Regardless of how small or large a company is, billing is one of the most crucial components of its operations. A minor error in your billing procedures can turn into a substantial loss for your company. It takes a lot of thinking and effort to set up a simplified billing system. In recent years, billing software has grown in popularity as a tool for organisations to improve productivity and eliminate labour and errors.
An automated billing system is a software solution that bills or invoices customers without considerable manual involvement. The approach is beneficial for firms that use a subscription or retainer model to charge consumers a recurring payment each month. An automated billing system aims to generate and deliver invoices and track and process payments. Businesses with a vast and diverse customer base, a wide range of products/services provided, and subscription or retainer payment methods can benefit the most from the solution.
It's essentially a technology that allows you to automate the usual but often tricky billing processes. Examples are invoicing, payment collection, provisioning, dunning, approvals, and customer-event triggers. An automated billing system aims to increase efficiency by optimising your billing procedures, saving you time and money.
The benefits of automated billing are numerous. Although the transition from a manual to an automated process may appear overwhelming, the various benefits are worthwhile.
Automated billing systems manage the entire cash collecting process, from data collection to invoicing delivery. The system includes vital billing features such as data entry and verification, billing codes, payment tracking, and security.
Automated billing solutions can help you get cash into your firm faster while relieving you of a significant chore.
By properly setting up an automated billing system, you can avoid human error. Less human intervention means fewer billing errors and reduced customer churn.
Automated Billing Software simplifies complex payments. By automatically being able to take into account prorated billing periods, minimum terms and free trials you’ll be saved the headache of manually calculating complex payment amounts. They’re also able to automatically include pricing disclosure information explaining to your customers the reason behind fluctuating payment amounts.
You can set up your software to automatically send out invoices with automated billing on certain days and times.
Good automatic billing software includes a dunning feature that retries declined cards and tells clients when a payment method has expired or been denied, urging them to change it.
Let's dive into detail to the 8 most critical questions on automated billing systems to give you a clearer picture-
How do you optimise dunning with an automated billing system?
Dunning management refers to an automated billing system or recurring billing system's ability to deal with the ramifications of a payment decline or payment failure. In the next month, when the customer is automatically billed for their service their stored credit card is denied. When this happens the 'dunning management' feature will trigger and the billing system will take the appropriate action to retrieve the payment and get the customer’s subscription back on track.
This form of dunning management is crucial for organisations with automated billing systems, but it also makes the billing process easier for customers as it allows them to rectify the payment issues before they experience a disturbance in their service. Most top-rated automated billing systems include dunning management as a standard feature so before deciding on a billing system for your company, you should make sure dunning management is included.
How much time is needed for a new order to be processed?
When having to process new orders manually, you can find yourself taking considerably more time conducting this task than an automated billing system would.
Furthermore, manual processing can require the manipulation of data, which raises the risk of errors. Mistakes cost you time and money, and they can tarnish your company's reputation, leading to client dissatisfaction and, eventually, customer turnover. Equally concerning is that, as your business grows, errors will compound and spread to other areas of your company.
What features of invoice generation do you get with an automated billing system?
Having an automated billing process is both a present and a future necessity, particularly for firms that serve a broad consumer base. Because not all of your consumers will desire the same thing, giving them a price range to choose from will provide your company a competitive advantage. With an automated billing system invoice generation is automated and based on the data in the invoice summary work files. You’ll also get the following features in terms of invoice generation with an automated billing system-
Automatic generation and application of region-specific e-invoice elements, such as a unique QR code for e-invoice data validation.
Customisable invoice templates.
Invoices that are available in multiple languages.
Validation of invoices using SLA/billing guidelines.
Identification of questionable invoices that require manual review.
Using an electronic signature to sign invoices.
Support for a multi-department invoice approval workflow.
Which systems should be linked to the billing system?
The ability of the billing system to collect data from other systems is critical for accurate invoicing. It's also crucial to figure out what data different teams within your company need and how they intend to use it. Insights from an integrated system, for example, should be provided to sales, marketing, and even product development to keep them up to date on incentives, promotions, and areas for improvement.
To get the most out of your automated billing system, it should be simple to integrate with front- and back-office systems, such as downstream banking systems, customer relationship management (CRM), enterprise resource planning (ERP), and inventory management software.
Should revenue recognition be done manually, or should it be automated?
Manual labour causes inefficiencies and puts you at risk for noncompliance due to human error. As sales volume and complexity grow, the need for thorough, consistent, and correct revenue recognition becomes more crucial — and more challenging to achieve. Revenue recognition is critical for understanding your company's profitability, but it must also comply with accounting standards such as ASC 606 and IFRS 15. Revenue recognition can be handled manually if you have a small business with a small number of clients and a business model where payment is collected upon delivery of the product or service.
An automated billing system becomes vital to the revenue recognition process for growing organisations using a subscription based model.
What languages and tax-paying areas does automated billing system support?
Thinking about the locations your company now serves or that it plans to expand into the future is important. With different locations come different currencies, regulations, taxes, and languages. Keeping up with these manually can be extremely time consuming, especially when regions bring in new or updated regulations.
Selecting the right automated billing system that supports the locations and regions you conduct business can massively simplify your tax requirements by automatically assigning the appropriate tax rates to both invoices and credit notes. Going global necessitates an automated bill payment system to localise your solution to match regional and consumer requirements. It also requires the ability to define currencies for invoicing, rating quickly, and reporting purposes.
Do you track the success of your pricing strategy or marketing initiatives in your reporting?
Subscription reporting can help you figure out which services are the most popular with your customers. You'll want to compare the performance of various items and services. Cohort reports, for example, allow you to divide down consumer data by area or price. In this manner, you can experiment with several tactics to see which one generates the most revenue.
An automated billing system can aid with reporting by providing built in reports or subscription, customer and invoice data exports.
How can you gain better insights into crucial subscription metrics?
Every firm wants to know what's going on behind the scenes in their business and what the data indicates. Therefore, access to relevant reports is a vital component of monitoring the health of a SaaS (Software as a Service) and other subscription-based business. You will receive valuable business insights from the reporting tools, which will allow you to forecast future revenues. In addition, you can examine what's working and what isn't with reports that are easily accessible. This will help you make more knowledgeable judgments in the future. A modern recurring billing platform should have a reporting function that will allow you to have a better look at the following metrics-
Sales: Keep note of your sales and if there are any payment complications, such as a credit card that has expired or a shortage of cash. In addition, it's critical to keep track of what each customer owes to your company in the event of a payment dispute. A recurring billing platform allows you to filter and analyse data in various ways, providing a clear picture of our business.
Cash: Your billing software's reporting feature gives you visibility into customer payments and data, allowing you to understand where these payments are coming from and how your customers are paying for their services.
Revenue:Revenue can only be recognized in subscription-based enterprises when the consumer receives the value of the goods or services they’ve paid for. In a subscription business, manually tracking revenue is laborious and error-prone but with recurring billing software recognition can be handled automatically.
It makes no difference how big or small your company is if you rely on cutting-edge technology that promises enhanced production, faster cash flow, and better data management, a recurring billing system is what you need. Billsby's automated billing services platform allows organisations to manage invoices and customer data in the cloud cost-effectively accurately and long-term. If you're still manually invoicing in today's environment, your company appears out of touch and behind the times.
With automated billing, you can optimise your invoicing and payment flow while also eliminating billing and payment collection headaches. As a result, your invoices will be accurate and timely, your clients will be pleased, and you will receive your money sooner and with fewer hassles, thereby enhancing your cash flow. When it comes to something as crucial as your company's billing software, you shouldn't settle for anything less than the best. Billsby automated recurring billing software gives you a more open and adaptive billing approach that your consumers will come to like and trust. Billsby's automated billing services can be accessed from most current devices, and they can be upgraded to fit your company's blossoming and changing demands.
You can gain more insight into recurring billing by reading our other blogs on B2B subscription management and how integrated accounting solutions can help your business grow. Alternatively you can contact our team at Billsby today to see how we can assist you on the way to billing automation.