Oh the pain — Product based billing systems in a subscription world

By Tien Tzuo July 22, 2008

by Tien Tzuo

 

One word that surfaces often in conversations we’re having with companies is “pain.” The pain of managing all of those spreadsheets. The pain of manually generating so many invoices and collecting revenue. The pain of closing the books at the end of the month with Quickbooks. The pain of having to hire yet more temps to reconcile changes. They are clearly in a lot of pain.

 

One of our customers was using nine different spreadsheets to manage their subscriptions before we saved them from the dark side of billing. I even experienced it myself while working on the billing solution for salesforce.com, on one side, we had an army of finance temps processing changes to subscriptions while on the other, 40 percent of our development team was focused on creating an automated system to manage the process more effectively. I recall a great deal of pain.

 

The lesson here is that if you’re a SaaS or subscription company, traditional billing systems will overwhelm you as you’ll quickly outgrow them. They are simply not built for the subscription model. All that time you’re spending on managing the billing is time you should be spending on growing your business. This lesson was learned early on by Zuora customer TopRight, a start up providing marketing database solutions to online retailers. This one man show realized quickly if he’s going to quickly grow his subscription business to a million in revenue (and he will) he can’t spend his time and money on traditional billing practices.

 

If you think you may be in pain, check out our “Top Ten Signs You Need an Online Billing System.” Running a subscription business doesn’t have to be hard.