B2B billing software has evolved rapidly over the last few years, because it has to address a hugely expanded number of business needs. Companies no longer rely solely on static bundles or a single sales motion — instead, complex hybrid pricing models, options to purchase self-service or via a sales person, and frequent mid-term alterations are becoming the norm. The result is a dynamic customer journey that loops back on itself with complex calculations of price based on many different pricing vectors. 

Legacy billing software just isn’t able to handle this complexity very well. And that’s quickly becoming apparent to many companies that haven’t adjusted their billing technology in a while and are finding themselves unable to meet new go-to-market requirements — particularly around novel pricing and sales channels. Modernizing your billing infrastructure can have a beneficial ripple effect for every team involved in the sales-led quote-to-revenue and product-led channel motions. Sales, Post-Sales/Customer Success, Finance, and Products/Engineering all benefit from what modern billing software can do — not to mention the benefits to customers, for whom an excellent billing process can serve as a differentiator. 

There are three key factors that elevate modern B2B SaaS billing software above legacy tech — namely, the ability to:

1. Unify data across any kind of go-to-market motion (Hybrid Pricing and/or Hybrid Channels).

2. Enable Sales to confidently produce quotes and sales orders that Finance can follow through on with invoices, even with extensive mid-term alterations.

3. Give Finance high visibility into RevRec data, plus the ability to automatically consolidate that data.

Let’s look at what it takes to achieve all three.

Back in the late 2000s and early 2010s, the SaaS space relied heavily on subscription pricing. Unsurprisingly, this means legacy billing systems can handle subscription pricing in a vacuum, but falter with anything else. This is an issue, because most companies today offer a “hybrid pricing model” with different pricing structures for different products (Think subscriptions or usage-/consumption-based pricing for SaaS, one-time fees for physical goods like telephones, and milestone pricing for professional services).

Because their legacy engines only work well for subscription pricing, companies that offer “hybrid pricing” face two unattractive options: 

1. Purchase or build additional billing engines, one for each type of pricing needed.
2. Calculate pricing by hand, which is intensely time-consuming.

More fragmentation occurs when companies have multiple sales motions led by different teams — most commonly, sales-led growth (SLG) and product-led growth (PLG). As the names suggest, sales typically spearheads SLG, while product and engineering teams spearhead PLG. Many companies opt to simply institute parallel billing engines for each, rather than integrating both into a unified system.

“Simply” is a misnomer, as nothing about having multiple billing systems is simple. The customer needs a single invoice at the end of the billing period — yet multiple billing systems produce multiple invoices. Creating a definitive “master invoice” requires an integrated network of billing providers, custom code solutions, and data warehouses, plus all the staff needed to bring them together.

“Nothing about having multiple billing systems is simple.” 

And all of these moving parts come at the cost of transparency and accuracy. Customers receive a bill that is hard to follow, and that bill may well contain errors. Naturally, this can strain customer relationships and impact the bottom line through revenue leakage. These complications also mean that customers need to ask for help if they want mid-term changes, even if they acquired products through self-service sales motions.

Three Key Solution Components:

1. A Single Unified Invoice for Any Hybrid Pricing Model

No amount of work or infrastructure can make the “fusion” of multiple invoices fully transparent or reliably accurate. Thankfully, new universal data models allow for a single, inherently unified invoice for every kind of product and pricing type, spanning across usage and consumption, subscription, physical goods, professional services, and more. They also integrate seamlessly into traditional CRM and ERP systems. 

2. Unified Billing Across PLG and Direct Sales

Creating a unified invoice requires the ability to sync direct sales orders with self-service orders (including initial website self-service orders and in-app self-service orders). So look for a provider that offers self-service APIs integrated to CRM for this purpose. This allows for a consistent and seamless unified billing experience regardless of the channel customers use to make purchases. And this kind of invoicing model facilitates a new kind of self-service option. Namely, users can create custom quotes and orders that combine product-led and sales-led growth motions.

3. Real-Time Invoices for Mid-Term Changes, Upsells, or Renewals Across Channels

Given how frequently mid-term adjustments take place in modern billing, it’s no longer sustainable for these adjustments to be done manually. Automating mid-term adjustments gives time back to Sales, Post-Sales, and Finance (especially the latter). And customers are no longer left hanging while go-to-market teams coordinate behind the scenes. Plus, a clear, line-by-line price change in the invoice provides customers transparency, building better relationships over time.

While mastering the quote-to-revenue process is undeniably critical for the success of modern enterprise, Sales has poor visibility into that process. Typically, once Sales generates a sales order, it needs to get Finance Ops to review it and create matching product catalogs and orders in their separate billing engine or ERP system just to invoice the customer.

“While the quote-to-revenue process needs to be smooth and reliable for modern enterprise to succeed, Sales has often had poor visibility into that process.”

If Sales has committed to a deal that doesn’t align with the company’s current SKUs, Sales Ops or RevOps may choose to create a new, slightly tweaked SKU. While this can resolve the issue in the short-term, this strategy creates the dreaded issue commonly known as “SKU proliferation.”

This isn’t to say that Sales is even in control of the product catalog. If CPQ, billing, and ERP systems desynchronize, Sales teams may need to arbitrarily change the catalog they offer to customers, simply because billing can’t support what Sales originally offered. In turn, this requires a back-and-forth with Finance to ensure that the adjusted catalog can be supported. And if the sales order and the invoice don’t match in the end, that’s a problem for Post-Sales, who has to handle the customer backlash. 

Three Key Solution Components:

• Real-Time Billing Flow from CRM to Finance, in One Implementation

In order to avoid fragmentation and training delays, the Sales team should be able to track and manage the entire customer journey using something it already has — namely, its CRM. And as Salesforce is the most popular CRM out there (not to mention a great way to drive innovation), odds are you will be looking for billing tools that are seamlessly integrated with Salesforce — tools that are closely integrated in the sales process all the way from opportunity to close to upsell to renewal. Such an integration means that only a single tool needs to be implemented to cover the entire quote-to-revenue process.

If you can establish a 360^o view of the customer’s transactional revenue journey in your CRM, Sales and Post-Sales can be confident that billing challenges won’t undermine what they offer customers. And Sales can leverage comprehensive knowledge about customers to better push for upsells, cross-sells, and renewals. For example, knowing the precise contributions of each product to annual recurring revenue (ARR) is critical for identifying upselling and cross-selling opportunities. 

• Immediate Invoice Updates When Mid-Term Alterations Occur

Mid-term alterations are often a challenge for Sales, because Finance may not be able to support the quotes and signed sales orders that Sales generated. If improved technology allows for automatic invoice updates, without the need for any Finance intervention, Sales can quote with confidence. Bonus points if invoice updates can be initiated in a CRM (while still allowing Finance the final audit approval), so Sales and Post-Sales teams can preview invoices to learn what has changed.

• Invoice Preview In the CRM for Sales and Post-Sales

Invoice previews are an emerging best practice with a few major benefits. Customers gain an improved understanding of billing structure, which can lead to an improved perception of transparency. And Finance Ops can use preview invoices to better predict cash flow. But creating them is a heavy lift for Finance, which has many better ways to spend that time.

If Sales and Post-Sales teams can generate an invoice preview directly in their CRM, it spares the Finance team while ensuring the invoice is easy for GTM teams to have on hand to show customers.

Detail is the lifeblood of finance, as billing has no margin of error and the cost of errors is steep. If finance discovers a bill isn’t accurate, the manual modification process takes time and employee-hours — to say nothing of the impact to reporting revenue accurately. As companies focus increasingly on expansion revenue, legacy billing systems have an unfortunate tendency to not track mid-term changes well in their data models — compounded by the fact that the process of adjusting the bill is highly manual.

“Detail is the lifeblood of finance, as billing has no margin of error and the cost of errors is steep.”

Finance teams typically have to manually track and correct upsells, downsells, and cross-sells. If any errors slip through the cracks, that goes on to complicate the process of re-calculating revenue reporting and revenue recognition. Even worse, Finance teams can’t report on revenue to their execs or board with efficiency — nor identify key trends around expansion strategies and product performance.

Three Key Solution Components:

• Highly Detailed, Accurate Invoice Data and Revenue Reporting Even After Mid-Term Changes 

Precise automated record-keeping (especially for mid-term changes) is a boon for Finance teams in several ways. It ensures that mid-term changes do not harm the integrity of reporting and analytics data. And it allows for real-time revenue visibility that instantly reflects changes, so billing becomes much faster as well. 

Plus, it’s now possible to set up a data flow for the entire pipeline using a turnkey solution. This spares companies from needing to cobble together data from CPQ, billing, provisioning, and manual processes for the sake of gaining revenue insights and establishing revenue recognition. Such a comprehensive view allows for automatically calculating revenue changes over the entire customer lifecycle and compensating for alterations as soon as they happen. This view also makes it easy for Finance to see trends in upsells and cross-sells for the sake of determining future revenue, while creating a single view of revenue data that sales and finance can both use.

(A note: By default, many modern billing solutions prioritize subscription-based pricing. If you handle anything outside of that, you need to specifically confirm your SaaS billing of choice can handle it. Examples include the sale of physical goods, like phones, or consumption-based billing with events-based RevRec.)

• Catch Up Billing Run Functionality to Support Billing System Migration 

If you transition away from a legacy billing system, this can alienate customers, since it’s not uncommon to inadvertently charge them for things they’ve already paid for. “Catch up billing run” tooling automatically syncs customer invoices, so there is no risk of duplicate bills.

• NetSuite and QuickBooks Integration for Payments, Credits and Refunds

Finance teams spend a lot of time manually entering details into NetSuite and QuickBooks: the time is likely excessive, but this does mean that Finance is highly proficient with NetSuite. Modern billing software builds on this by allowing invoices to automatically migrate into NetSuite and QuickBooks with 100% accuracy, while letting Finance teams leverage their familiarity with NetSuite to handle general ledger, invoice, and collections in one place. In effect, modern billing makes traditional financial systems smarter and able to work with more GTM agility.

Embracing modern SaaS billing is about more than just ensuring you can keep up with customer purchases. There’s a chance to catalyze real innovation, doing more with fewer tools. Unifying data across once-disparate teams ensures everyone involved in the go-to-market motion can present a unified front for customers, regardless of what a customer is paying for, or what pricing model they’re using to do so. And mid-term changes no longer need to portend lengthy manual corrections on the billing side.

When customers receive accurate bills faster, it builds good will. And since Sales will have access to up-to-date analytics data, the team can quickly determine how to compound on that good will by anticipating customer needs.

To learn more about how Nue provides everything needed to modernize B2B SaaS billing, visit Nue’s Billing solution page.