How to Find the Right Subscription Billing Solution

Many times I’ve worked with high technology (often “start-up”) companies that are looking for a way to successfully implement a Subscription Billing System (a.k.a. recurring billing).

They are either seeking a new solution that does subscription billing, or they may already have an application which calculates the billing amounts but doesn’t provide the normal accounting functions. In either case, they cannot scale their business when burdened by manual processes and disconnected systems.

A Typical High-Tech Business Scenario

Usually, a company seeking a Subscription Billing System provides a variety of products and services which have one or more of the following as a basis for revenue generation:

  • SaaS (Software as a Service, sometimes referred to as Cloud Computing)
  • Web-based lead generation or advertising
  • Usage-based billing
  • Annual maintenance agreements – software and/or hardware
  • Subscription-based services

In order to meet the typical needs of a this type of company you may be using industry-specific, line-of-business (LOB) software, or a series of spreadsheets for billing and tracking revenue. Recognizing this revenue, collecting receivables and tracking financial information are often manual processes without sufficient audit trails or data validation.

You may have chosen to use QuickBooks™ or a similar product that only meets basic accounting needs, and manual entries are still required. Does this sound familiar to you? What if you could get rid of the “limp-along process” for efficiency and accuracy?

Meeting Your Subscription Billing Needs

Over the years, my team and I have successfully used out-of-the-box ERP (Enterprise Resource Planning) systems to address 7 primary needs for these types of clients.

Here are some recommendations to address those needs:

  1. Agility – Use the out-of-the-box functionality of a strong, flexible ERP system for 80-90% of the functionality you need. Then, make sure you have the right tools to customize the solution to meet your unique business needs for the additional 10-20%.
  2. End-to-End Processing – Integrate your billing information directly into your ERP system as sales transactions to leverage the normal accounting functions and reporting tools it provides.
  3. Line of Business (LOB) Applications – If you have an LOB application, don’t be quick to discard it. Rather, see first if you can use integration tools to build one-way or bidirectional integrations so you don’t lose the competitive advantage it provides you.
  4. Revenue Recognition – With your billing data readily available you can manage your revenue recognition rules within your ERP system and have accurate business reporting and audit trails.
  5. Royalty Tracking – many ERP solutions offer royalty calculations based upon sales transactions.
  6. Consolidated Information – Once your billing data is integrated into your ERP solution leverage its built-in reporting tools.
  7. Cost – Think about initial costs versus total cost of ownership. We’ve discovered that separate solutions which seem inexpensive to implement initially may actually cost more over time.

To discover the 8 Key Elements of a Successful Subscription Billing System download my whitepaper.

An Engineered Approach to a Fully Integrated Solution

Our experience has shown that a strong, flexible, mid-market financial management (or ERP) solution needs to be the foundation. This piece will not only provide strong accounting functions like invoicing, collections, and financial reporting, but will also have the ability to do recurring billings, credit card processing and deferred revenue. You want to make sure that what you choose comes with a suite of powerful tools for reporting, integrating, and enhancing the out-of-the-box system.

The right solution is out there; don’t settle for less. The right solution will boost your competitive advantage, provide scalability to your business, and provide the business insight you need to make better decisions.

Learn the 8 Key Elements of a Successful Subscription Billing System by downloading my whitepaper.

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