What is subscription billing?
Subscription billing is a process of charging or billing your customers for the services you have been offering them repeatedly. Most businesses like to bill their customers for monthly, weekly, or yearly plans.
The main objective of subscription billing is to help your business collect regular payments from customers, identify customers that the business needs to bill and determine how much should be billed. It should also focus on how to report subscription billing information for analytics and accounting purposes.
There are many companies like Rebar Technology that can help your business to get the best subscription billing services. When choosing a platform for subscription management services, you have to consider the following factors.
1. The flexibility of the billing system
With some billing systems, it can be so challenging to handle your customers, business, and business models dynamics. It is even more challenging to implement new ideas and grab new opportunities that come up in your industry. Therefore, you have to choose a less rigid billing system that will help you cope up with all these.
The system you opt for should be more flexible. For instance, it should act accordingly when the user declines to pay for their subscription. If you choose an inflexible subscription billing system, you reduce the amount of revenue your business collects from customer billing.
2. Always plan ahead
Which kind of subscription model do you want your business to have? It would help if you start by having an outlook of your subscription business and using that to choose the best subscription billing service.
Specify the amount you want to be collecting from your customers – like say $40 per month. You can then do some calculations to determine if that is the most straightforward subscription plan for your business model.
An active subscription plan should proliferate when it is faced with market demand and real customers. Choosing the right subscription billing system helps you to cater to corporate clients and meet stiff competition. It should also be flexible enough, for instance, when your marketing team intends to introduce bundle pricing for new products.
3. Communicate with your customers
If you choose a subscription billing that doesn’t match your customers’ expectations, then you are wrong. Go the extra mile and ask your customers what they think about your billing.
Your pricing quote and website should answer all the questions that customers may have about your services such as what services are you charging them and when are you charging them for such services.
In case you opt for recurring pricing, you should come out clear on the following for your pricing:
- Usage charges; what are the overages, and when are you charging them.
- Incurring/ subscription fees – specify the date for your subscription billing. Does it begin on1st and end on 31st, or you have some arbitrary dates?
- Initial charges; determine all the setup and activation fees that you may be charging for your product or service.
Whichever subscription billing service you choose, you must ensure that it helps you communicate with your customers. If you are offering a variety of products, you should know that most customers are only familiar with a particular product you are offering.
Therefore, if a customer is interested in one specific product, then you should ensure you avail all billing information to them. Don’t rely on credit card statements as the only means of communicating to customers.
Provide your customers receipts through direct emails or when they ask for them. This will help the customer have a breakdown of how you are charging them. Receipts also help customers to keep a record of their financial transactions.
4. Process requirement
A billing system features a lot that most businesses tend to ignore when choosing one. Before choosing subscription payment services for your business, you should find out if your business is having any financial management issues that affect your billing.
For example, do your customers demand cash receipts or do you need sales analysis for the billings?
Always ensure that the billing system you opt for caters for all the underlying financial and accounting processes like financial reporting and sales analysis.
Sometimes your customers may look forward to upgrading or downgrading their subscription. It is only easier for them to do this if you have a more flexible subscription billing system in place.
To make you customers feel free to adjust and enjoy new plans that you offer, you should choose a billing model that helps customers to manage their subscriptions and select the packages they want. It can help you reduce billing support inquiries from customers that want to migrate from one package to another.
5. Customer support tools
When choosing a subscription billing system for your business, you should go for one that supports account modifications in real-time. That means, if your subscribers ask you to modify their accounts, the system should be able to respond accordingly.
If something goes wrong with subscriptions, some customers will expect you to refund them. With the best customers support tools on the billing system, your customer support team can respond fast to all customer complaints helping you to keep happy and loyal customers.
A quality billing system or model must support account modifications and help you to reduce charge-backs from customers.
A sound billing system should help you to retain your existing customers and grow your business through effective revenue collection. Therefore, it is vital to consider the hidden attributes of a subscription billing system before you install it into your business.
When integrating subscription software management, you should work hand in hand with your team and offer them training to help understand how to use the system.
Choosing the best billing system or software for your business is not a walk in the park. You have to be extra careful when choosing the best subscription billing system, and these five factors form the core of what you should consider.