Why Does Your New SaaS Business Need Recurring Billing Software?

Why Does Your New SaaS Business Need Recurring Billing Software?

Let’s say your eCommerce startup sells software-as-a-service (SaaS) products. In that case, it’s important to know about subscription billing.

You’d feel irritated if the payments for your Netflix account weren’t automated, right? How would your new clients feel if they had to manually perform billing tasks at certain intervals? Of course, they’ll have a bad customer experience.

Statistics report that subscription billing software will reach USD 22.3 billion by 2032 after growing at a 16% CAGR. That means multiple companies have already started exploiting the benefits of recurring billing software. It has become a preferred payment model for most clients and companies in the SaaS industry.

Being new to the market, you might be unaware of the importance of this revolutionary technology. In this article, we’ll discuss everything a new eCommerce business owner needs to know about recurring billing.

Understanding Recurring or Subscription Billing Software

All newly established eCommerce businesses, especially those selling SaaS products, need subscription billing software. With such a tool, customers can be charged regularly (monthly or yearly) for the offered products and services.

Moreover, recurring billing works in the following manner:

  • Customers can choose monthly or yearly payments based on their finances.
  • They can also manually submit the payment at set intervals for the invoices they receive.
  • It helps trigger the billing cycle without requiring you to make manual updates.

With this, you can collect payments, manage your subscription, and deliver invoices to the right clients. This software also helps eCommerce businesses venture into the international market by offering global payment and sales tax services.

The Subscription Billing Pricing Models You Should Look Into

According to PayPro Global, such tools usually come with unique flexibility because of the different pricing packages and models. This way, you get to cater to a wide demographic. The popular ones include the following:

  • Flat Rate

This model helps businesses charge customers the same amount at different intervals. It’s best for eCommerce brands with a set target audience and a clear value proposition.

  • Per-User

This package is mostly famous among companies offering SaaS products in a B2B setting. That means your client has to pay the price for the exact number of users using the billing system.

  • Tiered

With this, you can offer several price points to your clients based on usage, features, and users. It helps you target different market segments and allows upselling or cross-selling opportunities.

  • Usage-Based

This model is commonly used by cloud computing and telecommunications brands. With it, you can charge your clients based on the types of products or services they use.

Why Should You Use Recurring Billing Technology?

As a new eCommerce SaaS business, you might find it hard to manage multiple client subscriptions and deal with the challenges. Examples include tax burdens, invoicing complexities, poor operational insight, etc.

Thankfully, recurring billing software can help you strategically navigate these. The reasons you should integrate such a tool into your business operations include the following:

  • You can increase efficiency by automating repetitive payment processing and subscription management tasks.
  • This tool helps scale your eCommerce business through billing complexities and manage customer volumes.
  • It improves the customer experience by offering self-service portals, alternative payment methods (like currencies), automatic reminders, etc.
  • You can access better consistency and greater accuracy with billing task automation by eliminating human errors.

With it, you can also comply with tax and legal regulation requirements. All in all, recurring billing helps alleviate the operational budget and gives you a fully integrated payment solution.

3 Things to Consider Before Choosing a Subscription Billing Partner

Do you want to know how to decide on the correct subscription billing platform for your eCommerce business? In that case, you’ll have to follow these tips:

  • Ensure that the company follows security and compliance protocols. They should abide by industry regulations to safeguard customer data, offer encryption, and keep you safe from cybercrime.
  • The platform should be scalable enough to accommodate your business’s growth requirements. Examples include increasing transaction volumes, price model changes, etc.
  • Choose a partner with integration features. Check whether the billing platform allows integration into your existing CRM and accounting software to ensure operational efficiency.

Apart from these features, ensure that the software provider offers comprehensive reporting and analytics tools. With this, you can gain insight into revenue trends, subscriber rates, customer behavior, etc.

In summary, using recurrent billing technology is a necessity for eCommerce businesses selling SaaS products. Did you know that most customer friction in this industry comes from billing misunderstandings and technical issues? That’s why a trustworthy partner can help your company streamline billing processes and ensure timely payments.

This billing model offers SaaS companies a way to boost their cash flow and leverage flexibility while catering to a diverse clientele. The right collaboration allows you to simplify the pricing structure for your customers. When you choose the right software, you get to enhance scalability and operational efficiency.