Usage-based billing is becoming an increasingly common way for recurring revenue companies to do business with their customers.
This style of revenue collection has numerous advantages that have contributed to its rising popularity:
This article will cover some best practices that can make usage billing profitable and straightforward for any SaaS company.
One of the potential drawbacks of usage-based billing is that it introduces some elements of uncertainty for the customer. How much will they use your software? How much can they expect to pay for different levels of use across time?
These are natural questions when debating whether to purchase an item or service. But you can take steps to make them easier for your customers to answer, such as:
That’s only half of the equation for creating predictability around usage billing systems. Let’s dive into the second part.
Creating internal predictability for your employees and co-workers also plays a key role in effectively implementing usage-based billing.
In particular, you’ll want to track your SaaS metrics across three distinct aspects of the customer journey:
Now you know the two aspects of predictability that all well-run usage billing companies need. But what does it take to achieve that clarity around your ARR and bottom line?
Accounting automation is something that all CFO’s should be taking full advantage of, whether they’re in the SaaS space or not.
The advantages of a streamlined and automated accounting workflow are undeniable. Companies who embrace automation will unlock growth at much quicker rates than their peers who continue to use manual accounting methods.
Some of the standout benefits of accounting automation software include:
With these day-to-day tasks automated away, you’ll be able to focus on the long-term strategic questions that will enable your business to achieve strong usage billing results quarter after quarter.
The Akuna Solutions Team