What is SaaS Billing? - 5 SaaS Billing Software Compared

An adaptable SaaS billing engine isn’t just a tool for finance—it’s a strategic advantage.

At Zenskar, we recognize the challenges caused by inefficiencies in SaaS billing. Drawing from our founders' experiences building in-house billing systems twice, this blog dives deep into the challenges of billing for SaaS companies and how to solve them, how to choose the best SaaS billing software, and a comparative analysis of major vendors.

What is SaaS billing?

SaaS billing refers to how Software as a Service companies manage subscriptions and collect payments. Unlike one-time payments in traditional billing, SaaS billing is complex due to varying client contracts and billing models.

There are three primary SaaS billing models: subscription-based, usage-based, and hybrid. Subscription-based billing involves recurring fees for software access, while usage-based billing models charge customers based on actual use. Hybrid models combine elements of both. Examples of standard SaaS billing models include pay-as-you-go, per-user, tiered, flat-rate, feature-based, bundled, and freemium.

SaaS billing involves handling different pricing models, managing usage data, generating and sending invoices, automating dunning and collection workflows, and finally, offering a self-serve platform for upgrades, downgrades, refunds, and cancellations.

Managing these complexities manually or with unadapted software will drain your time, resources, and business growth potential.

SaaS billing challenges and best practices to tackle them

SaaS billing complexities require implementing best practices to address them effectively.

1. Evolving SaaS pricing

Most legacy SaaS billing tools run on archaic architecture and often lack the flexibility to adapt to modern pricing strategies such as usage pricing, sales-led contracts, or new monetization approaches, limiting a SaaS business's revenue potential.

Best practice: Value-based pricing supports long-term SaaS growth by ensuring customers are paying for the value received. Our co-founder, Saurabh Agrawal, caught up with Dan Balcauski, founder of Product Tranquility, in a webinar, where he suggested:

Adopt a SaaS billing platform that supports limitless flexibility and experimentation in SaaS pricing and aligns with your business growth objectives, such as expanding into new markets or customer segments.

It should also integrate with usage-tracking systems to automate billing for fluctuating consumption without disrupting day-to-day operations or increasing engineering overhead.

2. Aligning billing with your growth model

The requirements for a billing system differ significantly between product-led growth (PLG) and sales-led growth (SLG) models. A billing tool without self-serve capabilities that cannot handle a surge in customers or provide predictable software spend may hinder scalability for PLG companies. Conversely, a billing tool lacking integrations with CRM or support for complex contract configurations can disrupt the quote-to-cash process for SLG companies.

Best practice: Mountu Jinwala, who built billing systems for Netflix and eBay, shared tips on aligning billing with growth in a webinar with our co-founders:

If you’re running a PLG company, your billing tool must prioritize scalability and self-service functionality to align with user-driven growth. On the other hand, if you own a SLG company, your billing tool should provide seamless integrations and robust compliance support to meet the structured demands of sales-led operations.

3. Managing multi-currency & global sales taxes

Some billing solutions struggle to keep up with evolving tax regulations, and managing global customers adds challenges like multi-currency setups.

Best practice: A billing platform with built-in capabilities for regional tax compliance or integration with tax automation tools like Avalara. It should support multi-currency payments and real-time currency conversions as well.

4. Real-time reporting

Handling refunds, account credits, one-time payments, discounts, and cancellations can significantly impact the relationship between billing workflows and reporting on MRR and ARR. Delays in SaaS insights impair time-sensitive business decisions.

Best practice: A billing system with real-time analytics to provide actionable insights into key SaaS metrics, such as cash flows, churn, and revenue trends, ensuring more informed decision-making.

5. Manual billing processes

If you manually manage various plans, billing cycles, and adjustments for upgrades or downgrades, there are likely delays and errors. Implementing sales programs like discounts, promotions, or coupons manually using a legacy system is also costly and labor-intensive.

Best practice: A centrally managed and automated billing platform automates billing and sales programs by eliminating manual effort. 

6. Handling SaaS revenue recognition

Revenue recognition in compliance with standards like ASC 606 or IFRS 15 can be challenging if your billing system cannot distinguish between when products/services are billed and when they are delivered. Correctly accounting for revenue and recognizing it over the subscription term is essential for accurate financial reporting and investor confidence.

Best practice: A SaaS billing platform that automates revenue accounting by assigning transactions and recognizing revenue in real-time. The platform should maintain audit trails, support custom recognition rules, and generate audit-ready reports while adhering to ASC 606 and IFRS 15. Beyond that, it should provide insights into revenue patterns, unlocking the full benefits of SaaS billing software.

Benefits of a SaaS billing software

SaaS billing platforms simplify billing processes by automating tasks like calculating invoice amounts, sending invoices with detailed line items, and collecting payments through payment reminders while keeping your financial records in check.

1. Speeds up your go-to-market process 

SaaS companies often build first and figure pricing later through experiments, but using the wrong billing tool can lead to lengthy integration processes. 

Updating your pricing tiers, tracking usage data, and syncing everything with your billing system is time-consuming and can harm potential revenue. According to the rule of 78, a customer onboarded in January contributes six times more annual revenue than someone onboarded in July. 

However, when you use a SaaS billing tool designed for your specific pricing models, you can integrate modules with your billing system and launch new products in hours, if not minutes. 

2. Improves user experience

Have you ever subscribed to a SaaS product only to be frustrated with its billing workflows? We're not talking about dark user experience patterns like purposely making it difficult for users to unsubscribe from a tool — though they're bad for business. 

It's the small things — like Notion not emailing users the invoice every month — that, when compounded, can irk customers and lead to a sub-par user experience. With SaaS billing software, you can iron out many of these — an easy-to-navigate customer portal, one-click payments, or automated invoices. 

3. Saves engineering bandwidth

If you've read our other blogs, you'll know we're big believers in buying a billing system instead of DIY-ing it. Our co-founder Saurabh's experience managing in-house billing systems at his previous companies is one of the reasons we feel strongly about automating SaaS billing at Zenskar. While at BC Jukebox (B2B SaaS), it was a combination of in-house tools for invoicing and estimates, at Basepair, they had to build a custom tool over their existing billing system to send invoices.

It goes without saying that buying a billing system can free up your engineering team so they can focus on the core product. 

How do you choose the best SaaS billing software?

When evaluating SaaS billing software, look for a platform that:

1. Simplifies complex billing scenarios with minimal technical work
2. Integrates with existing data sources to send usage data
3. Automates payment reminders, dunning, and collections
4. Integrates seamlessly with your tech stack
5. Supports multiple payment methods
6. Provides detailed business and financial analytics
7. Manages revenue recognition automatically

Check out our detailed guide on choosing the right billing system.

5 best SaaS billing solutions 

Here’s what to know when choosing the top billing software for your business.

1. Zenskar 

Ideal for B2B SaaS companies, both PLG and SLG, needing scalable, automated billing software.

Pricing flexibility

As long as you can describe your pricing in English, Zenskar can encode it to automate billing. It supports every imaginable subscription, usage-based, and hybrid pricing model, including tiered, volume, milestone, dynamic pricing, custom sales contract, and more.

Zenskar also decouples metering from pricing, allowing you to iterate on pricing without altering your metering setup, adjust your metering without impacting existing contracts, and configure vast flexibility with usage-based pricing.

Integrations

Zenskar stands out for its usage integration with enterprise data warehouses. It consolidates granular usage metrics from 200+ out-of-the-box sources to unlock deeper insights into usage behavior. It supports 100+ currencies and integrates with Avalara to handle local taxation. We also have well-documented APIs for further integration flexibility.

Additional features

Zenskar is not just a SaaS billing software; it offers the same flexibility beyond billing for accounts receivable, revenue recognition, analytics, and reporting. 

It's a next-generation billing platform featuring an intuitive UI. It is API-first and automates billing workflows, dunning, payment collection, and reconciliation with zero engineering effort. Multi-currency and multi-entity support ensures businesses can manage global operations efficiently.

Customer support

The team acts as an extension of the in-house team, guiding customers through every stage—migration, implementation, and post-go-live—with high-touch, personalized, and prompt support on Slack, Zoom, and email.

Free trial & pricing

Unlike competitors who charge a percentage of revenue, Zenskar’s pricing is not directly linked to your revenue. The exact quote depends on the complexity and scale of your revenue automation needs, so you only pay for what you need. 

While a free sandbox is available, the commitment-free pilot program is unmatched. The team will configure sample contracts, data flows, and invoices so you can see the platform live in action.

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2. Stripe Billing

Suitable for B2C and eCommerce businesses with straightforward subscription models.

Pricing flexibility

Setting up usage-based pricing or custom terms—like prepaid subscriptions with postpaid overages or matrix and tiered pricing—can be challenging with Stripe. Each custom pricing model typically requires separate product configurations, and since multiple products on a single invoice must use the same currency and billing interval (with a 20-product limit), billing quickly complicates. 

Integrations

Stripe is reliable for processing payments, but it doesn't offer a native CRM integration, and its compatibility with payment methods outside its ecosystem is reportedly inefficient. 

Additional features

Stripe offers simple invoicing and supports multi-currency and basic dunning features, but it lacks the ability to customize invoice templates and automate SaaS invoicing for complex pricing models. While Stripe is a user-friendly billing platform, it doesn't support detailed reporting on SaaS metrics and requires external tools or manual processes to manage RevRec.

Customer support

Stripe primarily provides support via email, but it is slow. It can be frustrating for businesses that need quick resolutions to urgent billing issues.

Free trial & pricing

Stripe’s 0.7% fee on billing volume makes it costly as you scale. Additionally, invoicing and tax support are offered as paid add-ons. The self-driven sandbox requires technical expertise, making Stripe a developer-friendly billing platform.

3. Chargebee

Ideal for eCommerce and B2C/B2B SaaS companies with simple subscription models.

Pricing flexibility

Chargebee is a subscription-first billing platform. While it can handle one-time, flat/seat-based, and recurring billing, it has limitations in managing usage-based pricing scenarios, like milestone-based contracts. Transitioning between product families can cause data loss and invoicing issues, reducing flexibility in managing different access levels.

Additional features

Chargebee's interface is functional. It supports a limited range of payment methods and currencies, which may limit its suitability for international operations. Invoicing features are rigid, with limited options for template customization and restrictions on editing line items or consolidating invoices. While Chargebee automates basic dunning and revenue recognition, its reporting capabilities must improve when handling large datasets or custom business models. 

Integrations

Chargebee supports limited payment methods, so custom integrations are required for some gateways. Integrations like NetSuite or Salesforce also come with extra costs. Its CRM integration could be more efficient, often requiring manual work to sync data.

Customer support

Live chat and callback options are exclusive to paid plans. Email support is available to all customers.

Pricing

Chargebee's pricing can become expensive as your business scales. It starts at $599/month for up to $100k in monthly billing and then adds a 0.75% fee. While a free plan is available for startups with early traction, the cost can escalate due to add-ons. Furthermore, self-driven sandboxes are only available on the Performance and Enterprise plans.

4. Maxio

Best-suited for PLG SaaS companies with simple usage-based pricing models.

Pricing flexibility

Maxio can handle simple usage-based models like tiered, stair-step, events-based, and metered billing. However, it requires engineering bandwidth to work with complex pricing. It only supports complex UBP scenarios like wallet-based transaction options and hybrid billing, limiting its scalability for sales-led SaaS companies.

Integrations

Maxio integrates with all industry-leading payment gateways. However, technical support is needed to ingest more than 200k events/day, which can be a deal-breaker for companies having large transaction volumes.

Additional features 

Maxio's collection features are limited to payment failure retries, and collections and dunning must be managed manually. Invoice emails require separate creation for each payment method, and payment reminders cannot be sent before the due date. Due to its restricted architecture, its revenue recognition is limited to vanilla subscriptions and needs a fully synced accounting system. Maxio's reporting and analytics capabilities are also limited, with metrics such as ARR and MRR being challenging to fetch. 

Customer support

Enterprise clients receive more personalized service via a dedicated account manager, leaving small and medium businesses with limited direct assistance. 

Free trial & pricing

Maxio's pricing model starts at $599/month for SaaS subscription billing with up to $100k monthly billing, after which overage fees apply. Add-ons like Account Receivables, Payments, and Metering are extra, significantly increasing costs and making it an expensive choice for many businesses. While it offers a sandbox for testing, this is only suitable for developers.

5. Zuora

Ideal for enterprise-grade PLG and SLG companies with a high volume of transactions.

Pricing flexibility

Zuora supports various subscription, usage-based, and hybrid pricing models but faces limitations due to its legacy subscription-first structure. It needs to work on inflexibility around custom payment plans. The pricing changes require engineering bandwidth similar to Maxio, making it less adaptable to rapidly changing business needs. 

Integrations

Due to its complex setup, Integrating Zuora with accounting systems and CRMs often requires custom development work. While Zuora allows for custom integrations upon request, its poor API documentation makes these integrations easier to execute without relying on technical support.

Additional features

Zuora's UI is clunky, with a steep learning curve. Its invoicing system can be confusing, as users cannot easily view specific line items, potentially leading to disputes over billing amounts. The dunning process requires extra setup. Revenue recognition is challenging, often needing manual adjustments or third-party tools. Additionally, Zuora's reporting capabilities could be improved.

Customer support

Enterprise customers benefit from dedicated account managers for troubleshooting. However, some users note that while support is available, it may only sometimes be timely.

Free trial & pricing

Zuora provides a 30-day free trial, but its robust functionalities come with a premium price tag. Hidden fees further complicate budgeting as businesses scale.

Step into the future of SaaS billing with Zenskar

The SaaS billing software category is evolving, and most vendors in the market need to be more clunky or were built over a decade ago. 

At Zenskar, we believe in transforming billing for SaaS companies 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, globally leading SaaS companies turn to Zenskar to build a successful SaaS billing engine. Book a free demo to see if Zenskar is the right fit for you.

FAQs

1. Why is SaaS billing complex?

Legacy SaaS billing tools complicate billing with challenges like mapping customers to product users, limiting data processing for usage, and requiring new subscriptions for pricing changes.

2. What’s different about SaaS billing compared to traditional billing?

Unlike traditional billing systems, which charge a one-time lump sum upfront, SaaS billing supports recurring subscriptions, flexible pricing like usage-based models, and automated invoicing.

3. How can you streamline B2B SaaS billing?

A B2B SaaS billing platform streamlines the billing process by auto-generating invoices, sending payment follow-ups, integrating with payment gateways to process transactions, and providing comprehensive financial reports.

4. What is the best SaaS billing software?

Zenskar is the best SaaS billing software for B2B companies looking to automate billing and revenue recognition for complex subscription and usage-based pricing. It also offers usage data metering, receivables management, analytics, and SaaS reporting.

5. What is a good SaaS software for invoicing? 

Zenskar is an excellent SaaS invoicing software for B2B companies. The platform automates sending invoices, usage reports, payment reminders, and dunning sequences and offers invoice customization with brand logos and fonts.

6. What are the common SaaS pricing models?

Examples of common SaaS billing models include usage-based (pay-as-you-go), per-user, tiered, flat-rate, feature-based, bundled, and freemium pricing. 

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