Here’s an interesting stat: 70% of businesses consider subscription and membership models indispensable for future commercial growth and expansion. However, only 10% of them currently employ these models.
What hinders the 90% is the high costs of delivering better products and experiences that warrant long-term customer loyalty. In a saturated market, how do they distinguish themselves? How do they keep customers returning for more?
Software-as-a-service (SaaS) businesses need to constantly evolve their offerings to stay fresh and relevant. They must engineer a well-rounded solution that makes handling subscriptions a breeze (and yes, it is as hard as it sounds).
But if you’re a B2B solution, there’s a high likelihood that businesses will be interested in being able to accept customer payments, rather than just sending them a PayPal link or to a generic payment gateway.
By offering a payment solution that’s integrated with the rest of your service, you can streamline this process and offer increased convenience. How do you add payment processing capabilities to your software? By partnering with a trusted SaaS billing platform.
In this guide, we’re going to cover what companies need to consider when choosing a SaaS billing platform—and how Stax Connect makes this process simple.
TL;DR
- A SaaS billing platform is a digital solution that allows SaaS companies to process payments and manage the overall transaction lifecycle. This includes subscription management, revenue recognition, dunning management, integrations with other business systems, fraud prevention, and more.
- Automated SaaS billing and subscription management work hand-in-hand to streamline business operations. With proper integration, they can minimize billing errors, enable adaptive pricing strategies, and provide real-time insights to enhance overall efficiency.
- Some of the features to look for in a SaaS billing platform include subscription billing management, payment analytics, dunning management, and fraud prevention. For best practices, integrate it with your other systems, offer flexible plans for optimized cash flow, and ensure data security compliance to industry standards.
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What is a SaaS Billing Platform?
A SaaS billing platform is a digital solution that allows companies to process payments and manage the overall transaction lifecycle. This includes subscription management, revenue recognition, dunning management, integrations with other business systems, fraud prevention, and more.
SaaS billing solutions are usually talked about within the context of B2C payment processing. But this isn’t sufficient for enterprise-level SaaS companies that want to offer payment processing to their own customers as a value-added service. This is where an advanced B2B subscription management platform comes in.
Understanding SaaS Billing and Subscription Management
SaaS billing and subscription management work hand-in-hand to keep digital businesses running smoothly. Billing focuses on financial transactions and payment processes, while the latter oversees a broader range of business operations. This integrated approach addresses modern consumers’ evolving expectations.
Customers seek personalized and hassle-free experiences. Both systems allow you to craft personalized subscription plans based on user needs and preferences. Whether it’s different billing needs, pricing tiers, varied service levels, or add-on features, the flexibility caters to diverse requirements.
Moreover, a billing-integrated subscription model facilitates transparency and real-time information. It provides instant alerts on subscription plan changes, upcoming payments, and any relevant notifications. Its smart automation keeps customers informed at every step.
These are only a glimpse of what automated SaaS billing software brings to the table for a subscription-based business model. We’ll go over these benefits in more detail in the following part, from boosting customer retention to seamlessly adapting pricing strategy.
Key Benefits of Automated SaaS Billing Systems
Embracing automation with solutions like Stax Bill enables more efficient and accurate subscription management. Key advantages include:
- Customer retention. By automating subscription renewals, customers don’t inadvertently lapse or face interruptions in service. This convenience reduces the chances of churn and promotes long-term customer retention.
- Reduced potential errors. Automation eliminates the need for manual data entry and processing. It ensures accurate calculations, invoice generation, and payment processing, so you don’t have to worry about billing discrepancies later.
- Adaptive pricing strategies. Automated systems let you add premium features, expand service offerings, or set discount pricing for specific periods. The exact process varies depending on the software you use, but Stax Bill features a user-friendly interface for such adjustments.
- Real-time insights. SaaS billing generates real-time insights through comprehensive analytics and reporting. You can track key metrics in real time, allowing you to make up-to-date, data-driven decisions. It’ll also help you address customer pain points to maximize their revenue potential.
Explore a smarter way to handle your SaaS billing. Stax Bill’s seamless subscription management software automates your payment processes, minimizes errors, and delivers real-time insights. Learn more about our features here.
Why Should SaaS Companies Consider Offering Payment Processing Services As Part Of Their Software?
Not every enterprise-level SaaS company or subscription business considers adding online payment collection into their software solution. This is often due to misconceptions that they will have to develop this functionality from scratch (more on this later). But there are some pretty compelling reasons why it’s worth integrating payment processing into your SaaS platform:
Payments present an additional revenue stream to your business
Although the world of SaaS management tools can be highly lucrative, it’s also unstable. Long-term customer retention is a major challenge, and the high churn rates of this business model can make it difficult for companies to build stable revenue.
For this reason, all the best SaaS startups embrace careful revenue management and look for opportunities to upsell customers and broaden their sources of revenue.
Payment processing can be included within your pricing plans in several different ways. For example, you could include billing software within a certain tier of your SaaS subscription, or offer it as an optional add-on or upgrade that subscribers can access for a fixed monthly rate or usage-based pricing.
Full control over the payment process
Although subscribing to an existing payment processor is convenient, you have very limited control over how the payment process works. There’s little transparency over what fees are charged or how issues such as chargebacks are handled—all of which can hurt the customer experience.
By becoming the payment facilitator, it’s entirely up to your business to decide what payment methods you want to accept or what schedule you use for transferring funds. This means more flexibility in designing a system that works for your customers.
Stand out from competitors by offering increased convenience
As competition grows in the eCommerce space, many companies are looking for additional cloud-based services they can integrate into their technology stack. This allows customers to run more workflows through one system, rather than trying to integrate several systems together.
Integrated payment processing is an especially valuable service because it since neatly alongside a whole host of other professional services, including accounting, CRM, SaaS subscription billing, scheduling, and more.
4 Steps To Find the Right SaaS Payments Partner
Finding the right SaaS billing platform for your needs can be an overwhelming process for businesses to navigate. With so many options on the market, it can be difficult to know what to prioritize in your search. Here are 4 steps to find a payment partner who ticks the right boxes:
Compare pricing models
This might seem obvious, but the pricing model used by different software solutions will vary. Depending on your payment volumes, you may be able to access enterprise-level pricing that is fully customizable to your needs, i.e. whether you plan on processing multiple currencies. Alternatively, they may apply usage-based pricing or a fixed monthly or annual fee. Be sure to check what is included in these fees as certain services, such as a subscription management system, may come as an additional add-on.
Check where a partner is licensed to operate
While many billing systems operate globally, some may be restricted to processing payments made in specific regions or countries. If your company has customers around the world or plans to expand internationally, it’s important to check where a potential billing solution is licensed to operate. Otherwise, you may find yourself needing to switch providers again in the not-too-distant future, which can hamper business growth.
Review API documentation to see how easy it is to integrate
API (Application Programming Interface) is what allows your software to integrate with your billing platform. An open API means that a SaaS provider has made its code available via documentation so your team can offer different features and services, such as recurring billing or invoicing. The strain of this process can vary between payment partners, so it’s important to review any API documentation to understand how long it will take to get key systems set up.
Understand what level of customer support a partner will provide
24/7 customer support is a vital offering for any payment partner when you are responsible for processing payments on behalf of other merchants. If there is an outage, your customers are going to turn to you for an explanation. Being able to speak to a support team across multiple channels, including email, live chat, or phone, is essential to resolve problems in a timely manner. It’s a good idea to also ask what resources a potential partner has to assist with troubleshooting, such as webinars, guides, and video tutorials.
What Features Should You Look For in a Billing Platform?
Ready to explore billing platforms for your SaaS company? Consider the following features.
1. Customizable onboarding
When offering payment processing services, you want to make it easy as possible for your customers to begin accepting payments. If the process is complex or requires signing up through another app or checkout, this might push subscribers to opt for another solution.
To avoid this, look for a SaaS billing solution that offers fully-customizable onboarding workflows and tracking. This way, you can see how customers are progressing and whether they may need some additional support.
2. Subscription billing management
If you’re wanting to meet the payment needs of SaaS businesses, you must meet the needs of their billing models. In addition to recurring billing, subscription management involves setup fees, automated renewals, Card Not Present transactions, and more. Being able to offer these high-powered features to your customers will allow you to compete more effectively with other B2B payment processing solutions, such as Chargify and Chargebee.
3. Built-in payment analytics
When you’re in charge of processing payments, there are several KPIs you need to keep track of in real-time to identify areas that may require optimization. This means you need a SaaS billing platform capable of tracking a range of important metrics, including:
Monthly Recurring Revenue (MRR). Monthly Recurring Revenue is a measure of what revenue a SaaS company expects to receive every month from offering payment processing as a service. MRR is essential to help you project earnings, as a decline in recurring payments could indicate you’re experiencing an increase in customer churn or downgrades in subscriptions.
Churn Rate. It refers to the percentage of customers who discontinue or stop using a product or service within a given period. A higher churn rate indicates a higher level of customer loss who were actively engaging with the payment features. Meanwhile, a lower churn rate signifies better customer retention.
Attachment Rate. This is what proportion of your total customers have signed up for your payment processing service. This is a useful measure of how many customers are utilizing payments in addition to your other offerings, and how successful your sales and marketing efforts are at attracting new subscribers. If your attachment rate has plateaued, this could be an indication that you need to spotlight payment processing more heavily on your channels.
Payment Processing Velocity. It’s not only important to look at how many businesses are subscribed to payment processing, but how many payments they are accepting on a weekly or monthly basis. Keeping track of velocity enables you to identify which customers are undergoing fast growth, and may benefit from other services in your portfolio.
Understanding SaaS metrics will help you strategically alter your strategies for sustained growth and long-term customer satisfaction.
4. Automated payment collection aka dunning management
Involuntary churn is a huge problem within the SaaS space, making up between 20-40% of overall customer churn. This makes smart automated payment collection (sometimes referred to as dunning management) a key part of any subscription billing software.
This is the process of automating the communications and actions taken to remind customers of their outstanding payments and to encourage them to settle their debts within the specified terms.
Credit card retries and notifications to update card details assist SaaS brands in recapturing revenue and preventing subscribers from falling out of the sales funnel. For best results, pick a billing platform that offers SaaS companies customized automated payment collection.
5. Fraud prevention
As the provider of payment processing services, your company faces a lot of liability if customers experience a leak of sensitive data, such as credit card details or personal information. Make sure that your SaaS billing platform is fully compliant with PCI DSS security regulations and can securely store credit card data on file via payment tokenization. This gives both you and your customers confidence that data breaches can be avoided.
Choosing the Right SaaS Billing Software
Your billing platform should tick all the boxes above and be able to scale alongside your business. They must accommodate your expanding customer base, increasing transactions, and growing business needs.
Here are some top billing software options to consider.
| Features | Stripe Billing | Recurly | Stax Bill |
| Integration | Robust API, suitable for businesses with moderate to high technical capabilities | Intuitive UI, easy to use, but lacks extensive integration | Boasts seamless connectivity with Native Integrations, API, and Webhooks |
| Subscription Management | Unifies payments, billing, and revenue management in one place | Handles multiple subscriptions | Simplifies tasks from registrations to renewals with a self-service portal |
| Recurring Billing & Automation | Automate payments with prebuilt invoices | Automates subscription billing and invoicing | Recurring payments support multiple gateways and currencies |
| Revenue Recognition | ASC 606-compliant | ASC 606-compliant | Automated, ASC 606-compliant |
| Analytics | For accounts receivable aging reports | For subscriber growth and retention | Real-time subscription and billing data |
| Dunning Management | Has a customizable dunning flow | Limited customization options | Extensive automated dunning features—e.g., fully customizable emails and SMS, automated failed payment retry schedule, and AR aging report analysis |
Choose your provider wisely to ensure your SaaS billing application integrates with your daily operations.
How to Integrate SaaS Billing Software with Your Business Operations
Simplified setup and configuration mean you can start using your software ASAP. Here’s a brief guide to achieving seamless integration.
Accounting and bank reconciliation. Choose a platform that allows integrations with popular accounting software (e.g., QuickBooks, Xero, NetSuite) for enhanced revenue streams. This automatic synchronization eliminates manual data entry, establishes consistent tax rules across platforms, and streamlines bank reconciliation of invoices and payments.
Cash flow optimization. Implement flexible subscription plans like annual prepayments or discounts for upfront payments to improve cash flow predictability.
Pro-tip: With Stax Bill, you can set up automated dunning processes for late payments to minimize delinquencies.
Customer relationship management (CRM). If the platform enables CRM integration, it’ll help you synch customer information like contact details, subscription plans, and usage data real-time. Use these insights to identify upsell and cross-sell opportunities and offer targeted promotions.
Marketing and promotion. Leverage billing data, such as upcoming renewals and usage trends, to trigger targeted marketing campaigns. If feasible, A/B test different pricing models and promotions to identify the most effective strategies.
Data security and privacy. Double check if your billing software adheres to industry-standard security protocols. To add an extra layer of security, implement strong password policies and multifactor authentication for user access. Don’t forget to conduct penetration testing and security audits to detect and address potential weaknesses.
Connecting your billing processes with other business systems offers a unified view and seamless data flow. Implement the best practices outlined above to drive success in your SaaS business. In the case study below, you’ll see out how the right tool combined with best practices can grow your organization.
Case Study: JustLogin Automates Billing for Streamlined Growth
Inefficient manual billing process hampered scalability and flexibility for HR software provider JustLogin. They struggled with manual invoicing, limited pricing options, and a reliance on checks and wire transfers. To enhance efficiency, it partnered with Stax Bill to implement an automated billing solution.
Stax Bill generated and delivered invoices lightning-fast while facilitating immediate payment options. It also simplified the introduction of customer-specific strategies, including tiered, stairstep, and volume-based pricing.
With smart and highly tailored automation, JustLogin achieved the following results:
- 90% reduction in billing time and errors
- 3x customer growth without additional staff
- Increased customer satisfaction with faster issue resolution
- Greater pricing flexibility for competitive advantage
- Ability to expand into new regions with multi-currency support
Don’t let manual billing hold your SaaS business back. JustLogin achieved remarkable success with Stax Bill, and so can you. Automate yours today, and free up your team to focus on what matters most.
Stax Connect: The Ultimate Platform to Monetize Payments
At Stax Connect, we understand the complex and varied needs of SaaS companies adding payment processing to their suite of services. Our end-to-end payment ecosystem offers easy integration and a full suite of payment services including recurring billing, ACH processing, hosted payments, data analytics, and more. Our system is 100% PCI DSS compliant, while our in-house risk team monitors all transactions processed via your software platform to mitigate risk. Access our enrollment toolkit to monitor your entire pipeline and track onboarding from start to finish, ensuring a seamless customer experience for your subscribers.
Want to learn more? Get in touch with our SaaS payment experts today!
Quick FAQs about SaaS Billing Platform
Q: What is a SaaS billing platform?
A SaaS billing platform is a digital solution that allows businesses to process payments and manage the overall transaction lifecycle. This includes subscription management, revenue recognition, dunning management, integrations with other business systems, fraud prevention, and more.
Q: Why do SaaS businesses need a billing platform?
SaaS businesses need a billing platform to automate financial transactions and payment processes, ensuring seamless, efficient, and accurate subscription management. It enables companies to craft personalized subscription plans, provides real-time information and alerts, and enables adaptive pricing strategies.
Q: What are the key benefits of an automated SaaS billing system?
Automated SaaS billing systems offer several benefits including improved customer retention, reduced potential errors, adaptive pricing strategies, and access to real-time insights. It allows businesses to track key metrics in real time, enabling data-driven decisions to maximize revenue potential and customer satisfaction.
Q: What features should you look for in a SaaS billing platform?
Some of the essential features to look for in a SaaS billing platform include customizable onboarding, subscription billing management, built-in payment analytics, automated payment collection or dunning management, and fraud prevention.
Q: How can SaaS companies integrate payment processing into their software?
SaaS companies can integrate payment processing into their software by partnering with a trusted SaaS billing platform. This can provide an additional revenue stream, full control over the payment process, and increased convenience for their customers.
Q: How can businesses choose the right SaaS billing platform?
Businesses can choose the right SaaS billing platform by comparing pricing models, reviewing where a potential partner is licensed to operate, reviewing API documentation to understand the ease of integration, and understanding the level of customer support the partner will provide.
Q: How can a SaaS billing platform be integrated with business operations?
Integration of a SaaS billing platform with business operations can be achieved by connecting accounting and bank reconciliation, implementing flexible subscription plans for cash flow optimization, enabling CRM integration for real-time customer information synchronization, leveraging billing data for targeted marketing campaigns, and ensuring data security and privacy.
Q: What are some popular SaaS billing platforms?
Some of the popular SaaS billing platforms include Stripe Billing, Recurly, and Stax Bill. These platforms offer robust integrations, subscription management, recurring billing and automation, revenue recognition, analytics, and dunning management.
Q: How can SaaS billing platforms aid in growth and expansion?
SaaS billing platforms can aid in growth and expansion by streamlining billing processes, enhancing customer experiences, offering real-time insights for data-driven decisions, and enabling flexible pricing strategies. Automated billing can reduce errors, minimize delinquencies, and allow businesses to focus on their core operations and customer satisfaction.
Q: What is Stax Connect?
Stax Connect is an end-to-end payment ecosystem that offers easy integration and a full suite of payment services including recurring billing, ACH processing, hosted payments, data analytics, and more. It is 100% PCI DSS compliant and includes an in-house risk team to monitor all transactions processed via your software platform to mitigate risk.
