The subscription business model can be very lucrative if contract billing is properly managed. Gone are the days of selling a piece of software and that being the end of the business relationship. We see more and more businesses switching to a subscription based business model for their software and related services because it gives clients some flexibility and companies a more fluid revenue stream. However, one challenge that comes with subscription based services and solutions is the management and automation of recurring invoices.
What follows is a brief overview of areas where contract billing management can prove difficult and solutions you may employ to better manage contracts and recurring invoicing.
Maintaining recurring billing can be a very manual task but it doesn’t need to be. Automation is essential for sending invoices out with confidence and dependability. Automating the billing process not only eliminates the chance for human error, but also creates better customer satisfaction… Afterall what client doesn’t like accurate and consistent invoices?
Depending on your business and the contracts you have in-place, contract billing management software can be customized to fit your business and the billing options you offer. Invoicing is just one of the challenges subscription based businesses face. If you walk away with one thing from this article, it should be that you understand how important it is to automate invoicing. Once parameters are set, invoicing happens like clockwork.
Forecasting and predicting future revenue is important in a subscription billing business model and can sometimes be a challenge. The more complex invoicing gets, the more difficult it is for controllers or the CFO to make accurate financial forecasts. Some software companies bill monthly, some yearly, others every quarter and others have much longer, 3 and 5-year contracts. Not only do contract terms make it difficult to forecast, but then you also need accurate invoice reporting. It is your part to have an efficient process and fully integrated system in place so reports can be made and finance can make financial forecasts that show true predictions. Most software companies are implementing contract billing management solutions just to ensure reliable invoicing processes and to provide higher customer satisfaction.
The contracts themselves play a significant part in the subscription model. It is important to feel comfortable that your business can keep up with contract terms and renewal periods so that revenue isn’t lost and clients are kept happy. Some contracts will rollover into another agreed upon term unless the contract says otherwise, other contracts may be negotiated and agreed upon every time the contract itself is up, other contract maybe setup on a continuation until the client cancels service. Since there are so many variables, most organizations need a system in place to keep track of when clients are due and how to move forward with the contract.
While many assume the best option is to purchase a solution solely for managing recurring billing, it is never ideal for organizations to operate in multiple software systems. Think about how much more efficient your business would be if the contract billing management software was integrated with your existing ERP or CRM platform? Many contract billing management solutions on the market are bolt on solutions. This means they do not fully integrate with your existing financial management platform and the order-to-cash process isn’t as efficient as it should be. The finance and accounting department should operate on a single solution. 360 contract billing management software is fully integrated with NetSuite or Salesforce. Not only does this eliminate information silos, but it ensures sales and accounting have visibility into each department.
More on 360 Contract Billing
360 Contract Billing integrates into NetSuite ERP or Salesforce CRM platform adding the functionality to track subscription based services and automate billing, including renewals, invoices, and collection of payments due. In the end, the best way to handle contract billing is within your current ERP or CRM software for visibility and alignment.
>> Learn more about 360 Contract Billing here!