A GUIDE TO THE SAAS BILLING AND HOW IT IS DONE!
Many of the software are being utilised by industries in their business models to solve common issues and make work easier. When it comes to subscription billing, one commonly used software is SaaS which many companies are commonly utilising. The SaaS billing Software provides numerous benefits to billing systems and industries. If the business grows, managing the subscription can be challenging and time-consuming. Therefore, there is high demand for SaaS billing Software by industries. This article will help us understand what is SaaS billing. And how it is billed.
What exactly is SaaS Billing?
Automatic billing software generates the bill and all the data by tracking the payment, sending it to the customers via notification, and automatically generating invoices. This software automatically generates the bill and sends it to the customer via invoice. As we have seen what is SaaS billing, let’s see how it is billed.
How is the SaaS Billed?
It involves the annual as well as the monthly recurring payments. Some companies offer the choice between these two. It depends on the company what is best suited for their company and the customers. The SaaS billing Software is based on five different models, which are given below:
● Flat Rate
It is done when the organisation charges the same amount to each customer for its services and products. The main benefit of employing this model is that it is simple to calculate the revenue. Apart from this, it has some cons, like it does not provide flexibility when scaling up the business.
● Tiered
It is among the best model of SaaS billing. In this, the organisations make tiered prices of the product. Every tier of this billing system provides limited features at different prices. It allows the customer to switch between different tiers easily. It all depends on the requirement of the organisation.
● Per-User
This type of pricing involves setting the prices depending on the user number. This means that if there are many users, the price will have many tiers to choose from, and the price will be reduced. For instance, if an organisation provides a plan which will cost around $1000 for five different users. That means it will be $20/per individual to utilise the product at full capacity. But for the next 5 to 10 customers, it will be increased to $200.
● Feature-Based
It depends on the Software feature number based on this price is set. The benefit of using this pricing system is that it can generate high revenue. It can also make the process of subscription management easier. The greatest con of using this system is that it does not allow users to select their favourite feature. Also, it is quite expensive.
● Value-Based
It involves setting up the price depending on what customers can pay based on an analysis of the pricing. For this, effective market research has to be conducted to determine the cost. The main benefit of this SaaS billing is to satisfy the demand of every user.
Kinds of SaaS billing
SaaS billing involves collecting the details of users’ payment data and then sending those details for payment processing. Each step of these SaaS billing involves any of the given systems:
⮚ Payment Gateway
It is utilised for sending the encrypted information of the payment card to the payment processor to get payment approval. A payment gateway is important for every company that utilises online payments.
⮚ Merchant Account
Operated businesses need to get a merchant account, whether national or international. This account is required for merchant payment processing. It is a type of account in which, after successful payment, the money is deducted.
⮚ Subscription Management Software
It is required for SaaS businesses. It is a type of SaaS billing system. It improves the workflow of SaaS subscriptions by decreasing the number of time or resources being spent on the management of manual subscriptions.
How to select the SaaS Billing Software
As we have to know, what is SaaS Billing? Now let’s see the best SaaS billing Software. The best SaaS billing Software helps the SaaS-based business automate the billing and managing the scribers. It is also used to enhance the performance of organisations. Simple billing is among the best SaaS billing Software. Some of the key features of the best SaaS billing system are listed below:
⮚ Recurring Billing
It enables the organisation to track down the payment schedule and collects the recurring payments that allow the businesses to handle the revenues.
⮚ Subscription Management
The SaaS billing Software can easily activate or renew the cancelled subscriptions. After activating, it sends welcome notifications, billing statements, and many more.
⮚ Analysis and reporting
The best SaaS billing software properly analyses and reports transaction data.
Summing Up
As we have seen that what is SaaS billing, and how it works? We can conclude that the SaaS software is eliminating the manual billing system. This software helps to generate payments and provides flexibility for payment. It also led to exponential growth.
