Last Updated: December 2024
Selecting the best SaaS billing software can be a game-changer for businesses, streamlining invoicing, reducing manual work, and enhancing customer satisfaction. With the global SaaS market projected to reach over $700 billion by 2030, having an efficient billing system is essential for staying competitive and scalable in today’s fast-paced digital economy.
In this guide, we’ll cover the key factors to consider when choosing SaaS billing software, from automation capabilities to integration options, so you can make an informed decision that supports your business’s growth and customer experience.
What Makes SaaS Billing Different
The emphasis on flexible subscriptions, automation, and scalability makes SaaS billing different from traditional billing. SaaS billing systems are built to help businesses grow to offer subscription revenue as well as retain customers by keeping a pulse on their subscription usage.
The global subscription revenue is expected to hit $1.5 trillion by 2025, shifting more towards recurring revenue models, and usage-based pricing. So these systems require powerful capabilities like revenue recognition, dunning management, and MRR tracking to facilitate accurate reporting and seamless customer engagement.
Furthermore, integration with CRM and accounting tools, provides seamless data flow across the platforms, thus, aiding business scaling with customer satisfaction.
Key Features to Look for In SaaS Billing Software
Certain key features can be decisive while selecting SaaS billing software to optimize billing, subscription management, and revenue flow security. Here are which features to look for in billing software for SaaS business:
SaaS Subscription Management
A good billing system should allow you to manage multiple subscription plans and flexible month-to-month, annual, and custom cycles. It should also support upgrades, downgrades, trial periods, and cancellations. This means businesses can easily provide flexible options based on customer needs while also reducing churn due to changing subscriptions.
Usage-Based Billing
For organizations that bill as per customer consumption (metered or usage-based pricing), the billing software should be able to track and bill usage information as appropriate. It allows businesses to apply pricing models that suit customer requirements and behavioral patterns more closely, introducing more flexibility and optimizing revenue streams.
Automated Billing System for SaaS
It should automate critical billing activities like invoice creation, payment reminders, and dunning management (failing payment reminders). Automation of these workflows, helps businesses reduce manual work, and make sure revenue collection happens on time.
Also, automated billing systems can reduce human errors by up to 80%, thus improving operational efficiency and cash flow.
Integrations with Other Systems
The billing software you choose should be integration-compatible with your other business systems like CRM, ERP, accounting, and analytics tools. Accurate reporting, and visibility into customer and financial information improves centralized data flow across departments.
Security and Compliance
As this involves billing information, security should always be the most important issue. The software must adhere to various data protection policies such as GDPR, PCI-DSS, and must also be equipped with data encryption, and secure payment gateways, etc.
Robust security and compliance capabilities help protect customer data, build trust with your customers, and protect your business from risk and liability.
Must Read: SaaS Pricing Models & Strategies Demystified
Things You Need to Get Right
There are some key components you must get right if you want to exercise every benefit of your SaaS billing software. These fall into three broad categories: Revenue Recognition, Accounts Receivable, and Monthly Recurring Revenue (MRR) Metrics.
They all do something special to make sure your billing basis complies with GAAP, handle cash flow, and allow you for proper growth measurement.
Revenue Recognition
Revenue recognition is key to accurate income reporting and compliance with accounting standards. Merely registering revenue upon receipt of payment is insufficient.
SaaS companies typically recognize revenue over the term of a subscription. Ideal billing software should eliminate the manual intervention required in revenue recognition while recording the revenues when compliant with ASC 606 / IFRS 15 standards.
Such exact assistance is required to avoid accounting mistakes and preserve the transparency and compliance of financial reporting.
Accounts Receivable
Managing accounts receivable (AR) is at the core of keeping cash flow intact. Your billing software should be able to handle automated invoicing and remind you of missed payment dates. It also should have a dunning process in the backend when a payment fails.
A well-organized accounts receivable system ensures that they have a reminder of any remaining balances. It helps businesses from losing revenue. When AR is better streamlined, businesses will be better able to help cash flow and maintain a healthier balance sheet.
Monthly Recurring Revenue (MRR) Metrics
Monthly recurring revenue (MRR) is among the most important metrics for SaaS companies. It gives them a reliable way to assess income on a month-by-month basis.
When it comes to tracking how your customer base grows, retains, and expands, MRR is crucial for understanding your business performance and forecasts. A good SaaS billing software will track and calculate MRR automatically with a detailed breakdown of its components such as new MRR, expansion MRR, and churned MRR.
Having transparent insights into MRR allows companies to make better sales, marketing, and growth decisions.
Top 6 SaaS Billing Software
Here are six SaaS billing software solutions built with SaaS billing best practices in mind, focusing on streamlining subscription management, automating billing workflows, and optimizing revenue tracking. Each solution offers essential features, such as recurring and usage-based billing support, automated revenue recognition, and integration options, ensuring compliance and efficient data handling across platforms.
1. Stripe
Ratings: 4.2/5⭐
Pricing: Zero set-up fee, 2% on transactions
Stripe is a payment infrastructure for online businesses to accept payments and manage day-to-day operations. Features like payment processing, billing, invoicing, subscription management, and advanced fraud protection offered by Stripe are some of the most desired features for SaaS businesses.
The platform enables multi-currency payments, whether inbound or outbound, enables accounts receivable management, automates reconnaissance, and enables detailed reporting for better insights across departments.
Stripe has built an API-based system with built-in scalability, allowing seamless integration with e-commerce and service websites; from start-ups to enterprises.
2. Recurly
Ratings: 4.0/5⭐
Pricing: Free for the first three months, then customizable pricing
Recurly is a subscription management platform and recurring billing platform that helps businesses run subscription-based operations. It also offers automated billing, revenue recovery tools, and flexible billing models such as hybrid and usage-based billing support.
Moreover, Recurly is integrated with several payment gateways to provide flexible and secure payment processing.
The platform also provides powerful analytics to gain real-time insight on metrics like customer lifetime value, churn, and monthly recurring revenue to give businesses the ability to make data-driven decisions to optimize and scale subscription management.
3. Chargebee
Ratings: 4.4/5⭐
Pricing: 0.75% of billing amount
Chargebee is a subscription billing platform that provides tools to simplify recurring billing and revenue operations along with subscription management for SaaS and eCommerce companies.
The software offers some great features like build-your-own billing workflows, automated invoicing, revenue recognition, and revenue analytics to track key metrics including Monthly Recurring Revenue (MRR).
It connects with major CRMs, ERPs, and payment gateways to provide continuity in data flow across the business processes while complying with standards like ASC 606.
4. Zuora
Ratings: 3.9/5⭐
Pricing: Customizable Pricing
Zuora is an all-in-one subscription and recurring revenue management platform designed for businesses moving to or already in the subscription business. The platform can simplify all types of pricing models for SaaS businesses including flexible recurring, usage-based, and one-time payments.
It has automated revenue recognition to help businesses comply with financial standards, improve accounts receivable, and reduce revenue leakage. Another reason for this software is the ability to integrate with a multitude of applications via low-code SDKs and APIs. This allows businesses to rapidly scale and adapt to their present tech stacks.
5. Maxio
Ratings: 4.3/5⭐
Pricing: Customizable Pricing
Maxio is a harmonious revenue management tool. This is a continuation of Chargify for the more complex needs of SaaS, and serving up both subscription management and revenue aggregate solutions for growth.
The platform provides revenue forecasting, automated billing, revenue recognition, and analytics tools that enable businesses to simplify financial processes, optimize pricing, and improve decision-making.
It combines disparate financial data points to surface growth metrics and improves operational efficiency.
6. Ordway
Ratings: 4.4/5⭐
Pricing: Customizable Pricing
Ordway is a finance automation platform that supports complex billing requirements, especially for SaaS and cloud-oriented companies. The platform assists automate billing, accounts receivables, and revenue recognition to facilitate subscription, usage-based, and transaction pricing.
Ordway works with your favorite CRM, ERP, and accounting software to help businesses scale faster by automating manual processes and replacing them with powerful, configurable workflows.
Saufter.io – The Best AI-Powered Customer Engagement Platform
Saufter.io is a platform focused on enhancing customer engagement through AI-driven chatbots. Designed to improve website interactions, it offers features such as customizable chatbots, 24/7 automated responses, and tools for seamless lead generation.
Saufter also integrates with CRM systems, providing analytics to track visitor engagement and conversions. The platform emphasizes a user-friendly setup, allowing businesses to quickly implement AI chatbots tailored to customer needs, ultimately improving support, sales, and customer satisfaction.
Conclusion
In choosing SaaS billing software, the right solution can streamline operations, boost revenue recognition accuracy, and enhance customer satisfaction.
The SaaS industry has increased by 500% in size over the past 7 years. The complexities in the pricing models and invoicing are also increasing in the same way. That’s why choosing the right billing software that can actually simplify your billing process is crucial.
Platforms like Saufter can be part of an effective SaaS solution, offering automation tools that simplify customer engagement and support. Selecting software that aligns with your unique billing needs will ultimately support both financial health and scalable growth for your business.
