All You Need to Know About Calendar Billing, Its Benefits, and Implementation in SaaS
The billing process is an important part of any business. Because each business has different requirements that necessitate different billing approaches, a one-size-fits-all billing approach may not be feasible in the long run. Subscription companies typically bill their customers on the date they sign up or when their subscription is activated. This standard billing process, however, may not be appropriate for all business scenarios. Your company may want to set a consistent billing date for all of its customers and align all subscriptions to make it easier to predict and track revenue. Calendar billing allows you to set specific billing dates for your customers regardless of their signup date.
What exactly is calendar billing?
Calendar billing is a billing model that allows business owners to set a specific billing date for customers regardless of when they signed up for the service or product. While there are various pricing models to choose from, the business must still decide on the billing type that best fits its organization’s practices – either anniversary billing or calendar billing.
Anniversary billing occurs when you bill your customers based on their subscription date. Calendar billing, on the other hand, is when you decide to bill your customers on a specific date, regardless of their purchase date.
Benefits of Calendar Billing
In SaaS, there are multiple benefits of calendar billing that directly link to recurring billing and recurring billing management in SaaS. Few of them are predictable revenue, workload management, and many others that will be discussed in detail further.
Workload administration
You can set up multiple billing dates for your customers using calendar billing. As a result, customers can be divided into batches based on when they sign up for the product. Each batch can be assigned a dedicated support team to answer questions and follow up on unpaid invoices. As a result, the teams will not be overburdened throughout the month, with each customer having a different billing date, increasing business efficiency.
Revenue growth
Setting a consistent billing date makes it easier to invoice customers who have multiple subscriptions. Instead of sending individual invoices on separate billing dates, the invoices can be consolidated and sent as a single invoice on the billing date set by your company. It greatly benefits both customers and businesses. Consolidated invoicing eliminates the need for customers to deal with multiple invoices and allows them to pay for all of their subscriptions at once. On the other hand, it prevents revenue leakage caused by lost invoices and late payments.
Predicting Revenue
Synchronizing all subscriptions to a single billing date would result in a single payday for your company. So, once a billing date is set and the customer is set up in the recurring billing model, you can proceed with confidence that payments will be made on a specific date.
You will know how much cash will flow into the business not only during each billing cycle but throughout the customer lifecycle because both the payment and frequency were established at the time of purchase. You can accurately predict and measure your expected revenue, which is useful for making wise investment decisions for business growth and expansion.
Implementing Calendar Billing in SaaS
Sending consolidated invoices is the first step in implementing calendar billing. Consolidated invoices are essential for businesses that provide multiple services to a customer and must send each invoice separately. Consolidated billing saves merchants and customers time by allowing them to send a single invoice on a synchronized date rather than sending multiple invoices on multiple dates.
Another method of implementing calendar billing in SaaS is to synchronize the different billing dates for all subscriptions to a uniform billing date, resulting in uniform calendar billing.
This helps the SaaS businesses and merchants to predict the revenue easily while tracking and monitoring the revenue.
To implement calendar billing in this manner, the merchant can assign a unique date to the customer that corresponds to both their financial cycle and your billing cycle. It is advantageous to both the merchant and the customer.
Final Comments
If you are looking for a subscription management platform that can implement calendar billing to your business then SubscriptionFlow is the right choice. Head over to SubscriptionFlow and schedule a demo with them!
