There are several ways to approach recurring billing solution, and your company must make the right choice for success. First, you should take into consideration the type of recurring billing your company needs to support. Also, you will need to make sure that the solution you choose matches your way of doing business.
When deciding on a recurring billing solution, consider:
- ease of payment plan set up through the user interface or API;
- ease of adjusting existing payment plans;
- availability of revenue to estimate how much money will come in the future;
- ability to analyze billing history;
- support for decline recycling and other collections process functionality.
Three Types Of Recurring Payments Businesses
Some features may be more important to you than others. Does your company fall into one of the three most common categories of companies dependent on recurring billing?
Subscription-based online businesses. These companies suspend a customer’s service using the open payment plan model and billing on the yearly, monthly, or weekly. If there’s a problem with a payment, they take little or no collections effort. These companies typically offer a number of payment plans. Therefore they have relatively modest recurring payment feature requirements. Forecasting is simply because there is a number of plans and no adjustments, deferments, or freezes.
Salesforce businesses. Such businesses deal with physical locations. They may use an open payment plan and complex recurring payment needs, including the ability to pay commissions to salespeople, analyze seller performance and forecast. To determine the reasons for billing differences from one seller to another the billing difference analysis is useful.
Businesses that make collection efforts. Companies require agreements and potential payment plan adjustments. They need a recurring billing solution with deep, wide collections functionality. This includes collections logic and declines recycling to collect past due accounts and retry transactions. These businesses usually have a sales force and need to analyze results carefully as well.
Recurring Billing Solution Software Architecture
Recurring billing solutions have developed along three lines of software architecture:
The payment-based model. This model focuses on what a customer pays and not what they owe. This model is simple to implement and easy to use.
The invoice-based model. With this model customer debts and future billing dates look like the form of invoices. It’s easy to manage cancellations, freezes, pre-payments, and other adjustments. But when there are several payments plans to choose when a single customer is. Distinguishing between invoices can be difficult. Having a separate system for one-time payments is usually a good solution.
The charge-based model. This model includes both payment plans and invoice functionality. Invoices are important only for tracking purchases made in the past. A charge tracks future payments. At the appropriate time, a charge becomes an invoice. This model offers all the advantages of both models. But there is no risk of intermingling, and it’s easy to track how much a customer owes at a particular time. Plus, forecasting, adjustments, and other changes and reporting are easier to perform.
Your business must choose a recurring billing company. The best choice would be a solution offering features and a software architecture model. To learn more about the recurring billing features of UniPay, a complete payment processing solution, please contact us.
We’ll help you make sense of recurring payment solutions.