Why Is Billing Such a Big Deal?

At Gotransverse, we love to talk about the ins and outs of billing. From mining business insights out of mediation data to setting up usage-based models to finding the right monetization model to support growth, no detail is too nuanced for us to dig into. But once in a while, it’s important to come up out of the weeds and remind ourselves of the big picture. So today, let’s explore the one question that drives everything we do at Gotransverse: Why is billing so important, anyway?

Let’s start by making sure we’re all on the same page about what billing really is, then we’ll cover why it matters (including what happens when things go wrong) and how an organization can make sure billing is streamlined and efficient from beginning to end.

What Is Billing?

When many of us think of billing — especially from the customer standpoint — we focus on the moment the money changes hands. We authorize autopay, hand over cash, swipe a card, or type in the number, and that’s all there is to it. While that moment is an important part of billing, it’s just one small part of a much bigger process: “quote-to-cash”. The quote-to-cash process encompasses everything from a potential customer’s prepurchase discussions with the sales team all the way to the moment the finance department records the revenue in their General Ledger system.

In a recent Gotransverse/PwC webinar, PwC Partner Laurie Fleet noted that, because the quote-to-cash process is so all-encompassing, it impacts many departments within an organization, from sales to finance to IT to legal. Billing, then, isn’t strictly the responsibility of the billing and finance teams; rather, it’s a key step in a process in which many organizational teams play a significant role. So, Fleet says, it’s important to ensure billing management is streamlined from end-to-end in order to ensure the process goes smoothly, both internally and externally.

Why Does It Matter?

The obvious reason billing matters is to collect the revenue earned from services and products sold.

As our VP of Customer Solutions Tim Pflugradt says, “Something you don’t bill for is called a hobby.”

This is the core function of billing — to make collecting revenue simple, prevent revenue leakage, and ensure no money is left on the table. But there’s much more to it than that. For example:

• Enabling Better Business Decisions: Throughout the billing process — if it is done right — companies keep meticulous information on how much of a given product is being sold, how much of a service is being used, what offerings customers are buying together, what’s going unused, and more – data to drive insights. With these insights leaders can make decisions about how to upgrade their offerings, where to invest, and what to let go of. And that’s just the tip of the iceberg. With manual and outdated billing systems, you can imagine these insights are all but impossible to mine. But with an intelligent system in place, companies can unlock the power to grow revenue significantly by making informed business decisions.
• Making Quick Changes Easy: Any business that wants to get ahead — and stay ahead — in our rapidly changing landscape must be able to pivot quickly. Maybe that’s by offering new products and services, maybe it’s by offering special rates or adjusting pricing across the board, maybe it’s adding language and tax rules for new geographic markets, or maybe it’s adding or removing capacity to meet customer demand. These changes and how quickly or even whether they can be implemented are often gated by the billing system. With an outdated system in place, these changes may require such significant investment in time and money that it’s impossible to stay ahead of the curve. But with the right system in place, businesses can become agile enough to stay leagues ahead of the competition.

• Ensuring Regulatory Compliance: From customer data protection laws like GDPR to revenue recognition regulations like ASC606 to general tax and accounting practices, there are a lot of i’s to dot and t’s to cross, and this is part of the billing process, too. While many companies spend significant time and energy wrangling manual compliance checks, others take advantage of billing platforms that automate and streamline the process, taking the risks out of data and revenue management.

• Improving the Customer Experience: The most visible part of the customer billing experience is the invoice and payment process. If the invoice is wrong or confusing, or if making a payment is inconvenient or renewing a subscription is difficult, customers are unlikely to keep coming back — no matter how good their experience was up to that moment. But every step in the quote-to-cash process, from the initial price quote to contract finalization to rating and mediation, etc., must go smoothly behind the scenes in order to ensure a great customer billing experience. When a legacy system leads to logjams or manual processes allow errors to slip by upstream, those issues snowball on their way to the customer, leading to frustration and ultimately to churn.

The Right System Makes Complex Billing Simple

Billing touches almost every corner of an organization, and the successes (or failures) of the process have wide-ranging ramifications. So how can companies ensure the process goes smoothly from end to end, no matter how rapid the growth or how complex the business model? The key is a sophisticated, agile billing platform that integrates seamlessly with other systems and automates nuanced, labor-intensive processes and workflows in order to ensure efficiency and accuracy — all the way from quote to cash.

At Gotransverse, we pride ourselves on providing our clients with the platform they need to do all that and more. To find out whether our platform is right for your organization, we invite you to take a virtual tour of our billing platform today. Then, when you’re ready, request a demo to learn more.