The Best SaaS Billing Practices

The Benefits of SaaS Billing Software

One of the biggest challenges facing modern SaaS businesses is ensuring accurate and effective billing. Unlike bricks-and-mortar premises, where every item can be individually barcoded and priced, the licences and access privileges involved in SaaS tend to demand flexible billing and a variety of payment vehicles. Knowing how to bill for SaaS has become increasingly challenging, but solutions exist in the form of SaaS invoicing software.

SaaS billing challenges

To resolve an issue, we first have to define it. And today’s online-only market poses a variety of challenges compared to the one-time purchase model of the past. 

  • Subscription models can range from annual to monthly, from one-time to recurring, and from single-license to multiple-device or multi-user accounts.
  • Many SaaS firms offer discounts and incentives to encourage renewal or loyalty, creating a variety of different payment tiers for the same package or offering.
  • The modular nature of applications like website design means customers may add extra services spontaneously, paid up front or added to their next bill.
  • Data may be charged based on units or consumption—the difference between annual licences and pay-as-you-go contracts.
  • Customers on a rolling contract will expect renewal payments to be taken seamlessly, without even having to think about doing a transaction.
  • Expired card details lead to failed payments, which may either be overlooked or result in account suspension when a quick update is all that’s required. 

Manually processing an array of SaaS payment plans would be a logistical nightmare, especially as a company expands and diversifies. It would inevitably lead to revenue leakage through unbilled services and lapsed customer accounts, potentially causing frustration (and damaging the brand’s standing) among consumers who were being incorrectly charged.

As a result of these challenges, SaaS invoicing software has grown in popularity. Firms like Goolash have developed software that streamlines billing processes and instantly maximizes revenue. In doing so, the process of online billing has been greatly simplified, with actions automatically occurring in response to upgrades, cancellations, and ad-hoc purchases. 

How does SaaS billing software resolve these issues? 

The above points all involve divergence between what customer A pays and what customer B pays. That would be a headache to calculate manually on a spreadsheet. By contrast, letting automated software decide how to calculate SaaS billings removes the manpower element almost entirely. It ensures far greater accuracy, since human error is eliminated as far as possible. Different billing periods can be offered across various currencies, integrating any discounts or free trials which may have been offered. 

The best SaaS billing software can instantly calculate issues like regional taxation, once the appropriate formulas have been entered. They can also incorporate pricing changes, enabling firms to develop new pricing models in minutes rather than laboriously having to change multiple spreadsheets. This makes it child’s play to introduce coupons or discounts, run time-limited sales, and even target deals for specific plans or clients. 

What is SaaS billing going to do for my business?

Every business will have its own back-office functionality, and SaaS billing software should make it easy to import documents like Excel or CSV files. Once any markups have been applied to the relevant fields, these files can be imported into Goolash. Our proprietary Autotask software calculates who should be billed for what, generating invoices according to usage in real time. If a product isn’t being billed for any reason, an automated alert will be sent, while advanced reports can be distributed on a daily or weekly basis. 

These insights make it easy to spot potential challenges (or opportunities) caused by changes to client behavior. If customer X has stopped making in-month purchases, this can be quickly identified by SaaS billing software. Staff can reach out to see if the client needs assistance, encouraging them to redirect lapsed spend toward other services. It also minimizes involuntary client churn and maximizes flexibility—overlooking unbilled subscriptions on compassionate grounds, or providing free licenses as a referral incentive. 

Service with a smile 

Having established how automated software optimizes income levels, it’s worth considering some of the real-life benefits. One Goolash client discovered they were losing €13,000 a year in unbilled licenses alone. Removing the need to know how to calculate SaaS billings (or how to bill for SaaS activity) frees up staff to concentrate on areas like account management, new customer targeting, and so on. Redeploying resources can further optimize profitability. 

Offering compatibility with Microsoft 365 and Google G Suite, Goolash integrates with Datto and will soon be Azure-compatible. Read about our growing roster of third-party integrations on the Goolash blog, or get in touch with us to discuss a https://app.goolash.io/trial

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