7 Must-Have Features of SaaS Billing Platforms in 2024

Is the Software as a Service (SaaS) growth story overhyped?

We think not. For years, SaaS has retained its position as the fastest-growing business model — a cult favorite for entrepreneurs and investors alike.

SaaS offerings have moved upmarket as enterprises have started adding subscription offerings to their core product lines. To that end, the subscription economy has taken off, leaving its mark across industries ranging from pet care to home maintenance services and registering a massive 437% growth in the last few years. 

Many legacy billing tools on the market cannot keep up with this pace, and they fall short in supporting the growing needs of SaaS companies. If your current billing system misses the mark or you are looking to take your billing processes up a notch, we’ve got you covered.

In this article, we delve into the top features that you need to look for in SaaS billing platforms. Let’s dive in.

TL;DR

• A SaaS billing platform is designed to automate invoicing, configure complex pricing models, and manage subscriptions with ease. It comes loaded with features that help SaaS companies accelerate their revenue growth.
• When you’re on the lookout for the best SaaS billing platform, it’s important to first have a good understanding of the top features that will help you ace your billing workflows while meeting your customers’ unique billing model preferences.
• Limitless billing and pricing flexibility, a contract builder, usage data management, advanced dunning systems, integration functionalities, revenue recognition rules, and an in-depth analytics module are seven essential features that you need to look for in SaaS billing platforms.

What is a SaaS billing platform?

A SaaS billing platform is a tool that simplifies revenue management for companies — allowing them to automatically bill their customers at predetermined intervals, manage subscriptions, follow up on payments, streamline revenue recognition, and more.

According to McKinsey, the global SaaS market is expected to surge to a whopping $10 trillion by 2030. To meet users’ rising demand for subscriptions and flexible usage-based models, SaaS companies need an advanced billing and recurring revenue management tool. 

Some of the modern SaaS billing platforms come with flexible pricing and billing capabilities. What does this mean? They can handle complex pricing models, track upgrades or downgrades in the middle of a billing cycle, and even ensure a smooth migration for your clients to a new billing date. Or, as this X user aptly puts it, advanced SaaS billing platforms can manage ‘whatever random arrangement each customer wants’.

SaaS billing platforms: Top 7 features that you cannot miss

Flexible billing and pricing capabilities, a contract builder, native handling of usage data, automated dunning systems, smooth integration capabilities with existing tech stacks, customizable revenue recognition rules, and an in-built analytics module are seven essential features of SaaS billing platforms.

These capabilities will allow you to automate revenue workflows, reduce your team’s gruntwork, and provide the best billing experience for your customers.

Let’s now take a closer look at each of these features.

1. Limitless flexibility in billing and pricing

Most of the legacy billing tools out there are complex. They run on archaic architecture and often lack the flexibility to adapt to modern billing needs and pricing strategies. Additionally, implementation timelines for these billing tools could span from weeks to months. Some of the billing solutions even struggle to keep pace with new regulations, exposing businesses to compliance risks and requiring additional resources for adherence.

The billing system that you opt for should be able to simplify any complex billing logic. That’s not all; from invoicing to payment collection, the billing platform should be capable of customizing workflows to suit your business needs and evolving customer preferences. Enterprise-grade billing tools today are intuitive and easy to use, empowering finance and accounting teams to automate SaaS billing processes, no matter how unique they are. They can set up, iterate, and manage a billing system without ever needing to rope in a developer. Along with billing flexibility, you also need to be able to experiment and iterate with different pricing models. 

• Do you want to switch back from a subscription model to a freemium model to increase your user base?
• Or are you worried about managing overages and custom-pricing units?

No matter what you need, your billing tool should be able to help you create any pricing model that you can imagine.

2. No-code contract builder

Most billing systems are structured linearly with a list of products and prices. These linear systems struggle to capture the more complex details of a contract. Even seemingly straightforward scenarios, like pricing credits in dollars with variable rates, pose challenges. 

To stay ahead of the competition, SaaS companies need to be able to price more flexibly and experiment with different plans without any constraints. Today, we’re seeing SaaS firms offer a wide range of pricing strategies and complex contract structures. The need of the hour is for companies to be more targeted and flexible about pricing and base it on customers’ feature needs and usage; in other words, price your offerings as close as possible to how much the customer values them. This is where a no-code contract builder will come into play. 

New-age SaaS billing platforms defy the limitations of conventional billing systems and help companies configure complex contracts using a drag-and-drop contract builder. Whether dealing with nuanced product details or complex usage-based contracts, these innovative contract builders enable sales teams to customize pricing models and contracts to match the customer's preferences and perceived value. This way, SaaS companies can maximize revenue growth and manage contracts more efficiently without sacrificing engineering bandwidth.

‍3. Usage tracking

SaaS companies are increasingly resorting to usage-based pricing models. For this, you need a billing system that comes with seamless data ingestion capabilities. While usage metrics can be extracted via APIs, using CSVs, or even manually — translating usage into charges for the invoice is another complexity that most tools fail to address.

Choose a billing tool that allows you to connect to your existing data sources and send usage data from your product or internal systems seamlessly via APIs. It should enable user-friendly integration for non-contractual data. 

Some of the more advanced SaaS billing platforms allow you to transform raw usage data into actionable inputs for billing by building usage aggregates. These tools summarize and interpret large volumes of usage data with aggregates, helping you iterate with pricing and add usage-based components to your existing subscription models. They also help you mitigate the risk of bill shocks by allowing you to share real-time usage trends with your clients.

4. Dunning systems

Managing accounts receivable takes up way too much time for finance teams. The tool’s capability to automate payment reminders and collections is a critical aspect that you cannot overlook when evaluating a billing platform.

Modern billing tools come with email management functionalities that let you automate debt management. This means that you can create and scale your debt collection communications using branded, customizable email templates. 

In addition to automated payment reminders and dunning sequences, the SaaS billing platform that you choose should help you configure preferred payment methods and track, monitor, and reconcile payments with ease.

5. Revenue recognition 

Here’s the thing — managing revenue recognition workflows using Excel spreadsheets results in a pipework of frustrating bottlenecks. It’s time to ditch manual calculations and break free from the limitations of Excel sheets.

The SaaS billing platform that you’re selecting should help you automate revenue accounting end-to-end and maintain full audit trails of all accounting entries. It should be capable of configuring custom revenue recognition rules and generating audit-ready accounting reports, all while adhering to the ASC 606/IFRS 15 five-step model.

6. In-built analytics module 

From customer acquisition to usage patterns and retention rates — SaaS companies rely on key metrics such as these to drive growth. 

Beyond gaining real-time access to business and financial data, make sure that the billing tool that you opt for is a central source of truth for all your metrics, enabling you to not just monitor financial performance but also create custom reports and dashboards that can be easily tailored to meet your unique business needs.

7. Integration capabilities with existing tech stacks

Along with the above functionalities, it’s also important to ensure that the billing platform integrates with your existing tech stack. 

A wide range of integration capabilities with popular third-party apps will help you sync customer and usage data, payment and tax solutions, and experience the ease of centralized billing.

Future-proof your billing workflows with Zenskar

It’s time for SaaS companies to maximize their potential by embracing flexible billing and pricing capabilities that align with evolving customer expectations.

At Zenskar, we believe in transforming billing from a challenge into a catalyst for growth. We’ve built a comprehensive billing system with advanced automation capabilities to cater to complex billing and custom pricing needs.

As a result, some of the leading SaaS companies globally rely on Zenskar not just for billing but for enhancing the entire revenue side of their financial operations. 

Ready to supercharge your billing workflows? Explore Zenskar’s sandbox at zero cost for 4–8 weeks before you come on board. 

Click here to schedule a demo with the team today!

Frequently Asked Questions (FAQs)

1. Why do companies use a billing platform?

Companies use a billing platform to automate and streamline their billing and invoicing processes. The more advanced billing tools have the capabilities to automate collections, manage recurring billing, recognize revenue, and ensure a smooth payment experience for customers.

2. How does a SaaS billing platform work?

A SaaS billing platform streamlines the billing process for SaaS companies by auto-generating invoices, sending out payment follow-ups, integrating with payment gateways to process transactions, and providing comprehensive financial reports.

3. What are the benefits of using a SaaS billing platform?

A few of the key benefits of using a SaaS billing platform include automating tasks such as calculating charges based on usage, generating timely invoices, sending out payment reminders, and integrating with accounting systems to keep financial records up to date.