We have presented the benefits of billing automation many times in our blogs, and we hope that we have given some insight into the multiple practical advantages of implementing advanced billing automation. But what are the steps one should take to begin the journey to billing automation? In this blog, we discuss the first steps of the project and give helpful insights to know when it is time.
Step One: Set yourself up for long-term strategy
The right billing automation system goes beyond just the invoicing process and puts strategy back in the driver’s seat. The first step is to consider your pricing strategy; does your current pricing model support your goals, or is it time to act?
- What is your pricing based on in the future? Is your pricing agile enough?
- How will you make your pricing more customer-specific when the need arises?
- How often will you launch new offerings, and what role will they play in your revenue share?
Only by anticipating these changes can you estimate what functional capabilities you will need in the future.
Step Two: Define your starting point
Once the pricing strategy is clarified, it is time to evaluate your technical starting point. A full assessment of your existing process, from the rendering of services to the end of accounting, will give a 360-degree view of the process. It is very important to have process and data owners for all needed capabilities, from usage data to accounting.
A robust understanding of your unique circumstances can help you find bottlenecks and identify critical needs, such as managing customer contracts lifecycle. In fact, it is crucial to look at customer contracts when looking into billing automation. From your legacy service contracts to new offerings, from fixed pricing models to consumption-based offerings. Are you able to manage those and cover future needs as well?
Step Three: Consider your source data
Then, evaluate the quality of your existing billing data. You can start billing automation with any quality of billing data, but the scope of the process might differ. Lower-quality billing data, for example, will require a more customized solution that will not only meet you where you are but provide a solution to scale up your data processing capabilities. With billing automation the data quality is part of the process and will improve during time as the errors are corrected on the data source, not on the billing end of the process.
And of course, remember that it is normal for billing data to change over time. A truly flexible solution must cope with these changes and extend to meet ongoing challenges, or you will inevitably cause revenue leakage.
Advanced pricing models often use multiple external data sources. The last step of planning for billing automation is to understand the full extent of your source data. It is therefore crucial to evaluate billing automation options by their ability to flexibly integrate with your data streams.
How do you know it is time?
The right time to start investing in billing automation is when effectiveness is hindered by the existing process. At Good Sign, we refer to the most common of these as the 5 pain points. They include:
- Revenue leakage eating growth and profits
- Too much manual work and slow cash flow
- Slow time to market with new offerings
- Billing process hurting customer satisfaction
- Challenges in transparency and compliance
We can help you determine to what extent each pain point affects your profitability. If you notice these recurring issues, it is a sign that billing automation could be the next best step for your company, and it is time to choose an invoicing system that combines automation, pricing management, data provision, and accounting.
Take us to the test!
If you feel your billing needs will outgrow your current recurring revenue billing solution, or if you are just curious to learn how Good Sign does things differently, feel free to take us to the test! We will gladly take on your challenge and prove to you it can be done, and that the new world lies beyond just subscriptions.