Did you know that 48% of subscription-based businesses struggle with accounting and reporting challenges?
Well, considering that a recurring business needs complex revenue recognition, automated invoicing, dunning, dealing with churn and cancellations, and various third-party integrations… does this really come as a surprise?
Luckily, there’s one piece of technology that can simplify this complex billing model – recurring billing software.
But what exactly is recurring billing software and how does it work? What are its characteristics and what benefits does it bring?
In this article, you’ll learn all of this and more.
- Recurring billing software is a tool that automates the process of regularly charging customers at predetermined intervals.
- Recurring billing software works by scheduling and automating the repetitive charging of customers at specified intervals, ensuring seamless processing of recurring payments.
- The key features of recurring billing software include offer design, customer management, finance management, billing and invoicing, reporting and analytics, and integration capabilities.
- The biggest benefits of recurring billing software include automated payment processing, improved cash flow management, better customer experience, time and resource efficiency, and access to real-time analytics.
- Some of the best recurring billing software players in the market are Tridens, Chargebee, Recurly, Maxio, and OneBill.
What is Recurring Billing Software?
Recurring billing software is the technology that automates the process of charging customers on a regular schedule for products or services.
It facilitates transactions by automatically billing customers at predetermined intervals, such as monthly or annually.
Subscription-based businesses, membership services, and SaaS providers all use this software to streamline their billing operations.
The key functionality of recurring billing software is to set up and manage subscription plans, process payments securely, and handle billing cycles.
By automating billing procedures, recurring billing software not only saves time but also reduces errors associated with manual billing processes.
And while manually managing your billing process is doable for some, there are simply too many advantages to using software to ignore.
That’s one big reason why the recurring billing software market is on a steady rise – it’s estimated to reach $10.8 million by 2028, with a CAGR of 13%.
How Does Recurring Billing Work
Recurring billing (aka subscription billing) works as an automated payment process where a customer’s credit or debit card is charged at predetermined intervals for a subscription or service.
Here’s a more detailed, step-by-step overview of how recurring billing typically works:
- Customers sign up for the product and agree to pay a recurring fee at regular intervals (e.g. monthly or annually). They also provide their payment information during this process.
- The automated billing system executes charges based on the agreed-upon schedule and uses a payment gateway to secure the transaction between the customer account and your business.
- Customers receive an update about the expense before each scheduled payment and a confirmation email sent post-transaction that details the amount charged, date, and other relevant information.
- The billing software automatically generates an invoice that includes all the relevant details and sends it out to the customers via email or an online portal.
Considering that gaining a new customer is five times more expensive than retaining an existing one, having a robust recurring billing solution at your disposal becomes that much more important.
Recurring Billing Software Key Features
Now we know what recurring billing software is and how it works – time to check out the key features of this technology.
Here are the key features that recurring billing software generally includes:
- Offer design: The software should allow you to create attractive packages for your customers by putting together special deals using discounts and bundles. Once you design an offer, you can set prices for one-time purchases, regular subscriptions, or usage-based billing charges.
- Customer management: Managing customers goes beyond just bringing them in. It’s about providing support and keeping a constant eye on their interactions with your business. With recurring billing software, you should be able to get real-time access to their balance and entitlement information, so you can incorporate a personalized approach to meet their needs.
- Billing and invoicing: Subscription billing software streamlines financial processes by automating recurring billing cycles and ensuring the timely generation and delivery of invoices. The system integrates with diverse payment gateways to facilitate secure and seamless transactions. Additionally, it accommodates changes in subscriptions mid-cycle through efficient proration handling, allowing for adjustments in charges or refunds when customers upgrade, downgrade, or cancel their subscriptions.
- Finance management: Managing finances is more than just tracking revenue. It involves recognizing the different stages of earning money, handling collections effectively, and managing accounts at various levels of complexity.
- Reporting and analytics: The software provides businesses with reporting and analytics tools, offering deep insights into crucial subscription metrics. From tracking churn rate and customer lifetime value to monitoring monthly recurring revenue (MRR), businesses can customize reports to address specific needs. Put simply, the software should provide you with detailed reports that you can analyze to gain more insight into user behaviors.
Benefits of Recurring Billing Software
When it comes to recurring billing software, there’s no shortage of benefits.
Here are the biggest ones:
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- Automated payment processing: Recurring billing software automates the payment collection process, which reduces manual effort and minimizes errors associated with manual billing.
- Improved cash flow management: By ensuring regular and predictable recurring revenue from subscribers, recurring billing software helps businesses maintain a steady cash flow, allowing for better financial planning and management.
- Time and resource efficiency: Automating billing systems saves time and resources that would otherwise be spent on manual invoicing and managing all financial facets.
- Better customer experience: Since recurring billing software provides a seamless and convenient payment experience for customers, it directly improves overall satisfaction and reduces the likelihood of any payment-related issues.
- Access to real-time analytics: Access to real-time data and analytics allows businesses to track key metrics, monitor performance, and make informed decisions to optimize their billing strategies.
Comparing Recurring Billing Software Companies
By this point, you should know what recurring billing software is, how it works, and what benefits and features it brings to the table.
So let’s cover the last question in the menu – what’s the best recurring billing software?
|Suitable for any subscription-based business model
Streamlines complex billing operations
End-to-end revenue management solution
Great customer support
Includes out-of-the-box features
|Not suitable for small businesses and startups
|Flexible, robust, and future-proof features, perfect for businesses with complex pricing and billing
|Great for businesses that are moving quickly from startup to enterprise
Offers a freemium plan
Great scalability features
|Users can choose from 450+ billing scenarios
|Advanced personalization features
100+ billing plan setups
|Non-intuitive interface (especially for beginners)
|Machine learning technology for dunning management
|One of the most reliable solutions for B2Bs
Diverse invoice customization features
|Confusing organization of tools and features, which can make it overwhelming
B2B personalization features for creating new offers
Easy to use
|Mediocre reporting capabilities
|Robust channel partner enablement feature
Tridens Monetization is a top-quality recurring billing software for any company looking to properly manage and streamline its complex billing operations.
You can use Tridens to:
- Automate your billing and invoicing processes
- Manage pricing plans
- Simplify revenue management and recognition
- Take care of recurring payment collection and processing
- Gain insight into customer analytics
And a lot more.
No matter what type of subscription-based business model you have, Tridens can help you manage it better.
Whether it’s finance management, scheduling tasks, or more granular reporting features, our software offers everything you need for your business operation features.
You can use it to build a variety of reports – from planning and customer usage to catalogs and general statistics.
Chargebee is one of the most reliable recurring billing solutions for companies that are scaling rapidly and need a partner to help them transition from a startup to an enterprise.
The key characteristics of Chargebee include automated billing workflows, dunning management, tax management, checkout customizations, and different tools for managing upsells and discounts.Another big benefit is that there’s a freemium plan for businesses coming out with new products and they get 450+ potential billing scenarios to choose from.
Recurly includes a ton of advanced personalization features, which makes it one of the most flexible recurring billing solutions on the market.
Users can choose from 100+ billing plan setups and have features such as CRM integrations, communication ops, finance management, dashboard and analytics, and plan automation included.
However, one of its most popular features is the machine learning technology that leverages robust dunning features, which does a great job of helping companies reduce churn.
Maxio is one of the best B2B-specific recurring billing software solutions and it was launched as a result of the SaaSOptics and Chargify company merger.
You can find everything you need to efficiently manage your recurring billing, including invoicing automation, revenue recognition, billing automation tools, tax automation, customer analytics reports, and more.
The biggest advantage of Maxio is its diverse personalization offering which helps B2B businesses streamline packing, pricing, and new product launches.
OneBill is also a popular recurring billing software that helps companies automate and manage their complex revenue lifecycle operations.
It offers everything from quote to cash, order fulfillment, and billing in one system.
Some of its most notable features include provisioning, revenue management, self-service portal, AR processes, multi-currency support, invoice generation, payment processing, and dunning management.
Overall, if you want to stay on top of your complex billing and revenue recognition processes and be able to properly manage your subscription business model – you need recurring billing software by your side.
Not only does it help you automate your billing, but it also streamlines customer management, reporting and analysis, finance management, invoicing, and helps you build new offers.
Automated billing software is basically the same as subscription and recurring billing – it’s technology that’s designed to streamline and automate the billing process for businesses.
The biggest advantages of recurring billing include predictable cash flow, more accurate revenue predictions, increased customer loyalty, better customer lifetime value (CLV), and higher engagement.
When choosing recurring billing software, businesses should consider factors such as ease of integration with existing systems, support for various payment methods, compliance with security standards, and scalability to accommodate future growth.
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