How B2B SaaS Businesses Can Automate Their Billing Processes

Software as a Service (SaaS) solutions have become indispensable for modern businesses, from Salesforce reshaping customer relationship management to HubSpot redefining marketing automation. This shift from traditional business software to cloud-based, subscription-driven software reflects the growth of the SaaS industry.

A recent report shows that the average spend per employee in the SaaS industry is expected to reach $220.30 in 2029.

The SaaS model offers different benefits, such as reduced upfront costs and scalability. However, it presents unique challenges, especially when it comes to billing.

B2B SaaS businesses often struggle with usage-based billing and the need to manage recurring payments for a large customer base. These difficulties can lead to billing errors, revenue leakage, and customer dissatisfaction if not managed efficiently.

As a result, B2B SaaS businesses are embracing automated billing solutions. These technologies can eliminate incorrect calculations, send invoices promptly, and improve cash flow.

In this blog post, I’ll explain how B2B SaaS businesses can automate billing.

Let’s jump right into it!

How B2B SaaS Businesses Can Automate Billing in 7 Easy Steps

Automating subscription-based billing doesn’t have to be overwhelming. Here’s a step-by-step guide on how B2B SaaS businesses can automate billing:

Step #1: Implement Subscription Management Software

Subscription management encompasses the systems used to manage the entire lifecycle of customer subscriptions. This includes initial sign-ups, renewals, upgrades, downgrades, and cancellations.

For B2B companies handling various operational aspects, like remote marketing teams, platforms like Chargebee and Recurly can be useful. They’re designed to handle recurring billing, everything from invoicing and payment generation to plan management.

For instance, these platforms can generate invoices based on the customer’s preferences and apply the necessary taxes. They can also send notifications for failed payments, reducing the need for manual intervention.

Step #2: Set Up Automated Invoicing

According to the Younium, you can automate billing process and generate B2B SaaS businesses invoices. Customers can get invoices on a regular schedule, whether monthly or annually for better revenue growth management.

You can customize your invoice to include details such as taxes and discounts. Most subscription management software allow you to create a template and they handle the rest automatically.

This automation reduces the error caused by manual data entry. Also, the same rules and templates are applied across all invoices. This showcases consistency and professionalism.

Step #3: Integrate Payment Gateways

Integrating your billing system with a payment gateway allows you to process transactions automatically. Platforms like PayPal, Stripe, and Square are popular payment processors you can check out.

Most of these platforms offer recurring billing, allowing you to set up automatic payments for subscription services. This ensures your business collects payments based on the customer’s subscription schedule.

Here’s an example of a gateway that permits recurring billing:

Before choosing a payment gateway, ensure you’ve developed an information security policy for your business. This will prevent data breaches and build trust with your B2B customers.

Step #4: Select Accounting Software

After integrating your payment gateway, you need to carefully select accounting software. Some examples of accounting software for B2B businesses are QuickBooks, Freshbooks, and Xero.

Before choosing accounting software, consider the following:

• Compatibility: The software should be able to handle your subscription billing cycle
• Data Sync: It should automatically sync customer, billing, and payment data with the subscription management system
• Financial Reporting: It should provide robust reporting tools, allowing finance teams to track revenue metrics
• Scalability: As your B2B SaaS business grows, the accounting software should accommodate increasing transaction volumes
• Integration flexibility: The software should offer open APIs for integration with your existing tech stack

Also, go for accounting software that automates tax calculation and filing. It helps you to stay compliant with tax regulations, keep up with changing laws, and ensure your filings are accurate and timely.

Step #5: Leverage CRM Systems

Customer Relationship Management systems aren’t just for managing customer interactions. They can easily integrate with your billing system, allowing you to set up automated reminders for upcoming payments, renewals, or subscription upgrades.

You can integrate these CRM platforms with the customer and client portal software to allowing customers to access their billing information and manage your customer effectively. They can also view previous invoices, update payment details, and manage subscriptions in real time.

Automating the client-facing aspect of your B2B SaaS business can drastically reduce your team’s workload. It also improves customer satisfaction, reducing the chances of missed payments.

Step #6: Automate Dunning Management

Dunning refers to a series of communications with customers to collect outstanding payments. Automating this process helps manage accounts payable more effectively. In fact, it’s one of my favorite tips for how B2B SaaS businesses can automate billing.

An automated dunning management solution ensures that you recover as many payments as possible without manual follow-up. SaaS dunning management platforms like Baremetrics and Chargebee can send automated notifications to customers with failed payments.

They also include features like multiple payment retry attempts and customizable email sequences. You can configure the system to suspend accounts for non-payment and reactivate them once payment is received.

Step #7: Monitor and Optimize Billing Automation

Finally, all the systems I mentioned in this post offer analytics and reporting, from subscription management to dunning management software. They can provide valuable insights into your business financial performance.

Look for metrics like churn rate, revenue, average time to payment, and payment success rates. These insights can help you identify areas for revenue growth.

For instance, from your dunning records, you can know the number of declined payments, suspended accounts, returning subscribers, upgrades, and downgrades. This can help you strategize when to offer discounts and promote add-ons.

Conclusion

There you have it — seven of my top tips for how B2B SaaS businesses can automate their billing. Implementing subscription management software, a payment processor, and the right CRM system can streamline your billing processes.

Don’t forget to monitor and optimize your processes regularly to drive sustainable revenue growth.

I’d love to hear from you. What are the biggest challenges you face with your current billing process? How do you think automation could help address these challenges?