“Don’t Worry, Bill Happy” series—created with thanks to Bobby McFerrin—is a “back to basics” look at foundational components of modern billing systems and processes and how the Gotransverse platform makes even the most involved billing needs easy. This week, we take a look at complex billing models.

While subscription and usage-based services were, once upon a time, novel nice-to-haves that set some businesses apart from their competitors, these models are now critically advantageous offerings in just about any industry. Subscriptions provide businesses with predictable, recurring revenue—great for forecasting finances and enticing investors—and customers with convenient, ongoing access to their favorite products and services. Meanwhile, usage-based models eliminate the revenue ceiling and encourage new customers to come aboard with lowered barriers to entry while providing customers maximum value by allowing them to pay for only what they use. Both models are win-wins.

But here's the catch: to truly embrace and benefit from subscription and usage-based models, businesses must let go of their homegrown, legacy, or otherwise outdated billing platforms and adopt a system designed with the complexity of these models in mind. Because, with so many variables, variations, and different inputs, usage-based models require sophisticated real-time data management that traditional systems weren't designed to handle. And while subscription models are a powerful driver of predictable, recurring revenue, they’re far from the “set it and forget” simplicity many businesses expect them to be. And when a business takes that simplicity for granted, the only thing the subscription model will drive is churn.

Features to Look for in a Billing System that Supports Complex Billing

So, what are the complexities a billing platform must handle to support these models? Let's take a look at just a few:

Internal Transparency & Automation

Complex billing transactions require input and effort from a wide range of business departments: the sales rep who provides the initial quote, the legal team who puts the finishing touches on the contract, the fulfillment team who ensures the client receives the goods or services, and the finance team who sends out invoices and collects payments, for starters.

When these teams operate in silos, communication breakdowns can lead to errors, delays, and unhappy customers. For example, maybe the sales rep offers the client a discount for the first three months, but that information is lost or muddied somewhere between the sales office and the finance desk. Either customer doesn't receive the promised discount and feels lied to, or the discount stays active after it should've expired, and the company experiences revenue leakage.

A complex billing model requires complete transparency among different facets of the business and automated workflows that minimize the risk of data duplication, missing information, or other potentially costly errors. While outdated and legacy billing platforms often struggle to offer these features—especially as customer volume increases—an agile billing platform designed with growth in mind can be a powerful asset to a subscription-based business.

Real-Time Data Mediation

With complex billing models, usage data comes in many different formats, based on the type of billing model at play, the specific rules governing it, and any special arrangements (such as discounts) any given customer might have. To calculate revenue and provide the customer a clear invoice, disparate usage data has to be converted to pricing. That’s where mediation comes in, normalizing the data and feeding it to the rating engine, which then turns it into a bill.

Traditionally, mediation has been done manually or by add-ons to legacy systems. And while that works just fine for a business with simple billing models and low usage volumes, as models become more complicated—and volumes increase—manual processes and inflexible, old-school systems can't keep up. They're no longer efficient, and there's too much risk for error.

The mediation process has to be more efficient to optimize back office workflows, improve customer relationships, and bolster revenue. Sophisticated intelligent billing platforms automate the process, improving the billing experience for businesses and customers in several ways.

Flexible Product Catalog

Complex billing models—and the growth plans that come with them—typically involve new products, services, and offering bundles, which means you’ll need a product catalog that’s easy to update as you adjust your offerings. While legacy and manual billing systems require a billing specialist and manual intervention to update the product catalog, an intelligent billing platform’s product catalog should be flexible enough to support evolving offerings. Manual updates often lead to SKU proliferation, customer confusion, and missed sales opportunities. But when you can automate the process of updating pricing and invoicing as you update your catalog, you minimize data redundancies, delays, and errors, empowering your business to roll out new products and services more quickly than your customers expect them.

Ultimate Agility

In an environment where the only certainty is change, businesses that want to succeed must be agile enough to pivot on a dime. Should a global pandemic, for example, turn the market on its head, that steady subscription may no longer be a viable option for many loyal customers. Or in an economic downturn, where customers are tightening their belts as much as possible, current usage-based models may need to give way to different approaches, bundles, or pricing strategies. A business that can pivot its offerings, prices, and models quickly is much better equipped to stay afloat than one whose only option is to stay the course. Again, manual processes, excel spreadsheets, and outdated billing systems are a true liability in times of disruption. On the other hand, the right systems empower businesses to be flexible and agile, easily keeping up with whatever the market throws at them.

Make Complex Billing a Breeze with Gotransverse

While there’s no denying that businesses and customers get more value from subscriptions and usage-based services, the reality is that these require billing platforms capable of managing complex billing models. The Gotransverse platform is designed with these models in mind, taming complex billing through automated workflows, sophisticated usage and rating, transparency throughout the quote-to-cash process, flexible product catalog, and so much more. To learn more about how Gotransverse supports clients in every industry as they achieve their growth goals through complex billing, we invite you to take a virtual tour of our platformtoday. Then, when you’re ready, request a demo, and one of our experts will be glad to walk you through our platform and processes.