With enterprise billing software, businesses manage billing, sales, customers, and all other aspects of enterprise data management.
They use it for pricing, tracking inventory and customer behavior, billing and payments management, and finally, creating invoices.
All, of course, supported by advanced analytics, reports, and forecasts.
Modern enterprise billing software takes Billing and Revenue Management (BRM) to the next level and is a crucial part of enterprise risk management.
But what is the difference between a general billing system and one suited for enterprises? When is the time to make a switch?
The difference is the scale on which a billing software must operate, the functions it supports, and the performance it needs to manage an enterprise!
If an existing billing solution threatens to limit a business’s growth, it is time to switch.
In this guide, we’ll talk about the demands of enterprise billing software, how it works and why you should implement it in your growing business.
Table of contents
- What is an enterprise?
- What is enterprise billing software?
- Billing software vs. Enterprise billing software
- Unique features of Enterprise billing software
- Benefits of Enterprise billing software
What is an enterprise?
Enterprise is a synonym for a big company, although definitions can vary widely. The business size and how it ranks is mostly classified by the number of employees and annual revenue.
One of the most used classifications divides enterprises into two categories – Small and Medium Enterprises (SME) and large enterprises.
- Small and Medium Enterprises (SME) are companies with 50 to 250 employees and annual revenue from $10 to $50 million. They most likely have offices in different locations and are commonly active in various countries and international markets.
- Large enterprises have more than 250 employees and create an annual revenue of more than $50 million. They are present in international markets with offices worldwide. But it really depends on the definition, and some claim a company is a large enterprise when it has over 1000 employees and more than $1 billion in annual revenue.
For our case, it is essential to look at the IT capabilities of both types of enterprises.
Regarding IT, SMEs usually have a small IT department with employees with general skills. A large enterprise, however, has a complete IT department that includes several specialists with a wide variety of broad and specific IT skills.
What is enterprise billing software?
To fully understand enterprise billing software, we must first understand how a modern billing system works regardless of the company’s size. For all the details and basic information, we suggest you read our 101 guide to billing systems.
In essence, an enterprise billing software does everything that a regular billing system does, but on a larger scale. It must handle the automatization of a vast number of events and hundreds of thousands or millions of customers.
Not only that, enterprises have subsidiaries worldwide. They operate in different markets with different currencies and local laws and regulations.
Lastly, enterprises demand the highest level of security and excellent 24 hours technical support.
Billing software vs. Enterprise billing software
Comparing a regular or traditional billing software and an enterprise billing solution is hard because of the many different products on the market.
Some billing solutions are good for running a medium size company, but most are really meant just for small businesses.
For this comparison, let’s look at good billing software and why it fails to be an “enterprise billing and revenue management solution.”
Complex business models
Converting a product or a service into revenue is called monetization. In the simplest form, it’s taking a product, determining the price, and selling it.
However, it’s not that simple anymore. Businesses develop new products and services that are more complex to price, sell, and bill. So the marketing and sales departments are developing new business models that billing software must support.
Owning things is being replaced by more flexible subscription business models that are rising everywhere. With them, the demand for subscription management software is increasing rapidly.
Customers want to pay only for what they use, so support for usage-based pricing and usage-based billing, along with metered billing, is necessary.
Combining all these complex product and pricing models into a final bill is where all but a few top enterprise billing solutions fail.
When we talk about enterprise, we can speak of 500.000 and more customers and millions of events. If some tasks can still be handled manually in small to medium businesses, for an enterprise, that is unthinkable.
So billing automatization is a big part of an enterprise billing solution.
Automating the Order to cash process reduces the time and human resources needed to perform billing tasks and directly saves costs.
It allows you to automate various tasks associated with billing, such as creating billing cycles, enabling notifications, tracking payments, and sending customizable invoices in different forms.
Automated billing software also prevents possible human errors, which can be costly to resolve and damage customer satisfaction.
Customer care and satisfaction
The customer is the king and wants transparency and ease of use.
Therefore, good enterprise billing software should enable them to access all their personal and billing information anytime over a customer portal or a mobile app. There they can see what they are paying for.
The customers can also adjust their product offers and subscriptions, change payment methods, use coupons and discounts or get help.
All this increases the customer experience and customer retention.
Advanced analytics and customer behavior
An enterprise can’t function without advanced business intelligence and analytics.
Enterprise billing solutions help track product sales, renewals, and cancellations. This type of solution allows businesses to control their customer base and generate reports based on this information.
The analytics also provides valuable insight into important KPIs like customer lifecycle value or customer churn rate, which every business must follow closely.
The management needs real-time reports and forecasts to make informed business decisions.
Real-time reports are especially valuable for evaluating how new products perform. Is the pricing correct, or does it need adjustment? How are customers responding to promotions and bundling of products?
Today customer behavior is changing fast, and a successful business model can start to decline almost in a matter of days.
Revenue leakage is an issue connected to inaccurate billing and a lack of analysis overview. Estimates show that about 42% of companies experience some form of revenue leakage.
The average loss of 1% to 5% of realized EBITA is a severe issue. However, it is easy to prevent it with the right billing solution that enables the finance team to spot errors before they develop into significant problems.
Unlike classical billing software, this data is updated in real-time and available with few clicks. If before analysis were done quarterly or even yearly, now a business can therefore react to changes fast.
Enterprise billing & risk management software
One of the five categories of enterprise risk management is Financial reporting. An enterprise billing software with its advanced business intelligence can identify the business risks and how they affect the business as a whole.
The centralized financial data enables the financial departments to access all of the important data quickly. Furthermore, they can easily access reports and build custom reports. Whether it’s stakeholder reports or forward-facing analyses, the enterprise billing software has all the financial reporting tools needed.
It can predict how internal and external business threats affect the enterprise. In addition, it is also used in financial fraud and credit risk detection.
Worldwide business operations
Enterprises operate worldwide. The most basic function that an enterprise billing software must support is operations in various markets. That means multi-language support, support for different currencies, and taxation according to the local regulations.
An enterprise can have subsidiaries worldwide or even be a group of independent companies. Still, the software must support billing from different companies and centralized handling of all business operations.
Volume and performance issues
We eventually came to the real issue when discussing the differences between regular and enterprise billing software. It is the need to process millions of events and transactions.
While the number of customers should be a good indication of what a billing software should be able to handle, it’s not that simple.
The number of billable events per user can vary greatly, depending on the industry.
To illustrate, let’s look at three examples!
A user has a software subscription with a recurring billing cycle set to the first day of the month. He is charged and billed for the subscription once a month.
So if an enterprise has one million users, the billing system must handle one million monthly bills. Of course, not all subscriptions are that simple, but let’s use this as an example.
A customer uses a Pay-per-view video-streaming service and has the billing date set to the first day of the month.
If he watched five movies that month, he crates five chargeable events billed on the selected date.
Firstly the enterprise billing system must support usage-based charging.
If an enterprise has one million such customers, it must handle five million events and charge and bill them appropriately.
Telecom and other high-volume billing
For a telecommunication company, every phone call or data transfer a user makes is a chargeable event. Even if the event has no value, it still needs to be rated, charged, and billed at the end of the billing cycle. So one user can create thousands of events that the telecom billing system needs to process.
If we multiply this by one million users, the difference is enormous.
The enterprise in the first example could maybe get away with using a regular billing system. However, the company in example two and especially example three have no option but to use the best enterprise billing software on the market.
Furthermore, it’s not only the software but also the infrastructure that must support such volume and provide top performance.
That is why the best enterprise billing solutions are cloud-based.
For example, Tridens Monetization uses Amazon Web Services (AWS) cloud platform.
The security of enterprise billing software
Security is a big concern among enterprises as cybercrime has been rising recently.
While large enterprises are logically the most desirable targets, small and medium enterprises (SMEs) get targeted the most.
The reason behind that, unlike the big ones, SMEs are the most vulnerable. Most of them lack cyber security specialists. Furthermore, they are often reluctant to invest in protection and in-house cyber security staff.
Often overlooked in security and data protection is assigning roles to users. Individual users’ roles and rights are strictly defined in an enterprise billing system. Doing so prevents unauthorized access to sensitive data within the company.
Most attacks happen on outdated enterprise data management and billing systems. On the other side, an up-to-date enterprise billing system has all the security features and data backups one needs today.
Unique features of Enterprise billing software
An enterprise billing software list of features is very long, but let’s look at some that are unique and usually not found in traditional or simpler billing systems.
REST API support
Application Programming Interface (API) is a set of services that support application development and communication between multiple systems.
REST APIs are used for seamless integration with any third-party application. They enable a business to build a fully integrated ecosystem of critical enterprise applications to meet its specific billing needs.
The Tridens Monetization enterprise billing software has REST APIs, that enable seamless integration of different third-party applications like SAP and NetSuite or any other ERP, CRM, mobile apps, and more.
Hybrid pricing and Innovative Offer Design
With innovative business models also come innovative and flexible hybrid pricing models. As we mentioned before, many billing solutions can’t even support usage-based billing or complex subscription models that include paywalls or models like Freemium.
Therefore there is no chance that they could support a hybrid pricing model.
But innovation in pricing and offers is key. Therefore hybrid pricing models are everywhere today.
A combination of flat rate and usage-based pricing? Subscription combined with tiered pricing? A freemium with per-user pricing?
All these models are around us, and we like them because of their transparency and flexibility. The possibilities of new hybrid models are endless, but only a few enterprise billing solutions can handle them.
Consolidated charging, billing, and invoicing
In the world of billing, three terms are used for the same operation. Sometimes called consolidated charging, at other times consolidated billing or consolidated invoicing.
It’s a process where at the time of billing, multiple chargers of a single customer are consolidated into a single invoice.
To explain it simpler, when a company bills its customer for more products or services, he gets just one instead of more bills.
In telecommunications, it’s used to bill the mobile subscription together with installments for devices bought, broadband internet, and IP television. In utilities, it’s a way to combine electricity and gas or water and garbage collection on one invoice.
We prefer the correct term consolidated billing.
Dunning is the process where a company attempts to collect late payments. Automated dunning is a customizable process inside the enterprise billing solution that notifies customers of those overdue amounts and past-due accounts.
It communicates with customers via automated emails, SMS, and app updates.
Automated dunning is proven to reduce unintentional churn and increase cash flow. Please read our blog to get more information about dunning and its strategies.
Different payment methods
Enterprises must provide customers with different options of payment methods if they want to improve the customer experience. Researches show that almost half of customers abandon their purchase if they can’t pay with their preferred payment method.
Implementing various payment gateway is a must for any enterprise billing software, so Tridens Monetization enables a trouble-free integration of just about any payment method on the market.
Benefits of Enterprise billing software
There are many benefits companies gain when they use enterprise billing software.
Some of the main benefits include:
- Improved efficiency & productivity with automation
- Lower costs of operations
- Improved enterprise billing and data management
- Informed decision-making based on business intelligence
- Support for all business and billing models
- Scalable and ever-growing Ecosystem
- Faster time-to-market
- Better customer communication and experience
- Streamline invoicing
- Improved Payments, Collections & Dunning
- 24/7 technical support
- Improved security
However, the biggest of all benefits is what an enterprise billing software doesn’t do.
It doesn’t limit a business’s growth and quest to monetize its products.
When businesses grow, they at some point realize their trusted billing system can’t cope with the growth anymore. We know it can be painful to switch billing software.
It’s a step into the unknown that takes time and resources. That’s why many put it off until the last possible moment.
But with a selection of the right well-proven enterprise billing software and a trusted partner like Tridens, it’s not that hard at all.
Want to get more information about our solutions? Leave a comment below or Schedule a Demo!