If you're outgrowing your current billing setup, or if you simply want to take your billing process to the next level, it's important to understand the key features you should be looking for in a next generation billing system. Many legacy systems on the market today just can't support the myriad of common billing challenges that modern SaaS companies are facing. A best-in-class billing system must have several capabilities to ensure streamlined billing, accurate reporting, and timely book closing. Here are the 7 must-have capabilities in a modern SaaS billing system:
1. Easily integrates with your existing tech stack
Your billing solution needs to seamlessly integrate with your existing tech stack with almost zero developer dependencies and workarounds. It should include the full range of APIs—such as self-serve sign up, account management, and provisioning—so you can customize functionalities on the backend to support unique customer use cases. In addition, your billing solution should provide webhooks to send lifecycle event notifications to your product or service. Further, access to complete audit trails and logs enables you to keep track of any changes in the system over time.
2. High degree of automation
With subscription billing automation, tedious, manual processes—including invoicing, dunning, payment collection, tax calculation, and journal entry creation—are dramatically reduced. In addition, an automated billing system can give guardrails and create governance around what packages and pricing models can and can’t be sold, which enables compliance with accounting standards and regulations like ASC 606, GAAP, and more. Your finance department will see a return on its investment from time savings alone, enabling them to reallocate the resources spent on billing to other strategic areas of focus.
3. Built-in, out of the box analytics and reporting
A dynamic billing platform provides a wide variety of analytics and reports to monitor bookings, renewals, invoices, failed payments, approval workflows, and more, from a single, centralized point of control. This simplified bird’s eye view provides full data visibility and key metrics like ACV, ARR, TCV, upsell, churn, and NDR to help your financial executives make informed business decisions and improve financial forecasting.
4. Consolidated and accurate invoicing
Your billing system should automatically sync invoice information to your accounting software and tax and payment processing tools, giving you peace of mind that the correct details and tax information are captured and added to every invoice. A flexible billing solution also enables invoice customization with your brand’s identity and applies credit memos, write off, or void an invoice. Additionally, you can save time by consolidating all the purchases in a single invoice or collect payment with a single run.
5. Flexible subscription management
A billing solution with flexible subscription management lets you easily create, amend, cancel, or renew a subscription, or multiple subscriptions, within a single account. With full visibility into the subscription lifecycle, you can automate and manage upgrade or downgrade billing adjustments and subscription renewals.
6. Support for modern pricing & complex deal structures
Modern, enterprise-grade billing solutions are designed to handle billing complexity, especially deals that change and evolve based on customer needs. Your billing system should support the full spectrum of prices and deals, from recurring to usage-based, percent of total, and ramp deals. Discounts should be flexible and can be applied at the ramp, line, or order level. Whether you’re a global business or plan to expand globally, a modern billing solution enables you to sell in multiple currencies and accept payments with credit card, ACH, wire transfer, check, and more.
7. A single source of truth
Your billing software should seamlessly integrate with your existing tech stack, automatically sync up this information accurately, and become a single source of truth for all of your subscription data. As a result, quotes and orders should be identical in your billing solution, and the product catalog is uniform from quote to revenue, ensuring metrics are consistent and reliable.
This blog post is an excerpt from our eBook "The Subscription Billing Buyer's Guide for SaaS." To read more, download the full guide here.