Businesses that generate recurring revenue such as, software as a service or subscription, offer more benefits than the usual transactional sales model. They incorporate steady cash flow, long-term relationships with customers, and greater company values. However, in addition to the benefits, there are distinct challenges also. These models need various marketing plans, modified sales strategies, and an entirely new set of Key Performance Indicators (KPIs). Repeated revenue also affects billing, causing trouble for accounting personnel.
Frequency, Complexity, Inefficiency
In the conventional model, a sale includes a single transaction and is either billed altogether or gradually as particular deliverables are finished. But in a repeated revenue operation, a single sale reflects multiple transactions billed at constantly recurring periods over an indefinite time span. Buyers are billed more often in this model, usually on a monthly basis. This maximizes the whole billing volume, and results in extra work for accounts receivable (AR).
The rating method of recurring revenue business also mixes up the billing procedures and revenue recognition. Strategies that represent inconsistent price structures, specifically based on volume, tiered or customer-centric rating, demand additional effort to make sure customers are priced at the exact rate. Billing buyers for time or usage is difficult as both the quantity utilized and the price paid can alter monthly. As billing requires to represent beginning and end dates, the marketing discounts and offers add more difficulties.
Ineffective manual operations may be the greatest hindrance for managing recurring billing efficiently. Analyzing numerous customer accounts each month further, computing and entering the exact price is time-consuming and tedious. As a company receives more customers, they are compelled to add more workers to manage the extra billing volume. This hiring raises functioning costs and will not be able to sustain in a competing labor market.
Laborers are destined to do much of their work with the help of spreadsheets, as the basic accounting system does not support tracing of promotional periods, application of various pricing models, or carrying out other operations distinct from recurring billing. Storing data in spreadsheets, instead of accounting system fails the business leaders in getting exact and instantaneous view of financial operations.
The best technique to beat these challenges is to automate the recurring billing. Automation streamlines the billing operations, saving time and ensuring accuracy through removing manual tracing and rate calculations. An automated solution also stores customer data, rating, and other vital information together, enhancing data quality and financial visibility.
Automate Recurring Billing with NetSuite
NetSuite facilitates billing processes to be simple and more effective, offering instantaneous visibility into billing and financial operations over areas like monthly revenue, complete contract value and customer attrition. From combined invoicing, to automated pricing operations, to assist multiple rating models, SuiteBilling offers visibility around every billing process. Flexible choices give businesses the option of billing subscriptions as either one-time fees or recurring fees, either in advance or in arrears. With numerous pricing models, businesses can make subscriptions that capture arranging fees, license counts and flexible consumption all in single process. The blend of effortless subscription set up and safekeeping, and varying pricing models remarkably enhances billing operation efficiency.
NetSuite customers already realized the productivity of automating standard accounting processes. The integration of SuiteBilling with NetSuite leads in preventing time consumption through automating extra processes and increasing transparency as important financial data is handled in a single place.
Need to know more about automated recurring billing with NetSuite? Meet our experts at Jobin & Jismi for any NetSuite-related enquiries.