Before You Buy: Five Questions for Billing and Subscription Management Vendors

“If you’re not billing for it, it’s a hobby”— Tim Pflugradt, 25+ years in billing automation

Billing is a key moment of truth for all businesses.

Every interaction with the customer ultimately gets filtered through billing. It’s an endless combination of quotes, account creation, orders, pricing, payments, settlement, and subscriber management.

If your company is looking to evaluate billing and subscription management vendors, this paper covers five must-ask questions your peers wished they had uncovered before signing the contract.

Does the vendor cost structure align with my business and growth strategy?

Vendors can take several approaches for their pricing structure. For traditional, on-premise software, it’s typically license fees with yearly maintenance. For cloud-based and SaaS platforms, it’s subscription-based.

How vendors structure their subscription offering may or may not align with your growth strategy, and you may be charged based on your business’s success.

Let’s examine two simple scenarios. First, charges based on a percent of revenue processed or transactions processed in any given month. Second, a tiered subscription based on usage with ceilings in any given month.

Depending on your business and growth strategy either could be the right answer for your company. Make sure you crunch the numbers and believe the cost is worth the value to your business.

Free Like Kittens: If in the sales process the vendor drops its price considerably to win your business, dig into longer-term costs, and calculate a total cost of ownership for the expected life of the vendor relationship. Low up-front costs often mean high long-term costs.