Is your Business Data Supported by A Dependable ‘Single Source of Truth’ To Efficiently Drive Decisions?
In business, managers and executives know the value of the past, present, and future. It is important to learn from past mistakes, while also building on successes. And, it’s imperative to consider the future when making valuable decisions, and forecast revenue and trends.
However, the present is critical, because the here and now is what is controllable and manageable. When it comes to data integrity, the present eclipses both past and present.
What do I mean by that?
Let’s say you have a SaaS (Software as a Service) business that offers three different packages. On the first day of the month, a customer purchases your gold plan, with enough licenses for 5 employees. They love it and start telling co-workers that the software is the perfect solution. Nine days later, that customer calls you again because another 8 employees want access to your product. So your business needs to adjust the entitlements and billing data for 13 licenses.
A few days later, the customer realizes that they don’t need all the features in the gold plan, and want to downgrade to the silver plan. So, yet another adjustment needs to be made and another X-number of systems need to be updated.
If you are tracking all these changes manually, errors are bound to happen.
Your business needs proven systems to capture changing data. It also needs a platform to maintain the integrity of that data. That platform should be able to reflect those changes in real time, which is critical when businesses are monetizing their services or products.
It is critical to select a platform that encapsulates the power of real-time data in order to provide a single source of truth (SSOT) for users — one that they can turn to with full confidence that they can use that data at any time for real results.
There are different options that businesses may explore, only to find that they come up short when capturing data that can be considered the SSOT. Growth-oriented billing capabilities necessitate a more robust solution to efficiently maximize monetization efforts.
CRM (Customer Relationship Management) platforms: Too many hands in the cookie jar
Some may argue that a CRM can be considered a SSOT.
CRMs compile data, such as lead and customer contact information, including phone numbers, mailing information and points of contact, allowing users to improve communication through a variety of mediums.
This approach relies on a live database, allowing users to make changes in real time, make notes and pull in other supporting files on that potential or current customer.
With CRMs, businesses can track where a lead resides in the sales pipeline, and use data analysis to really learn the preferences of their target audience.
A benefit of CRMs is that they are user-friendly and thus, many different people in an organization have access to these platforms, including salespeople!
Therein lies the problem with data integrity: the information is subject to anybody making a change, whether it’s simply updating the contact person, or changing the number on a sales quote. In other words, the data is not always reliable.
Don’t get me wrong; a CRM is a powerful tool and a lot of businesses benefit from the information captured. However, its easy access makes it susceptible to incorrect data and thus a highly suspect SSOT.
Accounting systems: Great for tracking data history, not so hot for current data
Another often-used solution is an accounting platform. Accounting systems are useful for processing financial transactions and generate useful reports to provide a solid financial history.
Accounting systems are your system of record for period-end closing, AP and at-time AR. They are great spots to keep all financial information in one place, and can produce nice, computerized invoices. Plus, if someone is coming from a place where they physically created invoices for every customer, accounting software certainly can speed up the billing process.
When a recurring billing business is working solely with accounting software, though, they have no real way of looking at current information, never mind future projections without using archaic/manual Excel spreadsheets. Hardly a dependable SSOT.
ERP (Enterprise Resource Planning): Toes the billing line, only along a straight path
ERPs grew out of Materials Requirement Planning (MRP) approaches popularized in the 70's that combined an inventory management system with modules to reconcile account balances and provide status updates.
With ERPs today, those components are integrated with other departments such as accounting and customer service.
This system is great for some sales processes. If I’m a business that sells devices on a one-time basis that need to be shipped, an ERP would manage the process well. Basically, it takes the information from the CRM, generates a quote, receives an order, fills the order, issues an invoice, collects the payment, etc. If you look at a visual representation, the traditional sales model is completed in one straight line, from information gathering to order fulfillment and payment collection.
Again, an ERP is a good platform for one-time purchases, but it simply does not have the capacity to handle the changes demanded by a recurring revenue stream.
Consider the example I mentioned before, where adjustments can be made to a subscription many times over, even in the same billing period. Although an ERP shines in the traditional, linear sales model, the dynamics of agile billing cannot be supported in this fashion. This is a huge impediment to any agility in your monetization efforts and cannot serve as a reliable SSOT.
Subscription management and recurring billing software: Keeping an eye on all the balls in the air
The traditional sales model of one-time purchases was disrupted many years ago, giving way to the subscription model. Customers find lower-cost subscriptions more appealing than a purchase with a much higher price tag.
The subscription model, by nature, takes that linear approach suited to an ERP system and gives it a good shake. Imagine each of those components — quotes, orders, provisions, collections, and so forth — as individual ping pong balls. With recurring billing, those ping pong balls often bounce back and forth, according to the demands of the customer.
If you think about the SaaS customer example who changes plans and users, that exchange isn’t linear. It might go from the quote, to the order and the invoice, but then a change is made, such as an upgrade or additional purchase, and the process bounces back to the quote process and starts all over again.
And in each bouncing ping pong ball is data — real-time data. By putting all those balls under an adaptive recurring billing software umbrella, the platform quickly becomes that SSOT that drives monetization trends effortlessly.
That SSOT is a much-needed component in any growing SaaS business, because it is the one place any person in the business can go to get reliable, consistent, updated information, no matter where a customer is in their subscription life-cycle. It does not matter if the information is needed by the Executive team, the marketing department, someone in accounts receivable, etc., it’s readily available.
Real-time data is the ‘sweet spot’ for agile billing transactions and needs to be your single source of truth
Why is it so important for data to be looked at with a present-thinking eye? Real-time data is critical for monetization efforts, but it is not always as simple as it may seem. At Fusebill, we work with hundreds of businesses each year. The majority engage with us, not because they have a billing problem. They have an overall business problem, and many times it all boils down to data integrity.
There are a number of people within a business who need accurate, real-time data.
1. Customers. Your customers require (and expect) full transparency when they enter into an agreement with your company. For example, if their subscription includes both a monthly fee and a usage fee (such as paying for the data they use), that customer will demand to see exactly how much data they use at any time within the billing period. Your customers are insisting on access to their pricing and usage data in real-time, and, in many cases, online.
2. Sales and customer support. Both the sales and customer support teams need to be able to access data at any given time to help serve the customers’ needs as efficiently as possible. It might be time to renew a subscription, quote new features, etc., and these team members require access to this data in real-time from the billing system.
3. Finance. Your finance team needs to be able to access financial data at any time. This could be to close out their books, to report to the executive team, or to use as backup at audit time.
4. Operations. Personnel in the operations department are tasked with keeping a business running as smoothly as possible to maximize profits. Data accuracy is integral for the operations department to ensure efficiencies.
5. C-level executives. Executives do not just answer to their customers; they also answer to their board of directors and investors. These people have made considerable contributions to making sure a business is successful, but they need accurate data in order to see how the business is doing.
Data is the essential cog in the wheel of recurring billing. That data needs to be accurate and updated automatically to provide strategic intelligence and give your business the competitive advantage. An adaptive, robust recurring billing solution creates that critical economic bridge between a subscription business and its customers, providing the most practical platform in which to house and supply the SSOT data that is needed, today.