What is Recurring Billing?
Recently described as the digital economy’s ‘new black’, recurring billing is a term that you may or may not have heard of, but whether you’re familiar with the parlance or not, it could be very important to your business.
Essentially, recurring billing is the process of making sure that subscriptions to your product or service are billed accurately and on time, so that your customer can trust that you’re always charging them correctly.
Helping to ensure strong customer service and the development of a more trusting relationship, it’s absolutely essential to get it right for any business or enterprise that utilizes subscriptions.
How Does Recurring Work with Your SaaS
If you’ve ever stumbled across terms such as ‘recurring invoice’ or ‘recurring payment processing’, the likelihood is that you’ve asked yourself a simple and obvious question: ‘what is recurring billing and why does it matter to me?’
While we’ve tried to give you a reasonably informed explanation of this above, you might, nonetheless, be wondering how important it is to your enterprise, and if you’ve ever utilized a subscription model, the answer is ‘very’.
The latest trend in the digital economy, recurring billing has the potential to support and enhance your endeavor in numerous ways, from ensuring greater accuracy with regards to your accounting, through to helping you to develop a more trusting relationship with your customers.
If you’re a SaaS business, or are planning to become one, it’s especially important, and that’s because of a common issue you’re likely to encounter: developing an effective pricing strategy.
If you’re asking yourself a question such as ‘what is SaaS’, then it’s less likely you’ll need to understand its intricacies, but if the term is one you recognize in an instant, we’d most definitely advise that you keep on reading.
That’s because automatic recurring billing and other forms of online invoicing software are the very best ways to support your pricing model, and ensuring a good level of customer service and ongoing accuracy with regards to your billing.
Indeed, those who fail to use them are likely to find that their billing efforts simply can’t keep up with their business growth, leading to a scenario where the entire process becomes much more difficult and complex than it needs to be.
Recurring Billing as Business Fuel
According to the experts, its ability to streamline and simplify the subscription process means that recurring billing is best viewed as fuel for your business, keeping it operating smoothly and preventing it from stopping and running out of steam.
When we ask ourselves questions such as ‘what is recurring billing’ or ‘what does recurring billing mean’, these are sometimes best answered not with a mere explanation, but with examples of what this kind of software can do for your enterprise.
Essentially, a normal bill is a simple document, indicating key details such as money owed and discounts and taxes applied. With a SaaS recurring revenue scenario, however, you have a lot more data to deal with, such as discounts and coupons, global taxes, localization for language, payment methods, and proration, to name but a few.
On top of this, there are a number of post-invoicing necessities for you to take care of, from targeted transactions and customer emails, through to issuing refunds or credit. In all of these scenarios, recurring billing can prove invaluable.
How Recurring Billing Complements Different Pricing Models
One especially important feature of recurring billing software is its ability to complement various pricing models. This is handy because there are several different types of SaaS pricing strategies that you might opt to use, depending upon the vagaries of your business.
For almost all of these, recurring billing can come in handy. This means that, should you adopt any one of the following payment plans, cloud invoicing software is almost certainly worth looking into.
- Usage-based billing: Charging customers post usage, based on their daily, weekly, monthly, or even yearly uptake of your product or service.
- User-based billing: Billing based on the volume of ‘seats’ that are serviced.
- Tiered billing: Billing according to the different products or services that are used/included in the customer’s bundle.
For those who use any of the above models, recurring billing systems can help to avoid unnecessary complexity and make the overall process smoother and more streamlined.
Interested in knowing more about invoicing software for small business, and how our recurring billing solutions could be of benefit to you? Then take a look through or products and pages today!