring billing and subscription management platform hides under the word “dedicated.” Because its sole purpose is to cover any recurring billing obstacles you might have, be it automated invoicing, subscription management, or payment options. Your job then is to focus on polishing your offering and maximizing profits.

If you are ready to make your pick, we got some tips and tricks:

6 tips for choosing a subscription billing platform


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Mette N. Mortensen

Mette N. Mortensen

Mette N. Mortensen is a student employee with a thirst for Marketing. She is driven by her passion, and takes pride in providing the best results possible. As a Marketing Manager, her goals include providing relevant and exciting content, innovative solutions, and provide value to both company and customers. In addition to working at Upodi, Mette is taking her Master degree in Strategic Communication at Aarhus BSS.