How Does SaaS Subscription Billing Work and What Are Top Billing Software for SaaS

In our blog, we’ll guide you to the top SaaS billing software for your business, all explained in a simple, detailed review.

Did you know that 80% of all new SaaS companies use a subscription-based business model?

However, while subscription billing does make the most sense in the SaaS sector, many companies underestimate the complexity of SaaS billing.

Multiple complex pricing strategies in a single product, constant upgrades and downgrades, rapid growth scalability requirements… to manage all these elements, businesses need proper SaaS subscription billing software in place.   

And if you’re not sure what to look for in software for subscription billing, finding the perfect fit will take a lot of back and forth.

But don’t worry.

We did the heavy lifting for you and prepared a list of the best SaaS billing solutions currently on the market.

Also, we’ll go over some of the basic principles you should understand about SaaS subscription billing, why it’s important, and what features to keep an eye on.

Let’s dive in.

What Is Subscription Billing?

Subscription billing is a widely adopted recurring payment method that has gained significant popularity across various industries in recent years, but primarily in the SaaS sector.

And seeing that the subscription economy is projected to reach $1.5 trillion by 2025, we have just scratched the surface of this billing system.  

Simply put, subscription billing for SaaS companies involves charging customers a recurring billing fee at regular intervals, in exchange for continued access to a product or service.

Most commonly, these intervals will be:

• Monthly 
• Quarterly
• Annually

This billing model isn’t limited to a specific industry or business size. 

It caters to a broad range of sectors, including:

• SaaS organizations
• Media streaming platforms
• Ecommerce businesses
• Membership-based organizations

And more.

What Is SaaS Subscription Billing?

SaaS billing, also called software-as-a-service subscription billing, refers to the specific implementation of subscription billing within SaaS organizations.

To put it simply, SaaS subscription billing is when businesses offer software access through subscription plans.

Instead of purchasing software outright, customers subscribe to the SaaS product and gain ongoing access to its features and functionalities for as long as their subscription remains active.Considering that a study by Forbes shows that getting new customers costs five times more than retaining existing ones, it’s no wonder why the vast majority of SaaS companies opt for this business model.

Importance and Benefits of Good SaaS Billing Software

SaaS companies have one of the most complicated business models when it comes to billing management.

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Complex products, upgrades and downgrades, tiered pricing, different upsells, comprehensive product mix… there are just too many things that need to be considered.

SaaS billing software can help streamline and automate this whole process.

Here are some specific benefits:

• Provide analytic insights: To find out what your customers want, you need an analytical system that will track customer metrics and feed you valuable insights. Good SaaS billing software should include a system that collects and analyzes customer behavior, and reports the necessary data.

• Agility and quick reaction time: Implementing new service plans and pricing structures quickly is a struggle for around 32% of businesses, according to an MGI report. Considering how many SaaS options customers have available, it’s important that you can meet their requirements in a timely manner. That’s why it’s important to look for SaaS billing software that provides this agility. Check how quickly and easily the billing platform can incorporate changes since this is crucial for anticipating your customers’ needs, and keeping them satisfied enough to buy again.

• Automated billing: The chances of human error and time-wasting increase with the number of manual processes involved in the system, which is why automated billing is crucial nowadays. Using an automated billing system reduces the risks associated with manual processes, giving the customer a better experience, reducing customer churn rate, and boosting revenue.

• Integration with payment gateways: Most SaaS subscription billing software integrate with popular payment gateways, providing a secure and seamless payment experience for customers. They support various payment methods, including credit cards, digital wallets, and direct bank transfers, catering to customer preferences.

Top 5 Billing Software for SaaS in 2024

So, what is the best subscription billing software for B2B businesses?

Now that you know how SaaS subscription billing works and what benefits it brings to the table let’s check out some of the best billing systems for SaaS businesses in today’s market.

Tridens Monetization – Overall the Best SaaS Billing Software

Tridens Monetization stands as a top-notch SaaS subscription billing solution for software companies looking to stay on top of their complex billing systems.

You can use the software to automate billing and SaaS invoicing, handle different pricing plans, streamline revenue management, handle payment collection, get advanced customer analytics insights, and much more.

Simply put, Tridens Monetization provides an end-to-end billing management solution for all types of subscription-based business models.

Also, unlike other billing software on the market, Tridens takes things one step further by offering a fully capable BSS solution as well. 

You can take advantage of business operation features such as finance management, task scheduling, and granular automated reporting capabilities.

With Tridens, you can build reports for:

• Planning 
• Customer usage 
• Catalogs
• General statistics 

And more.

For task scheduling, some of the main things you can automate include billing & invoicing, dunning, and payments collection.

Zuora – The Most Popular Billing Subscription Software for SaaS

With multiple high-profile companies using it, Zuora is one of the most popular SaaS billing systems on the market.

Zuora offers a diverse range of features, including tax automation, advanced data analytics reporting, dunning management, real-time customer communication, and it integrates with a variety of CRMs and accounting tools. It also streamlines complex billing scenarios like usage-based pricing. 

However, Zuora is mostly tailored for large-scale organizations due to its particular set of upper-market capabilities and features.

Chargebee – Scalable Subscription-Based Billing Software for SaaS Companies

Chargebee is one of the best SaaS billing platforms for organizations that are experiencing rapid growth and are looking for a reliable partner as they go from startup to enterprise.

Some of its key features include billing workflow automation, smart dunning, accounting and tax management, customizable checkout, and built-in tools for handling upsells, cross-sells, and discounts.Chargebee also offers a freemium model plan for businesses that are launching a new product to the market and provides them with 450+ potential billing scenarios to choose the right fit from.

Maxio – One of the Best SaaS Billing Solutions for B2B Companies

Maxio is a great B2B subscription SaaS billing solution and it was developed by SaaSOptics and Chargify as a result of their merger.

In terms of features, Maxio provides all the necessary tools for efficient SaaS subscription billing software– revenue recognition tools, SaaS invoicing software, billing and taxing automation, granular customer analytics, centralized reporting, and more.

But one of the key benefits is its range of personalization features that allow B2B organizations to streamline the packaging, pricing, and launch of new products or services.

Recurly – Flexible Subscription Billing SaaS Software

Recurly is one of the most flexible SaaS billing solutions due to its advanced personalization features that allow you to customize your entire billing system with ease.

There are hundreds of different billing plan setups available alongside standard features like CRM integrations, analytics dashboards, communication management, revenue management, upgrade/downgrade automation, and more.

Another huge advantage of Recurly is its machine learning technology with advanced dunning features that organizations can use to reduce churn.

Challenges in SaaS Subscription Billing and Solutions

Even though there are plenty of businesses that incorporate subscription billing software, SaaS companies tend to have much more complex billing processes that come with unique challenges.

This typically includes:

• More sophisticated usage patterns for analysis
• Increased fluctuation in billing cycles
• Variety of complex pricing strategies in a SaaS subscription billing app
• Need for advanced data security and compliance
• Lots of smaller administrative tasks should be automated

And more. That’s why it’s so important to have the right SaaS billing software to properly manage subscription model core operations and billing.

Choosing the Right Billing Software for Your SaaS Business

Overall, selecting the right billing software is crucial for SaaS companies that want to optimize their subscription billing processes and drive business success.

Here’s a quick recap of why having efficient SaaS subscription billing software in place is so important:

• Streamlines revenue management
• Enables accurate and automated billing for recurring subscriptions
• Reduces billing errors and automates invoice SaaS processes
• Provides real-time insights into subscription metrics and customer usage patterns
• Boosts customer retention through personalized and flexible billing options
• Automates subscription lifecycle management (from onboarding to upgrades and cancellations)
• Ensures compliance with regulatory requirements and data security standards
• Simplifies financial reporting and auditing processes
• Supports integration with other business systems for seamless operations

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