According to Gartner, global end-user spending on SaaS is expected to increase at a CAGR of 19.35% from 2020 to 2022. There is immense upside for SaaS companies, but no shortage of competition.
To capitalize on this growth opportunity, you need to pour your resources into building the best product possible, as well as high-value finance and operations initiatives. Any time spent on tasks that could be automated is time that your staff isn’t spending on what really matters.
Your tech stack can help you automate countless routine tasks, and for SaaS subscription companies, there may be no part of the tech stack that is more important than SaaS billing software.
With SaaS billing software, you can reassign staff to higher-value projects, deliver more value to customers, and see significant ROI.
Without a SaaS billing system, your staff has to manually invoice and bill customers, adjust their subscription plans, and close the books. For any company, that can quickly lead to an overburdened staff. For a SaaS company that is constantly experimenting with new offerings, a subpar solution can force the finance and accounting departments to deprioritize higher-value projects, instead having to focus on day-to-day minutiae.
A SaaS billing solution gives you the ability to deliver a superior experience to your customers. For example, the best SaaS billing solutions allow you to offer free trials for a specific length of time and request payment information whenever you want. You can also offer pause and postpone options with certain solutions.
As a SaaS company, there’s a good chance that you are expanding your offerings or geographic coverage. The best SaaS billing software can increase the chances of a successful expansion. By automating invoice creation and delivery, you can get paid faster, improving your cash position—cash that could be used to invest in growth opportunities around the world. Can SaaS billing software help you to actually enter those new markets? In some cases, yes. Recurly, for example, allows vendors to take payments in 195 countries, and helps you meet both B2B and B2C regulatory requirements.
There may be no bigger source of financial ROI than reduction in involuntary churn, though. According to a study done by Recurly, 75% of SaaS subscribers are at risk of involuntary churn—the highest potential subscriber loss out of any of the industries studied by Recurly. SaaS billing software allows SaaS companies to save many of those at-risk subscribers—more on that in a bit.
Still not sure if you need a SaaS billing platform? Let’s look at a few of the common signs that you need one:
You’re starting a SaaS subscription business: it may seem like SaaS subscription billing software is something to get after your company has matured, but from the moment you start a subscription business, SaaS billing software can make a big difference. If you manage your subscription billing with spreadsheets instead, you’re going to have a hard time getting your startup off the ground.
You have a high involuntary churn rate: involuntary churn accounts for 53% of churn on average. If your rate is similar or even higher, you may need SaaS billing software to bring it down.
You aren’t aware of the high-level trends that are impacting your business: for SaaS companies, the cost of customer acquisition is constantly rising. To create and maintain your business strategy, you need to know how your company is tracking against key metrics.
You are unable to offer flexible subscription billing models: do you feel like your systems can only support a fixed billing model, and it would be difficult or impossible to have a flexible subscription billing model? If so, you could use a SaaS billing solution to easily offer more options.
When evaluating SaaS billing software, you need to consider the value provided by the solution and how long it will take to get that value.
As touched on earlier, involuntary churn is one of the biggest threats to SaaS companies. Look for a SaaS subscription billing solution that has an excellent revenue recovery process with updates, retries, and dunning carried out based on data—not guesswork. Insist on a solution with decline management capabilities that are specifically designed for SaaS.
You also have to consider how the SaaS billing software integrates with your existing tech stack. The software doesn’t work in isolation, so you should ensure that it integrates with your other software, like your accounting and CRM tools. If it doesn’t integrate, your staff could be forced to manually migrate data between platforms.
Finally, there’s time-to-value. What good is SaaS billing software if you have to wait for months before you’re up and running? Look for a typical time to launch of weeks, not months. In addition, ask prospective vendors how they can help you quickly get value from the solution. For example, Recurly has Learning Paths, an onboarding series for new merchants.
Whether you’re in B2B or B2C, your SaaS company can benefit from billing software.
Recurly powers subscription commerce for many leading SaaS companies around the world.
Recurly is the best billing system for your SaaS business because our platform was designed with B2B and B2C SaaS companies in mind—and we continue to add new capabilities based on feedback from our many SaaS clients.
To start, Recurly has a typical time to launch of 46 days, so once you decide to go with Recurly, you won’t have to deal with your subpar solution for much longer. After implementing Recurly, you can use it to improve your business across the world, as Recurly supports over 140 currencies and 18 different languages. With support for flexible SaaS revenue recognition, you can record those sales however you need to.
With Recurly, you unlock countless analytics possibilities, as the software provides you with rich dashboards and simple integrations with Looker and Snowflake. And remember the clear financial ROI of SaaS billing platforms? Recurly’s is crystal clear—in 2019, for example, our software recovered more than 8 times the amount we billed Recurly merchants.
Recurly has an in-depth understanding of the challenges facing SaaS companies, which is why we deliver SaaS billing software that not only works well, but also generates quantifiable results.