Subscription Billing vs. Revenue Management: What B2B Companies Need to Know

For B2B subscription companies, simplifying the lead to revenue process has become more important than ever. Given the various complexities of managing a subscription-based business, having a single, end-to-end platform that allows for easy management of subscribers and associated billing is the only way to power a modern and seamless lead-to-revenue generation experience for B2B customers.

Although a simple subscription billing platform offers a handful of basic capabilities, what companies today need is a far more advanced and innovative revenue management solution that simplifies the entire billing experience.

The differences between a billing and revenue management platform

A subscription billing software allows B2B organizations to collect recurring payments from customers, manage subscriptions, and send them accurate and timely invoices. By offering features across reporting, invoice generation, taxation, and more it allows companies to easily manage subscriptions and meet the growing needs of customers.

A revenue management platform, on the other hand, makes it easy for B2B companies to scale and automate complex billing operations and ensure revenue tracking accuracy. Through advanced billing and reporting capabilities, it enables them to efficiently calculate product usage, apply relevant charges, manage invoicing with customized billing cycles, send payment reminders, and track and categorize revenue for accounting and reporting purposes.

If you are looking to invest in a modern subscription management solution and aren’t sure of what makes a billing platform and a revenue management platform different, here’s what you need to know:

 Billing PlatformRevenue Management Platform
1Basic Reporting

 

  • Offers quick insights into subscription business health via metrics and KPIs
  • Allows companies to choose from a handful of reporting templates to build reports and meet business needs.
Advanced Reporting

 

  • Offers advanced reporting capabilities that allow for accurate tracking of revenue by time period or customer type through a modern and user-friendly reporting tool
  • Enables companies to build their own customized reports
  • Allows for revenue to be categorized based on predetermined codes that can be read by an accounting software platform, simplifying the reporting process
2Manual invoice generation

 

  • For every billing cycle, organizations need to manually generate invoices and send them to customers.
  • Categorizing and classifying invoices, verifying and validating, and approving them also required manual intervention.
Usage-based invoice generation

 

  • For every billing cycle, companies can calculate computing charges based on actual usage of any service such as storage kilobytes, MB, GB, calls, minutes, licenses, features, software usage, data, messages sent, bandwidth, etc.
  • Invoices are then automatically generated based on usage and the relevant taxes that need to be applied
3Basic taxation
  • Allows for tax rates to be set on subscriptions or invoices for tax determination and calculation
  • Requires companies to manually specify tax rates based on the product, service, and region
Advanced taxation
  • Allows companies to improve tax rate accuracy for each customer transaction by capturing the required tax information and calculating it in real-time for every invoice
  • Offers seamless integration with modern taxation platforms, enabling companies to apply the correct taxation codes in a given country or region and minimize any potential tax audit risk
4Fixed billing cycles
  • Allows companies to bill subscriptions on a fixed billing cycle – annually, quarterly, or monthly – to maintain consistent cash flows.
  • When creating new subscriptions, they can configure billing cycles to fixed dates – either on the date of subscription or on the date the subscription gets activated.
Customized billing cycles
  • Allows companies to choose from a wide array of billing methods -standard, flex, on-demand, order-based, etc. – that is tailored to their needs
  • Companies can include add-ons and other features in the bill, including discounts, run-time charges, taxes, etc.
  • They can customize the design of the invoice template and choose when they want each customer to be billed
  • They can also consolidate charges from different vendors / systems into one single bill
5Standard product plans
  • Enables companies to efficiently configure and offer standard product catalogs
  • Requires manual mapping of add-ons, charges, currency, and billing frequency with each plan
Flexible product plans
  • Offers modern Configure-Price-Quote (CPQ) capabilities with the flexibility to create the various product and pricing plans and charge types such as one-time, variable, metered, etc
  • Each plan comes with unique configurations that are tailored to the local market in which they are sold within
  • Companies can personalize products for specific customers by creating promotions and bundles and manage quotes, approvals, and contracts – without any manual intervention.

As the subscription business model becomes a global phenomenon, efficiently managing customer billing based on usage has become extremely critical.

A modern revenue management platform such as OneBill allows for efficient and timely monitoring of usage and understanding how it is linked to their billing plan. It also enables companies to scale various billing plans and payment cycles for customers and ensure seamless customer experiences. Take a demo today!
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