Most software vendors—whether a startup or a fast-growing small to mid-sized business—already have a great CRM in place. But they don’t always have a great solution to turn those prospects into active customers in their business systems so they can start to drive consistent cash flow.
In fact, it’s easy to get excited by the ramp-up in sales, only to have the company scramble to play catchup to keep up with the influx of customers. Not a bad problem to have—at least initially—but without a plan to efficiently move new customers into your back-office billing systems, you can’t expect to be successful in the long run.
At the end of the day, operations will rapidly become more complex (and more manual) than they need to. That’s where the choice of an integrated billing platform for software companies like NetSuite SuiteBilling becomes critical to on-time payments, subscription renewals, revenue compliance, and customer retention.
Common SaaS Company Billing Challenges
SaaS companies face many challenges in billing.
They have multiple pricing tiers.
Common billing requirements include:
- A one-time fee for upfront cost/setup
- Recurring monthly fees, such as a licensing fee
- Usage fees based on a number of software users, or tiered billing, which must be able to be scaled up or down as needed
Tracking renewals feels like a maze.
How can the company retain visibility, staying on top of which client needs to renew and when if you’re working in multiple systems? This becomes especially difficult when sales teams sell multiple subscription plans—some subscriptions may be set at a year, while others could go for two or three, all with different rates.
Excel spreadsheets are inefficient.
As a business grows, inputting and tracking each transaction in a spreadsheet becomes prohibitively time-consuming and overwhelming and prone to human error.
QuickBooks is not equipped for the complexities of SaaS billing.
Growing software companies often use a combination of Excel and QuickBooks. But sudden and steep growth rates coupled with an increased volume of transactions can make scaling the back office a big challenge. What’s more, making changes to a client’s subscription becomes more difficult as the company grows, resulting in more workarounds and inconsistencies in billing practices from customer to customer.
It’s nearly impossible to catch customer churn.
When you’re managing billing through a combination of QuickBooks and Excel, the chances you’ll catch client turnover before it happens decreases as the volume of sales increases.
The result of these challenges: missed payments, stunted cash flow, lost revenue, and dropped customers.
NetSuite’s SuiteBilling Module
SuiteBilling is a module within NetSuite. To use it, you must already have NetSuite. It is designed for SaaS software companies and allows you to manage the entire subscription lifecycle—from launch to renewals.
Features include the following.
Manage any type of subscription, from evergreen to time-based—and take advantage of automatic renewals.
Multiple pricing models
The solution accommodates flat, tiered and consumption-based options, along with promotions, volume discounts and customer-specific rates for maximum flexibility. You can also add standard pricing that a partner such as Sikich can integrate with your sales software like Salesforce to be easily communicated with your team to ensure that sales is selling finance-approved services and bringing consistency to your lead-to-order and reporting processes.
Multiple charge types
The rating engine in SuiteBilling allows you to capture one-time, recurring and usage-based charges on a single invoice.
SuiteBilling allows you to schedule future- and back-dated invoices, as well as invoices when you need them. SuiteBilling will automatically bill your subscribers at the end of a free trial or increase rates when discounts expire.
Software companies that use SuiteBilling can also easily make changes such as upselling a customer, terminating a subscription or even down selling.
Get access to key data, such as monthly recurring revenue, contract value, pricing data, customer churn and more to optimize profitability. Gain insight into what’s coming, as well, to act before issues occur.
The solution brings billing and revenue management together to ensure that software companies are complying with revenue recognition accounting standards.
What makes SuiteBilling a sort of “billing on steroids” is the possibility for customizations. With NetSuite, you can do 80% of what any company needs out-of-the-box; the other 20% is only limited to your imagination with the use of customization tools such as custom fields, scripting and workflows to architect NetSuite to meet your unique company needs that positions SuiteBilling as a key driver of your business success.
Embracing a solution such as SuiteBilling results in many bottom-line benefits for a software company, including:
- Improved cash flow
- Greater customer retention
- Revenue compliance
Partner with an expert that understands your business. Before you move forward, make sure to:
- Think through everything you want to sell, and how you want to sell them. For example, will you do a one-time charge and then a monthly recurring charge? Will billing be based on usage? And how do all of your plans work together? Figure this out before implementation so that your system is set up correctly from the start.
- Communicate with sales. Standardize your subscription plans (let’s say you set up eight) and communicate those to your sales team so that they don’t go off and create a ninth plan without approval from the back office.
- Bring your users along with you in the process so they are in the loop from start to finish. That way, when Monday rolls around, they’re not surprised.
- Train your Superusers to provide additional support after going live.
- Integrate SuiteBilling with Salesforce or your choice of CRM. Sikich can help you connect your front-end sales systems with your back-end business systems to ensure a smooth turnover from your sales team to your finance teams.
If you’re outgrowing your current accounting software, such as QuickBooks or you’re already using NetSuite and need to optimize your billing engine with the best billing software, contact us today.