If you’re in the business of selling software, you probably already know how important it is to have a solid billing system. Unfortunately, there are some significant obstacles standing in the way of getting that system in place such as limited resources and the fact that it’s non-trivial to customize your software for specific types of customers. The good news is that there’s more than one way to solve these problems. Here are 7 steps that will help get your SaaS company ready for subscription billing — no matter what kind of product or service you’re offering.
Step 1 – Outline your business model
The first step in getting your SaaS company ready for subscription billing is to outline your business model. This means that you have to define your target audience and define their value proposition. You also need to define your revenue model and where that revenue is coming from, as well as the business goals you want to achieve with this new system.
Step 2 – Invest in the right tools
You’ll need the right tools to run your business. If you don’t invest in the right tools, your SaaS company could become paralyzed by too many manual processes and administrative tasks. You want your team to be able to work faster, smarter, and more efficiently than ever before.
Step 3 – Set up billing systems and processes
Now that you’ve defined your business model and identified which tools are the the best for the job, it’s time to set up the billing systems that will support those payments. This is a step where you’ve seen lots of companies make mistakes — so many that they create a lot of friction in the sign-up process and can cause people to abandon their carts before making a purchase. When deciding whether or not to offer annual plans, keep in mind that annual plans tend to have higher average sale values than monthly ones, so if you’re looking for more revenue per customer, an annual plan might be right for you.
Step 4 – Factor in legal and tax requirements
Once you have your business plan and a working product, it’s time to educate yourself on the legal and tax requirements of subscription-based billing. This is an important step in ensuring that your company is compliant with all relevant laws and regulations. If you are not compliant with the law, your company will not be able to run smoothly or generate revenue. If you are not compliant with tax laws, your income could be subject to significant legal penalties.
Step 5 – Choose the right payment method
Choosing the right payment method can be a difficult decision, but it’s one that you must make if you want your subscription billing to be successful. Your customers are going to want to know how they can pay for their subscription. You’ll have to decide whether you want them to use a credit card, PayPal or any other payment method. The best way to make this decision is by testing different options until you find the one that works best for your business.
Step 6 – Make sure customers understand the process
It’s important to make sure your customers understand the process and the benefits of subscription billing. You can do this by explaining that it will save them time, money, and hassle. You should also explain that subscribing is their only way to get access to your service. While offering a one-time payment option would be easier for you as a business, it means losing money on each new customer — and that can add up quickly over time.
Step 7 – Test, test, and test again
This is a good time to test the system again. Test it before you launch, and then test it again after you launch. This allows you to make sure that everything works as expected and that there are no major issues in terms of functionality or usability. If something isn’t working as intended, this is also a good time for feedback from your team about what should be changed and how best to implement those changes before launching the product into production.
The key to success for any SaaS business is to find the best way to get your customers hooked on your product. If you can do this, then you’ll have an easy time selling them a subscription to get access to more features, updates, and support from your team.