SaaS Invoicing Software: The Lifeline of Subscription Businesses

Manually generating invoices for a large number of subscribers, and then ensuring if each one is accurate is nothing short of a nightmare. It requires thorough calculations, multiple reviews and revisions, and consumes a huge portion of your employees’ precious time.

The matters become even more complicated when recurring invoicing, various billing models, and tax compliance are taken into account.

Fortunately, businesses can overcome all these complications with a single solution. SaaS invoicing software saves businesses’ time and resources by automating their key billing processes. In just a matter of clicks, you can unlock automated payment processing, tax compliance, billing adjustment, and more.

In this article, you’ll find out how SaaS invoicing software works, and how you can choose the best software for your business.

What is SaaS Invoicing Software?

SaaS invoicing software is an invoicing platform catering to the unique billing requirements of SaaS subscription-based businesses. It specializes in automating billing according to specific subscription plans, and billing models implemented by a company.

It also simplifies processes like prorated billing, plan upgrades and downgrades, trials and freemiums, renewals, etc. which are specific to subscription services.

SaaS invoicing software differs from traditional invoicing tools, as it focuses on recurring billing, instead of one-time payments. It handles the entire subscription cycle of a subscriber, adjusting changes in plans and payment methods, and managing cancellations and refunds.

The software also has in-built reporting tools, and offers insights regarding important subscription metrics. For instance, monthly recurring revenue (MRR), customer lifetime value (CLV), customer churn rate, to name a few.

How Does SaaS Invoicing Software Work?

Following are the key functionalities of SaaS invoicing software which make it a game-changer for subscription businesses:

• Automated Invoicing & Billing

SaaS invoicing software automates invoice generation, and other crucial aspects of subscription billing. It involves a myriad of things such as: sending customer invoices on time, collecting payments automatically, processing payments via multiple payment gateways, tracking successful and unsuccessful payments, sending payment reminders, and handling chargebacks and refunds.

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Businesses run these procedures with minimal manual intervention, ensuring data accuracy, and quick operations.

• Support for Recurring Payments

Subscription businesses rely on recurring payments. That is why they require a specialized software to calculate and manage these payments flawlessly. SaaS invoicing software facilitates recurring payments by automating payment collection.

This is done according to the subscription schedules of the customers. If customers have subscribed to a monthly plan, for example, their payments are deducted by the system on a monthly basis.

The system carries out precise calculations of customers’ billing schedules, and then bills them on time.

• Support for Multiple Currencies & Tax Compliance

Businesses operating across the globe can generate customer invoices in their local currencies. This software not only lets them process transactions in different currencies, but also offers competitive currency exchange rates for customer convenience.

Additionally, it automates business’s compliance with the taxation rules specific to each region. For instance, compliance with sales tax, VAT and GST. Specific invoicing formats can also be enabled. This depends on your choice of the invoicing software.

• Integration with External Systems

SaaS invoicing software allows integration with third-party accounting and e-commerce platforms, and many other systems. You can connect with software like QuickBooks and Xero for enhanced financial management, and revenue recognition.

The invoicing software synchronizes data with integrated platforms to eliminate the need for manual data entry.

• Customization of Invoices

Businesses can customize invoices to reflect their brand image. They can achieve this effect by adding logos to their invoices, defining signature color themes, including personalized messages, configuring invoice structure and layout, and more.

Once an invoice design is standardized, recurring invoices follow the same pattern automatically, fostering personalized payment experiences.

How to Choose the Best SaaS Invoicing Software?

In order to decide on the most suitable invoicing software, businesses need to first know about its features. It’s a good practice to outline what you want in your invoicing software, and then communicate these needs to the merchants.

Following is a basic-check list of features which subscription businesses should consider before investing in a software:

1. Scalability

There is a wide range of SaaS invoicing software available in the market. Each software specializes in the needs of businesses of different sizes.

Some invoicing software are built for the operations of small businesses only, while others cater to the needs of medium to large-sized businesses. In addition, there are flexible solutions available too, like SubscriptionFlow that facilitate businesses of all sizes.

If you are a small business with a high growth potential, go for a software which can scale alongside you. Similarly, if you are a large enterprise, look for a software that can handle your subscription numbers without friction.

System scalability is important, because you don’t want your software to crumble under the pressure of your growing subscriber base.

2. Ease of Use

One of the most desired qualities in an invoicing software is its intuitive nature, or ease of use. Not all businesses have a team of technical experts to deal with complicated interfaces, or write code to trigger workflows.

An easy-to-navigate software is always preferred, as your employees familiarize with it quicker. It does not result in a steep learning curve, or prolonged downtime.

Software trials exist so that you can check the ease with which you can access the advanced functionalities of a system. You can also test if the software is compatible with mobile phones for monitoring business activity on the go.

Look out for all the options that add convenience to your everyday tasks, such as automation, one-click renewals, intuitive dashboards, etc.

3. Automation

The more efficient the SaaS invoicing software is; the more automation it offers. You don’t have to waste your valuable time generating invoices manually, and then double- and triple-checking if you got the details right.

Robust billing platforms zero out the possibility of calculation errors, deliver invoices right on time, and auto-renew subscriptions as soon as customers pay.

The system sends out invoices according to the unique billing schedule of each customer. It also helps you track the payment statuses of customers in real-time. Smart automation not only streamlines your recurring revenue, but also helps restore the revenue lost.

Invoicing software like SubscriptionFlow automates smart dunning procedures to recover missing payments effectively. The platform sends payment reminders via your choice of communication channels. It also attempts payment retries at optimal times to fetch payments as soon as possible.

4. Support for Different Billing Models

See if the software offers the billing models you require. These may include usage-based billing, volume billing, tiered billing, proration, flat-rate billing, and a lot more.

You should also evaluate how flexibly the system bills your customers based on each model, and how it adjusts any subscription modifications such as plan upgrades/downgrades.

Powerful invoicing engines have the ability to bill each customer according to their preferred payment methods, and billing models without producing errors.

5. Integrations

Always check whether the invoicing software you’re considering integrates with your existing software ecosystem or not. If not, then it can lead to data discrepancies.

Opt for software that can simplify the integration process, and can flexibly integrate with the platforms of your choice. It must allow for flexible data syncing with other platforms to maintain data accuracy.

You can verify, for example, if the software integrates with accounting or ERP systems, CRMs, e-commerce platforms, or the payment gateways of your choice. You may require customized integrations as well. In that regard, the software must offer flexible API for smooth integrations.

6. Tax Compliance

Tax regulations vary from country to country, and for product to product. The most common types of taxes are sales tax, VAT and GST. These tax types can be subjected to different rules, depending on the region you work in.

To add to the complexity, taxation rules are ever-evolving. Businesses need to stay vigilant to not miss any important legal updates. That is also why businesses need to have an invoicing software which handles their tax calculations and filings like a pro.

Select software which automates tax compliance according to the region you operate in. Aside from taxes, make sure your software offers compliance with data protection laws as well, for example CCPA in the US, and GDPR in Europe.

These functions are especially vital if you are dealing with data of customers from around the globe. Furthermore, choose software that helps you remain audit-ready at all times. It can do this by providing clear and organized transaction histories, financial reports, and detailed logs.

7. Reporting and Analytics

Your SaaS invoicing software must have the ability to present your key metrics in a clear and accessible manner. You should have access to an advanced and easy-to-use dashboard which displays your changing numbers in real-time.

The major KPIs that you should be able to access include, but are not limited to: your revenue figures (MRR or ARR), customer lifetime value (CLV), customer acquisition cost (CAC), and churn rate.

These indicators help you assess your financial health better, and enable more accurate revenue forecasting. You can utilize these insights to address any operational bottlenecks that might be causing a decline in your numbers.

8. Customization

Do not lock yourself into a system that limits your ability to strategize creatively. Be at the top of your game with an invoicing software that lets you customize freely. Check if your software lets you create flexible subscriptions plans, and implement the billing schedules your customers need.

Also see if you can customize invoices the way you want. SubscriptionFlow allows you to customize invoices deeply. You can not only modify the looks of your invoices, but can also add custom fields, and payment links in them. You can also offer your customers personalized self-service portals, so they can control their subscriptions effortlessly.

Customized invoices, tailored checkouts, subscription bundles, self-service portals, and similar features endorse brand loyalty and reduce customer churn.

SubscriptionFlow: The Leading SaaS Invoicing Software

SubscriptionFlow offers unrivalled recurring invoicing services. For businesses looking for expert subscription management and flexible billing, SubscriptionFlow is a one-stop solution. We cater to businesses of all sizes. These are some of our stellar features:

• Automated Recurring Billing

Run everything on autopilot: invoicing, payment collection, renewals, refunds, payment recovery, account management and expansion. Keep manual interference minimal, and stay on top of your finances.

• Flexible Billing Models

Incorporate complex pricing models into your subscription plans. For example, usage-based pricing, volume or tiered pricing, and prorated billing. We let you streamline recurring billing and customer renewals.

• Multi-Currency Support & Tax Compliance

You can bill your customers in the currency of their choice. The system expertly automates compliance with region-specific financial regulations, allowing you to work without worry.

• Customizable Invoices

Use our software to create professional and personalized invoices that reflect your brand. Incorporate unique links into your invoices to make payment convenient for your customers.

• A Wide Network of Integrations

Connect your business with accounting software such as Xero, tax management software like Avalara or a CRM like HubSpot. SubscriptionFlow offers a wide range of integration options for your operations to run smoothly.

• Efficient Dunning to Recover Revenue

Automate dunning processes with our robust billing software to ensure maximum revenue recovery with custom rules and scheduled retries. Send personalized payment reminders to your customers, to maintain an uninterrupted cash flow.

• Advanced Reporting and Analytics

We offer you deep insights into your subscribers’ behaviors, emerging trends, subscription metrics, revenue and much more.

• Customer Self-Service Portals

Elevate customer engagement by allowing them access to their own service portals which can be fully personalized. Let users manage their own subscriptions, and reduce your workload.

By choosing SubscriptionFlow, you choose all of these features and many more. Book a demo now to find out more about the invoicing solutions we offer.