Future-proof Your B2C Subscription Business: Streamline Billing and Revenue Recognition

B2C subscription businesses face a clear mandate: grow fast or get left behind. Whether you’re in streaming services, meal kit delivery, fitness apps, or any other subscription-based industry, agility is no longer just important—it’s mandatory. 

The need for agility is nowhere more apparent than in billing and revenue recognition. The ability to adapt quickly and efficiently manage your monetization processes can make the difference between leading the market and falling behind.

In this article, we’ll discuss how several companies have successfully embraced flexibility and agility in their processes.

Balancing Innovation and Operations

Growing subscription businesses typically adjust pricing strategies every six months. This constant iteration becomes challenging when organizations find themselves caught between product teams’ rapid innovation and IT teams’ implementation capabilities. As businesses scale, initial monetization processes often fall short, requiring more customizations and manual workarounds.

This situation isn’t sustainable for growing B2C subscription businesses. When billing operations aren’t optimized, finance workload increases with every new strategy test. Introducing usage-based pricing might require manual calculations for every bill. Opening new sales channels could mean manually entering orders. New business models often demand more accounting resources and customizations. These approaches lack the scalability and agility needed to keep pace with the growth rate B2C subscription businesses must achieve.

So what’s the answer?

Agile Monetization Processes

To future-proof your B2C subscription business, you need monetization processes that can scale with your business. This means leveraging a flexible billing and revenue recognition system that can handle order processing, billing, payments, collections, and revenue recognition. Your system should be equipped to handle every new business initiative, from launching new subscription tiers to implementing usage-based pricing, expanding to new market segments, or preparing for an IPO.

However, organizations often fall into common pitfalls when trying to solve these problems:

• Creating homegrown billing systems might seem tailored to specific needs but often proves rigid and requires constant IT involvement for changes.
• Extending ERPs is another tempting option, but these systems weren’t built to handle the complexities of recurring revenue models common in B2C subscriptions.
• Lightweight solutions may work initially but lack the depth of functionality needed for complex use cases and full quote-to-revenue automation at scale

The ideal solution provides agility to pursue new growth strategies, IPO readiness, synchronicity across systems, compliance with financial regulations, and a streamlined approach to finance that will grow and pivot with you.

Several companies have successfully navigated these challenges through strategic implementation of subscription management platforms:

• Zoom demonstrates the power of flexible billing infrastructure, implementing a platform that supported multiple growth initiatives and enabled 215% year-over-year usage scaling since 2016. This rapid growth would have been impossible with traditional billing systems.
• DocuSign‘s adoption of a reliable and flexible enterprise subscription platform showcases how robust systems can support product expansion across various sectors while maintaining operational efficiency.
• TeamSpirit’s transition from a homegrown system to a comprehensive subscription management solution exemplifies the benefits of specialized platforms. By simplifying finance and accounting elements, the company redirected resources toward application development and customer value creation.
• Siemens Healthineers presents a compelling case for automation in subscription management. By automating their revenue recognition process for digital services, they reduced manual steps by over 60% and shortened revenue processing time by 75%, demonstrating the significant efficiency gains possible with the right system.

Future-Proofing Your B2C Subscription Business

Future-proofing B2C subscription businesses requires monetization processes that scale with growth. This means implementing flexible billing and revenue recognition systems that can handle order processing, billing, payments, collections, and revenue recognition. The ideal system should be equipped to handle every new business initiative, from launching new subscription tiers to implementing usage-based pricing, expanding to new market segments, or preparing for an IPO.

A successful B2C subscription business requires a partner that understands the nuances of subscription models. Key considerations for subscription management platforms include:

1. Agility to support current goals and future business objectives
2. Scalability built on an enterprise-ready platform
3. Integration capabilities with APIs for custom feature development
4. Automated daily revenue recognition processes
5. Complete visibility into all transactional data
6. Minimized risk of data miscalculations from manual processes

With robust, flexible billing and revenue recognition systems in place, B2C subscription businesses can:

– Pursue new growth strategies quickly

– Support complex pricing models

– Expand into new markets seamlessly

– Ensure compliance and accurate financial reporting

– Focus resources on core business activities and customer value

The ability to adapt quickly and manage monetization processes efficiently remains crucial in the subscription economy. Implementing the right systems early establishes a foundation for long-term success and sustainable growth. This enables organizations to shift focus from managing billing and revenue recognition issues to driving innovation and delivering subscriber value.

To see more monetization challenges, and to learn how to avoid them, see our recent article from David Warren, Sr. Director, Subscribed Institute, and Michael Mansard, EMEA Chair, Subscribed Institute.