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Blog/ Mar 9, 2021

5 Best practices for SaaS billing

In the last few years, we have seen an enormous shift in the way SaaS companies carry out their billing processes. While many software companies once held a one-time purchase approach, the landscape has evolved. Many businesses are choosing flexible subscription and usage-based billing models as they offer several benefits including a steady stream of recurring revenue.

SaaS businesses are scrambling to reap the benefits of an automated billing system, and analysts suggest 53% of software revenue will be generated from subscriptions by 2021. If you’re reading this article, you may be considering automating your billing, and gaining insight into how your customers are using your products. Keep reading to learn how automated billing can help transform your billing function into a strategic advantage.

We will walk you through the SaaS billing best practices that are sure to set you up for success

 1. Choose a simple pricing model

You created a product that solves all the pain points of your target customer. It’s easy to use and a far superior product compared to your competitors. Your prospects still overlook your SaaS product. Is this something you recognize?

Far too often a complicated pricing page can confuse your target customers and pushes them towards considering your competitors. So, when deciding on a pricing model for your SaaS business, always choose a model that is simple and easy to understand for your customers. 

Your pricing page should clearly showcase your product features and how much your customers will pay for each plan. Do not make the mistake of confusing your customers with too much information. 

Are you unsure about how to price your SaaS product?  Check out our handy guide to SaaS pricing models to help you decide the right pricing model for your business.

 2. Up and cross-sell opportunities

When launching a new product,  one of the best places to look for prospects is your existing customer base. If you provided an exceptional service, your current customers are more likely to re-purchase from you. Don't miss the chance to upsell your new products or services, especially if they cater to your customer’s needs.

You gather a lot of insights about your customers by monitoring their usage, these insights can help you identify the right product, at the right time, for the right customer. Use your billing as an opportunity to upsell new products or services to your existing customers.  Design and brand your invoices to create rich upsell communications.   Customize your SaaS invoice template with the data that is most important to your customers like itemized subscriptions, grouped usage charges, etc.

3. Reduce customer churn

Gaining a new customer can cost five times more than retaining an existing customer, so it makes sense to retain existing customers by providing them with incentives to stay. As a SaaS business, you have a vast amount of consumer insights to help you correctly predict customer trends, change your product or pricing to suit customer needs, and provide offers and discounts to entice your customers to stay. 

With recurring billing, you can automate your dunning and collections, while sending intelligent right timed messages to your customers with timely reminders for high usage or upcoming payments and renewal. 

   4. Use billing insights to forecast revenue

Your system collects a lot of data regarding your customers, and their usage over time. A thorough analysis of this data will help you gain insights into customer behavior and make meaningful predictions taking into account things such as seasonality. 

This data may also help you identify untapped opportunities and forecast future trends. Over time this data is also key to optimizing the evolution of your pricing strategy and in many cases the product roadmap. An efficient subscription management system will help you review financial performance, track lost payments, and project revenue through real-time reporting. It provides you access to all this information in one place, giving you the ability to make informed decisions based on the most accurate information. 

5. Plan for limiting revenue leakage

If you have switched to an automated billing system, you have already taken the first step to limiting revenue leakage. However, in order to ensure that you have an efficient system that eliminates revenue leakage, make sure you have these guidelines in place. 

  • Have a process in place to send reminders to the customer about upcoming payments
  • Notify customers about expiring credit cards
  • Send automatic notifications when a credit card is declined
  • Automate invoicing and payment collection
  • Ensure your vendors are billing you correctly with revenue assurance reporting 

Choosing the right subscription billing software is an important step in streamlining your billing operations. A capable subscription management service will eliminate the struggles associated with manual billing processes enabling you to focus on your business and enhance your customer experience. An intelligent billing system will also have the agility to grow and scale with you and introduce new billing models down the road to meet customer demands or market trends, without incurring huge costs and spending long hours on development work. 

LogiSense is a reliable and scalable SaaS billing solution that can help you streamline and automate your billing process to perfectly fit your business needs. Contact one of our billing experts today to talk about your unique billing needs 



About the Author

Ryan Susanna /

Ryan is a seasoned telecommunications expert with a broad background in both the service provider and software vendor sides of the business. Ryan is currently responsible for worldwide sales at LogiSense. During his tenure, Ryan has held executive level positions including Senior Sales Executive, and Director of Sales. In these roles, he has provided strategic sales, product, and market guidance for our next generation IP service management solutions.


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