When it comes to revenue, new payment models are changing the game for businesses. Subscription-based payment models have been on the rise, prompting businesses to think about new ways to charge customers. Finance Magnates outlines how the growth of subscription billing is largely due to the ease and customization afforded by these models, appealing to a consumer base with varying needs or demographics. Businesses using this model can also develop continuing ties with their clients by offering subscriptions rather than one-time transactions. However, managing revenue from this payment model can be a struggle without the right tools. When revenue recognition, contract renewal, and other procedures enter the picture, it can be difficult to keep track of all important data and standards to ensure proper billing.
Subscription billing software can help businesses streamline their subscription billing journey, regardless of the model. Organizations can focus on core business activities without worrying about billing management by automating billing and revenue recognition requirements with this technology. Here’s what you need to know about subscription billing software and how it helps businesses:
What is subscription billing software?
Subscription billing software is a powerful tool for businesses offering products or services with recurring billing models, like subscriptions, memberships, or pay-as-you-go services. It automates and streamlines virtually every aspect of managing these ongoing customer relationships, making life easier for both businesses and their subscribers.
Here’s how it helps business:
Suited for your needs
Subscription billing management isn’t always one-size-fits-all. Your business may be employing various subscription billing models or multiple contract types that may be hard to manage without the proper adjustments and customizations. Our “A Starter’s Guide to Custom Software Development for Small Business” post highlights that customized software can help you hit the mark by providing solutions for certain business needs in mind. Custom software is often discussed with the customer in mind, but using a customizable system for your business can also help you manage revenue and subscription billing processes. These systems can handle all types of subscription billing models and contracts, and you can make adjustments based on how your business charges customers and earns revenue. It makes finding a solution that works for your company and your payment methods easier.
Managing billing and revenue can become complex without the right tools and technology, taking away time from developing other parts of the business. Subscription billing software helps manage simple and complex subscription billing models, minimizing the time and effort spent on managing recurring revenue. Subscription billing software provider SOFTRAX highlights how this system combines all parts in an all in one platform, allowing you to keep track of revenue recognition requirements and any changes throughout the contract lifecycle. It also supports multiple types of contracts, including perpetual, renewal, and one-time. By automating and managing complex billing, contract renewal management, and revenue recognition, you can focus on growing your revenue instead of focusing on manual processes that are time-consuming and prone to error.
Compliance with revenue recognition standards
Companies often struggle with revenue recognition as revenue must be recorded with the contract and standards, such as ASC 606 and IFRS 15. Without the right tools to manage subscription billing, it can be hard to adhere to the proper accounting standards and ensure total compliance. Subscription billing touches most of the complex parts of the ASC 606 and IFRS 15 standards, so using subscription billing software can simplify the process. By having all the steps to revenue recognition on one platform, reporting can be streamlined and reduce human error. More efficient revenue recognition can save time and resources, benefiting the business and ensuring financial health for the company.
Subscription billing management doesn’t have to be complex and daunting. Subscription billing management can make every step of the process more efficient, so you can focus on increasing your revenue instead of just managing it. Our “How To Solve Problems With Innovative Apps” article points out that many platforms, apps, and software solutions help make complicated aspects of work and life much easier. It’s worth taking advantage of them for your business, especially if you’re dealing with subscription-based models that can be difficult to manage without the right systems.