Does my business need a recurring billing platform?
So you’re running a recurring revenue business. Fantastic news—subscription businesses have been experiencing exponential growth for quite a while as consumers enjoy their convenience.
What’s less exciting is the work that goes into managing billing and invoicing, issuing refunds, dealing with payments, and more–especially if you choose to do it all manually. By implementing a recurring billing platform, however, you can sidestep many issues that would crop up with a piecemeal approach.
What is a recurring billing platform?
Recurring billing platforms offer automated billing software to streamline the routine aspects of the billing process, removing the need for time-consuming, manual intervention and helping you:
Grow faster by iterating, experimenting, and adapting quickly without draining your own engineering resources.
Grow smarter with data-driven insights to capture more business and advanced revenue optimization built on machine learning to keep more revenue.
Grow stronger by managing subscriptions at scale, anticipating challenges, and tackling problems before they even pop up.
Automating and optimizing your processes can let you focus on your core product–we’ll go into more detail later. But first, how do you know if it’s actually what you need?
Signs you need a recurring billing platform
While automatic recurring billing makes sense for many companies, here are some signs that your company could benefit from it.
You’re starting a subscription business
It’s hard enough to figure out how to start a subscription business. If you attempt to do it without automated billing management, you’ll likely find yourself way in over your head. Those early days are better spent focusing on high-level strategic considerations rather than chasing down late payments.
Scentbird’s build versus buy story is the perfect example. A U.S.-based subscription service for perfumes and colognes, they needed to optimize their payment processing times and considered building their own solution.
Quickly, they realized the financial and technical investment would be more than they could handle. After a thorough vetting of options and deep analyses, they realized that building their own solution was out of the cards and discovered that Recurly was their best choice.
You’re drowning in spreadsheets
As mentioned earlier, a piecemeal approach is an alternative to a subscription billing platform. What does this look like? Your teams will handle billing with spreadsheets. Potentially a lot of spreadsheets.
There’s no way to quantify how many is too many spreadsheets. If your finance and accounting staff is overwhelmed, you need to look for a recurring billing platform–which can drastically increase your efficiency and ability to have accurate books and numbers.
You’re struggling every end-of-month close
Even if you’re only offering one subscription plan and pricing tier, you’re still going to contend with different events. With a manual process, it’ll be time-consuming to accurately reflect upgrades, downgrades, pauses, and cancellations in your books.
Recurring billing platforms feature several integrations and reports to help you close the books faster at the end of each month, so you can spend less on manual processes and more on helping your business grow.
You’re manually retrying payments
Determining the reasons behind failed credit and debit card payments doesn’t seem so complicated until you start doing it.
With over 2,000+ different card payment error codes associated with failed transactions, a manual approach to retrying declines or gathering new payment details is unrealistic for any size company in this day and age.
You’re unaware of your business trends
An automated billing system can help you measure key subscription business model metrics, presenting you with actionable insights to help spark a new growth strategy for your company. If you don’t know how much it costs to acquire a new customer, for example, that’s a sign that a recurring billing platform could be very helpful.
The ideal recurring billing platform
Like many other subscription businesses, if you have decided to rely on a recurring billing platform rather than building your own, then the next step is to look for a platform that fulfills your business needs. Essentially, you want to find a system that will make life easier for your teams.
Gets you up and running quickly
Subscription businesses need to test and optimize fast for positive downstream revenue impact. The ideal software is an easy-to-use platform that gives you the flexibility to iterate, experiment, and adapt with clicks-not-code customizations, 1-click integrations, auto compliance, and low system admin costs.
Has revenue recovery capabilities
A first-rate automated billing platform has a revenue recovery process in place to reduce involuntary churn.
For example, Recurly’s Account Updater monitors customers’ credit cards for changes and updates them as necessary. From there, intelligent retry logic determines the frequency and schedule of automatic retries based on when they are most likely to succeed.
Dunning is often the last step in the revenue retention process—online payment email reminders are sent to customers on a predetermined schedule.
Meets privacy, security, and compliance requirements
Look for a vendor with a global presence and ask whether they are aware of regulations that will impact your business. While there will be differences in regulations across countries (e.g., GAAP), it’s easy to overlook potential differences within each country.
Not all regulations are created by governments, though–credit card companies issue Payment Card Industry (PCI) standards to protect their customers’ data, and compliance is based on your transaction volume.
Grow stronger and be ready to scale without limits: Learn the best retention strategies to never lose a subscriber with Theresa Mcendree, Chief Marketing Officer at Recurly, and Kathy Sexton, Chief Executive Officer at Subscription Insider.
Seamlessly integrates with your existing tech stack
It’s not just about the solution itself but how it integrates with your existing tech stack. Ask prospective vendors whether their solutions will work well with your current accounting software, tax, and fraud solutions. Recurly, for example, offers a wide range of integrations.
Provides actionable insights for decision-makers
A top-notch recurring billing platform will provide a wealth of key features and useful business analytics tools, giving you insight into subscriber retention, promotional campaign reporting, and overall financial health.
Let’s say you want to analyze customer churn, which is perhaps the most important metric for a subscription business. A proper analysis requires a number of calculations—and subscription billing software can do them for you.
The next step is to determine how to reduce churn. There are two types of churn: voluntary and involuntary.
If your customers are voluntarily leaving, your pricing or product could be at fault, and that will require a strategic adjustment to bolster customer experience. If, on the other hand, you are experiencing high involuntary churn, your billing system—not your company—may be the culprit.
Experience with subscription businesses
Expertise matters in subscriptions. Working with an experienced partner that offers industry benchmarks for growth is key. That’s why everyone from Paramount+ to TIME to BarkBox all turn to Recurly to drive innovation and growth.
How to choose a recurring billing platform
There is no shortage of platform choices; how do you know which one is right for your subscription company? Start by looking at your own needs.
Your accounting and finance teams are in the trenches, so you want to ask them where they require the most help with billing automation. They may need help automating order-to-cash, dealing with complex tax scenarios, and fighting billing fraud, to name a few possibilities.
However, a key consideration for all companies is the time it will take to get up and running. You don’t want a platform that will take forever to implement, slowing your business down and keeping your staff saddled with more work than necessary.
Once you’re up and running, you want to be confident that this platform will save you money. It’s not enough for a vendor to say that they will reduce involuntary churn—ask for hard numbers. For example, on average, Recurly’s customers recover 79% of at-risk invoices.
While the time to implementation and revenue recovery evaluations will be relatively straightforward, the billing model support will require deeper consideration. At first glance, it may seem simple—get an automated billing system that supports your billing model.
In reality, it’s more complicated because you have to consider your potential future billing strategy. You don’t want to constantly switch recurring billing systems based on your growth and evolving product strategy. For that reason, it’s better to overestimate your potential needs, if anything.
Leverage our subscription and billing solution evaluation worksheet during your evaluation process.
Put payment success on repeat. Keep a good thing growing.
If you’re still wondering if a recurring billing platform is a right choice, you may take comfort knowing that leading brands across all industries are reaping their benefits. Just look at what our customers have to say:
“By unifying on a single subscription platform, we were able to become more efficient by creating a community of subject matter experts within the division.”
— Stephen Comstock, CIO, Paramount+
“One of the key reasons why we're able to get where we are is that we are very fast to react and also very flexible. Recurly plays a huge part in that.”
— Anton Jusufi, Director of Product Management, FabFitFun
“After implementing Recurly, Output saw an astounding 45% decrease in card declines.”
— Brian Zarlenga, General Manager, Output
It’s challenging to run a successful subscription business in a fiercely competitive global marketplace. If you’re taking a disjointed approach to billing, you’re putting unnecessary obstacles on the road to success.
A recurring billing platform can be a game-changer for your company—helping you keep growing the lifetime value of every subscriber.
