If your business relies on recurring revenue, you may find that managing billing complexities is no small feat. The unique dynamics of recurring revenue, such as fluctuating usage patterns, dynamic pricing structures and ever-changing compliance standards like ASC 606 and IFRS 15 can complicate billing. And if you’re like most recurring revenue businesses, your billing models likely evolve and change over time.
Choosing the right enterprise resource planning (ERP) system for your recurring revenue business is about more than checking a few boxes. It requires a thorough understanding of the features your billing system needs to accommodate recurring revenue today and in the future. This article explores the ERP billing features you’ll want to consider for your recurring revenue business – and the key questions you can ask to inform your decision-making process.
If you’re ready for a deeper dive, check out our guide: 30 billing questions every subscription business should ask before adopting an ERP.
Recurring billing dynamics: An industry view
While many types of businesses rely on recurring revenue, we’ve found that subscription models, tiered pricing, metered services and usage-based billing are common in a few industries. Each one faces its own challenges and has distinct requirements in an ERP billing system:
- Software-as-a-service (SaaS) companies: If your software business operates on a subscription or consumption model, you likely need to support tiered pricing structures, handle pay-as-you-go services and process automatic subscription renewals seamlessly. Features like detailed reporting and billing automation are essential to keep your operation efficient and give you visibility into important billing metrics.
- Telecommunications providers: If you’re in telecom, usage-based billing models are likely central to your operations, charging customers for metered services like data usage or international call minutes. Your ERP must offer robust usage-based billing tools to manage these complexities, and you may need multi-region tax capabilities as well.
- Utilities: If your business provides energy or utility services, billing often involves unique complexities like milestone billing – invoicing customers at specific project phases, such as installation or service activation. You may also need prorated billing to adjust charges when customers add or modify services mid-cycle.
Key ERP billing features for recurring revenue businesses
If your company relies on recurring revenue, the right ERP billing system can help you streamline operations, meet your compliance requirements, grow more efficiently and keep your customers happy. Below, we break down the billing capabilities you should consider and provide some thoughtful questions you can ask as you evaluate billing solutions.
Streamlining billing and revenue processes
Recurring revenue businesses like yours manage complex billing scenarios, from tiered pricing to usage-based models. A capable ERP system automates these processes, reduces errors and improves efficiency. Key features include:
- Automated billing and dunning: Automation ensures your invoices are generated on time, your subscription renewals are processed without manual intervention and overdue invoices are flagged or followed up via automated dunning notifications. This minimizes human error and saves you valuable time.
Ask this: Does the ERP automate reminders for overdue invoices and can it escalate issues for delinquent accounts? - Usage-based and event-triggered billing: If your business relies on consumption-driven pricing or milestone-based billing, your ERP should handle data mediation, enforce minimum commitments and accurately calculate charges for predefined events like service activations and project completions.
Ask this: Can the ERP calculate charges based on customer-specific consumption or events without manual reconciliation? - Support for zero-dollar invoices: Pre-paid services or free trial periods often require invoices that reflect usage without triggering payment requests. This transparency builds trust and keeps your customers informed.
Ask this: Does the ERP offer customizable invoicing options for scenarios like pre-paid services or free trials?
Enhancing compliance and financial accuracy
For recurring revenue businesses, compliance with accounting standards like ASC 606 and IFRS 15 is critical. These standards govern how revenue is recognized and require systems that can handle complex scenarios. Key features include:
- Compliance with ASC 606 and IFRS 15: A strong ERP system helps you recognize revenue based on performance obligations, free periods or contract modifications. This level of precision reduces compliance risks and keeps you ready for audits.
Ask this: How does the ERP account for contract changes or upsells within its revenue recognition framework? - Advanced revenue recognition tools: Automating how you recognize revenue from hybrid plans, upsells and mid-term changes saves time and improves accuracy. Your ERP should provide tools to manage deferred revenue, meet reporting requirements and support advanced revenue management (ARM) if needed.
Ask this: Does the ERP automate adjustments for mid-term changes, such as upgrades or downgrades to a subscription plan? - Global tax compliance: Multi-region businesses face the challenge of charging taxes in various jurisdictions. Integration with tax engines like Avalara ensures accurate tax calculations and compliance with local regulations.
Ask this: Can the ERP support tax compliance across multiple regions and integrate with a tax engine for streamlined operations?
Supporting growth and scalability
As your subscription base grows, it’s good to know that your ERP billing system can handle increased operational demands without disruption. That makes scalability and advanced integrations an essential part of supporting your future expansion. Key features include:
- Scalability for growth: A future-ready billing system should support growing transaction volumes, multi-region operations and additional subsidiaries – without sacrificing performance.
Ask this: Does the billing system support large-scale operations, including managing global currencies and multiple business entities? - Advanced integrations: By seamlessly connecting your ERP with customer relationship management (CRM) platforms (e.g., Salesforce), configure, price, quote (CPQ) software and external analytics systems, you can keep your workflows efficient and inform your decisions with quality data.
Ask this: What pre-built integrations does the ERP offer and can it accommodate custom integrations as your tech stack evolves? - Comprehensive reporting and analytics: Real-time dashboards and customizable reports provide actionable insights into key metrics like monthly recurring revenue (MRR), churn rates and deferred revenue. These insights help you identify trends and optimize performance.
Ask this: Can the ERP provide granular, customizable reports for tracking critical SaaS metrics like MRR and churn?
Improving customer experience and customization
A great customer experience can help you drive retention and reduce churn, and a well-designed ERP should support this by offering flexibility and customization. Key features include:
- Invoice customization: Flexible invoice design helps you bill customers in a way that’s intuitive, such as consolidating charges by department, including detailed usage information or splitting invoices by location.
Ask this: How customizable are invoices, and does the ERP allow for automating these customizations at scale? - Self-service portals: Empowering your customers to manage their subscriptions, view invoices and set up auto-pay through a secure portal reduces your administrative workload while improving customer satisfaction.
Ask this: Does the ERP include a self-service portal where customers can access their billing information and manage payment preferences? - Subscription flexibility: Even if you don’t use them today, hybrid plans, evergreen contracts, prorated billing and mid-term adjustments are growing increasingly common dynamics in subscription-based services. Be sure your billing system can support them without adding operational friction.
Ask this: Can the ERP handle changes to subscription models seamlessly, including upgrades, downgrades and hybrid plans?
Simplify recurring revenue billing with ZoneBilling
Recurring revenue billing comes with several unique challenges. ZoneBilling, a native SuiteApp for NetSuite, gives you the tools you need to manage complex billing scenarios in a way that’s easy on your customers – and your teams.
ZoneBilling automates key processes to reduce manual workloads and improve billing accuracy. It has features like automated dunning, proration tools and support for diverse billing models to streamline your operations while minimizing the risk of human error. With detailed invoice customization and CRM integration, your team can deliver accurate, customized invoices that keep your customers informed – without adding complexity.
ZoneBilling also supports growth by handling increasing transaction volumes, expanding subscription bases and multi-region operations, all while helping you comply with standards like ASC 606 and IFRS 15. With robust reporting and analytics tools, ZoneBilling provides insights into key metrics such as MRR, customer churn and deferred revenue to help drive better financial decisions.
Whether you’re a SaaS company, a telecom provider, an energy company or any business that relies on recurring revenue, ZoneBilling can help you eliminate bottlenecks, simplify complex billing scenarios, and keep your team focused on delivering an exceptional customer experience.
Ready to make an informed ERP billing decision?
If you’re in the process of choosing an ERP billing system for your recurring revenue business, we’ve built a comprehensive checklist that can help guide your decision. Download it here: 30 Billing Questions Every Subscription Business Should Ask.
