TL;DR
- As you navigate the complex task of choosing the best billing solution for your SaaS company, focus on key features that will enhance your operations.
- Your ideal billing software should automate invoicing, offer flexible subscriptions, and help minimize customer churn.
- It's essential to support diverse pricing models and ensure easy integration with your current systems.
- Don't overlook the importance of accommodating different billing cycles, expanding your customer base, and providing targeted services.
- Additionally, safeguarding against fraud, enabling ecosystem integration, and accessing real-time metrics are critical.
- Lastly, compliance with regulatory standards is a must.
- Togai offers usage-based metering and billing, significantly reducing launch time from months to days.
- Togai emerges as a promising solution, promising rapid deployment and a comprehensive set of features to meet your billing needs.
Are you in the SaaS business? This bit of information is for you: End user SaaS spacing is expected to reach $232 billion by 2024. It's time to upgrade your billing system by replacing outdated software with the latest version.
Choosing a new billing software requires a lot of preliminary research. Our blog aims to make this process easy for you. Before heading into the core topics, let’s first explore why you need SaaS billing software.
How a Modern Billing Solution Serves Your SaaS Business
Billing software, of course, is a core component of running modern-day businesses. The software can be labeled the best billing solution only if it fulfills the following criteria:
- Seamless user onboarding
- Billing period initiation
- Usage tracking and reporting
- Dunning automation
- Subscription management
- Payment collection
- Subscription and churn management.
However, finding the proper billing software for SaaS businesses can be a cumbersome process due to the following reasons:
- Customer churn
- Extensive R&D to create a pricing strategy for SaaS products.
- Compliance challenges like CCPA and GDPR.
- Compliance with tax and accounting standards.
SaaS businesses need the kind of billing solution that is capable of:
- Handling a large customer base.
- Offering complex pricing models
- Refining billing processes with accuracy.
So, how will you know if your SaaS billing software is the right fit for your business? Picking one from a plethora of choices is not an easy task. However, the following guidelines will help narrow down your options and pick the right one to power your business.
12 Criteria for Selecting the Best Billing Solution For Your SaaS Business
Step 1: Simplified and automated invoicing
Your top priority should always be the experience of your customers. There are several ways to gain your customers’ attention and trust with an invoice. Here’s how:
- Clear, concise, and lucid invoicing so all customers can read and understand it.
- Fair pricing and payment system.
Billing and invoicing should work with synchronization. Your billing solution must automate recurring invoices and sync data from accounting systems. Your billing software should offer flexibility to ease up your recurring invoicing.
Look for:
- Invoice customizations with automated billing and invoicing for your brand.
- Invoice consolidation to unify all purchases under a single invoice.
- Advanced invoicing for customers who specifically request the same to plan their future finances.
Step 2: Flexible subscription options
As far as flexibility is concerned, your billing solution should allow you to:
- Design, manage, revive, or cancel multiple or single subscriptions tied to one account.
- Thoroughly examine the various stages involved in the life cycle of a subscription.
- Modify your billing adjustments and subscription renewals by upgrading or downgrading your plan.
Step 3: Minimize churn rate reduction
Your churn rate lets you track the number of customers who opt for another company that offers the same service as yours. Customer churn can hurt your business, so you need to keep an eye on minimizing it. Look for a billing system that finds the right balance between customer benefits and service costs. It will keep your customers happy and keep them loyal to your brand.
Step 4: Support for multiple pricing models and methods
Suppose you want to beat your competition and race ahead of the game. In that case, you must entice your customers with an attractive mix of monthly recurring options, usage-based models, annual subscription contracts, or recurring options. Additionally, ensure your billing platform of choice supports multiple payment methods and currencies to enable easier payment completion.
Step 5: Compare with other billing solutions
Use your requirements list to compare the features offered by various platforms. Pay close attention to the payment methods provided and if the software can be easily integrated with your accounting platforms.
Don’t stop there. Read customer reviews using the platform to understand the software’s capabilities and other details that may aid your selection process.
Also Read: Comparing The Billing Solutions: Togai, Chargebee, and Zuora
Step 6: Support for multiple subscription billing terms
Recent changes in the billing industry reveal that the traditional setup of monthly, quarterly, and yearly billing cycles is no longer effective. The need of the hour is a tailored billing cycle that meets the needs of each customer. This means that different contracts will require different billing cycles. To accommodate this growing complexity, it's important to use a billing system that can adapt to these changes.
Step 7: Support for a broader customer base
If you want to expand your customer base and reduce the cost of entry to your services, consider using modern billing technology. By offering smaller service increments, you can attract new customers more quickly and reach markets that were previously out of reach due to high investment costs. With the right billing system, you can even bring back dormant customers and broaden your user base. Choose simple, direct language and organize your message logically to make it easy for your audience to understand.
Step 8: Targeted service options
If you use sensor technology to collect and analyze data, you can offer more targeted services to your customers. By offering different packages and combinations of services, customers can choose what they need. As customers use more services over time, revenue per customer will increase. A modern billing system is essential for providing these services.
Step 9: Fraud and revenue leakage prevention
Revenue leakage is particularly harmful for SaaS companies that rely on recurring customer payments. To prevent revenue leakage, you can implement the following practices:
- Ensure accurate and updated information on all customer-related credit card numbers and bank account details.
- Ask for built-in fraud prevention features like two-factor authentication or payment analytics.
Step 10: Allows ecosystem integration
Check if your billing platform allows easy ecosystem integration like:
- Integration with your existing tech stack with near-zero developer dependencies and workarounds.
- Self-serve sign-up for APIs
- Account management
- Customization to support customer use cases.
Step 11: Provision for real-time metrics and analytics
Is your platform of choice equipped with real-time metrics and analytics such as:
- Annual Contract Value (ACV)
- Annual Recurring Value (ARR)
- Total Contract Value (TCV)
- Net Dollar Retention (NDR)
- Customer churn
- Product upsell
This valuable data is like gold. It gives you a bird’s eye view of your business performance and enables you to make pragmatic decisions to further your business.
Step 12: Support for regulatory compliance
Regulatory compliance with SOC 1 & 2, PCI, and other standards is mandatory to launch a successful IPO. Collecting and storing your customers’ data without meeting these requirements can greatly hinder your IPO efforts. Instead of creating and managing a compliance team, using a billing system that completes these tasks for you makes more sense.
Closing Thoughts
Selecting the best billing solution from the given options is not an easy task. However, when you choose the right solution, your efforts can pay off rich dividends. Another way to simplify your work is to opt for Togai, the best usage-based metering and billing software. A feature-rich billing and monetization platform, Togai is easy to use. It helps implement various pricing strategies ten times faster, in less than a day, instead of a year-long effort.
Schedule a demo today to see how Togai can empower your business with the right billing platform.
