Without a flexible revenue management platform, adapting your offering in response to changing customer demand may prove challenging.
If you’d asked any Australian business leader to make a list of the things that could make or break their organisation a couple of years ago, there’s a fair chance billing systems wouldn’t have made the top five.
Historically, the process of capturing and accounting for revenue was very much back room business. While a vital operational process, it was not one senior executives felt the need to concern themselves with.
That’s changing though. In 2023, local leaders are coming to the collective realisation that billing process automation and an agile billing platform are necessities, at least for enterprises with aspirations of growth.
Focusing on flexibility
The term ‘agile billing’ refers to revenue management infrastructure that enables an organisation to monetise and charge for its product or service offering in a variety of different ways, quickly and cost effectively.
Why does it matter so much?
Because the way in which individuals and organisations choose to buy goods and services is evolving, and quickly too. Businesses that want to capture and retain their customers need to evolve apace, or risk losing mind and market share to competitors that are better able to respond to their needs.
In both the consumer and B2B spheres, there’s been a shift away from purchasing outright. Instead, more buyers are looking to access what they need on subscription – everything from the software applications they use to run their businesses to machinery, equipment and motor vehicles.
But pivoting to a new revenue model can be challenging and disruptive for businesses that don’t have the appropriate billing technology.
There’s also the risk that getting it wrong could damage your brand and business. Receiving an incorrect invoice is unlikely to imbue customers with confidence in your organisation as a supplier.
In fact, there’s research to suggest that they’ll take their trade elsewhere, if it happens repeatedly. The Customer Experience Impact Report by Harris Interactive found that 86% of customers quit doing business with a company due to a bad billing experience.
Bad billing can also lengthen the collection cycle and slow down cash flow. Indeed, customers will wait to complain until the bill is almost due, then report it. This results in the company having to issue a new bill, perhaps providing the customer with another 30 days for payment. The result is potential ongoing direct financial impact to the vendor.
Tools to make the task easy
That’s why it’s critical to have a new generation revenue management platform in place. Far from behind-the-scenes technology, it’s a strategic digital asset that will provide full quote-to-cash support for whatever monetisation model, or models – recurring, subscription, usage based, hybrid or dynamic – your enterprise chooses to adopt.
Ideally, it will integrate seamlessly with the ERP application that powers your business, be that SAP or Microsoft Dynamics, and the eco-system of other solutions in your technology stack.
Your revenue management platform can also be an unparalleled source of business intelligence, one which allows you to generate reports that illuminate the customer journey and the ways in which today’s buyers are accessing your offering.
Those insights can be used to make data driven decisions that will enhance your offering and help you keep the customer satisfied, as their purchasing needs evolve over time.
Optimising your operations
There should also be the opportunity to extract actionable insights that allow you to optimise internal processes, such as new business development and debt recovery, thereby increasing the sustainability and profitability of your enterprise.
With the right platform in place, identifying anomalies, such as month-over-month and year-over-year spikes and dips in invoice counts, late invoice closing and approvals, and subscription variances and expiries, is a straightforward matter.
So too is the ability to predict expected monthly and annual revenue, determine average days outstanding per account, proactively manage churn, and view aging and billing trends.
Embracing the new
Still not sure whether agile billing technology will be a must-have for your business in 2024 and beyond?
Then ask yourself the following: Are we able to bring new offerings to market in a matter of days, rather than weeks and months? Can we introduce packages, bundles and promotional offers quickly and easily? And is it possible to change our pricing model without investing in expensive and time-consuming modification of our billing system?
If the answer to any of these questions is ‘no’, then you’ll know that it’s time – to overhaul your revenue management infrastructure and open your enterprise up to long term, sustainable growth.
Building on a strong foundation
In today’s times, the capacity to adapt and pivot is a key determinant of success for businesses of all stripes and sizes. Those that fail to do so risk losing mind and market share to more agile competitors. Against that backdrop, investing in revenue management technology that enables your organisation to evolve its offering swiftly and at scale is likely to prove a critical move.