After all, the networking of people, machines and products is a win-win situation for the service concept, Usage-based services and to develop new business models from this. The implementation of a smart solution for the customer and the company should not be tackled too late, as the billing and payment aspect Many touchpoints in the customer journey and usually the traditional accounting systems in companies reach their limits here.
In our IoT customer projects, we have repeatedly experienced that the design of billing systems prioritized too late or even underestimated becomes. A connection to a Payment Service Provider is not enough, because this is only about the the pure payment aspect, but not the billing process. With usage-based billing, some billing processes differ from the conventional process. This usually requires the existing systems to be expanded to meet the new requirements. This becomes clear when you consider that with networked services No simple product items with fixed price tags more and the customer still Pay transparently according to use wants.
Nevertheless, many product owners on the customer side ask themselves the question: Why do I need a billing system if I already have integration with the payment gateway?
Both systems deal with the Collection of payments. Recurring payments in the form of a subscription are also already available. Payment gatewaysthe so-called Recurring Billing' support.
However, an important difference in the billing system is the Management of subscriptions and customer relationshipswhereas a payment gateway guarantees the reliable Payment processing focused. Chargebee, a billing system provider based in India and the USA, brings this to life in its Subscription management manual very well to the point: "Because recurring billing is just one spoke of the subscription wheel."
The billing system is the The linchpin in the billing process. Based on the contracts concluded with the respective customers, invoice items are created that transparently show the customer what must be paid for, when and why. Business unit-specific aspects such as tax rates and tax rules need to be considered. The Price calculation the billing system plays an important role. Here, as part of the rating process, the final price, based on consumption and performance datacalculated.
What billing systems need to do for digital business models
Triggering the recurring invoices is only one part of the whole.
Other aspects that a billing system must bring to the table - i.e. other spokes of the wheel - include:
- The Processing and evaluation of usage data in the case of pay-per-use models
- The support of a Role and rights management for the administration of different campaign and subscription plans
- The Management of different tariffs and contract management in the event of upgrades or downgrades or when switching to different billing frequencies
- Campaign management in the form of Coupons and discounts
- The Invoicing and billing taking into account different taxes and currencies as well as other market-specific requirements
- The management of the Dunning process
- The Generation of notifications depending on the status of the respective customer account
- Provision of Reports and real-time evaluations
What should be considered when introducing a billing system?
In general, it should be noted that the billing system is easily integrated into the Existing IT system landscape of a company should be integrated. It is often necessary to Centralized customer data management system and Connect existing price and product catalogs. In addition, there are also often Central communication and document management systemswhich must be connected for sending notifications and billing documents. The billing system is therefore THE central component in billing and must therefore be stable APIs to be able to carry out the integration easily and effectively.
Billing should not be underestimated when designing service-based business models. Because Billing is much more than just paymentas a glance at the "Subscription Wheel" shows.
It is therefore important to understand this at an early stage in the development of digital services, Which business processes are affected by billing as this has a direct impact on the customer experience - the customer journey - and thus contributes to the Acceptance and loyalty on the customer side contributes.
Learn more about billing
You might also be interested in this article: Six steps to simple billing of flexible tariff models
Sources:
https://www.chargebee.com/resources/guides/subscription-billing-and-management-guide/
https://www.doubleslash.de/en/services/monetization-solution/
