What is billing integration?
Billing Integration: You integrate billing when you connect your billing system to other essential business apps and systems, like CRM, accounts receivable (AR), payment methods, e-commerce, and subscription management. To avoid manual data entry errors and smooth operations, you want to simplify and streamline the data flow between various platforms.
To put bills together, there are six main types:
- Native integration: Native integration means that apps made by the same company or made to work together can join without any problems. This is the easiest way to integrate payment systems because it doesn’t need much connection and works with many other systems.
- API (Application Programming Interface) integration: this type of integration lets data flow between different software programs and the billing platform. It lets developers connect between systems, integrations, and automatic processes.
- Cloud-based integration: quick and easy ways to link bills to different business apps using cloud-based services like Zapier or IFTTT (If This Then That). It only needs to be set up once and works best to streamline processes (for example, payment gateway -> billing -> accounts outstanding).
- Middleware integration: Adding middleware is essential because it lets payment systems talk to other systems that cannot do so directly. It changes data from one type to another, which lets you send and receive complicated data.
- iPaaS (Integration Platform as a Service): “iPaaS” stands for “Integra” ion P”atform as an “ervice.” This cloud-based platform lets you connect the payment platform to other software programs. It has robust features like data mapping, transformation, validation, and multi-system orchestration, and it is usually used for more complicated integrations.
- Custom integration: Means writing your code to link the billing app to other business tools.
Most companies will only ever need a native platform, an API, or cloud-based integration. However, more prominent companies with complex data flows may need middleware or iPaaS for the best performance. Custom integration is mainly used for corporate billing.
Synonyms
- Process integration for billing management
- Billing and payment integration
Why integrating billing software is a good idea
Billing and AP/AR processes may not seem very interesting, but they directly affect the one exciting thing: making money. If a business doesn’t have integrated billing, it can’t tell if it’s meeting its needs, keeping track of its cash flow, making intelligent choices, or even keeping its customers.
Set up automation from order to cash.
From the customer placing an order to the time they receive their goods or service after paying for it, this is called the order-to-cash process. With combined billing software, this whole process can be done automatically, with only a few steps that must be done by hand.
Customers will get their bills and pay them faster. For every payment that comes in, the system processes it right away and sends the money to the correct customer account.
Automated payments might not work the same for businesses with complicated sales cycles. If a customer or sales rep places an order, the website or CPQ tool can make a purchase order, take a down payment, send the order to the seller, and invoice when the product or service is delivered. This process can’t happen without billing, even though it uses other tools.
Synchronization of Data
Billing software, used to receive payments, is the primary source of financial data. Integrating billing will tell you if it is a reliable source of financial information.
Financial data helps businesses understand how they make money daily and track how well their sales and marketing are doing.
- Figure out the net revenue retention (NRR) and the customer lifetime value (CLV).
- Keep an eye on attempts to keep customers and know how healthy the customer base is.
- Let investors, partners, and the board know about progress.
- Guess what the future income will be. • Choose where to grow, where to cut back, and where to put resources.
Suppose the most up-to-date information about revenue is hidden in bills. In that case, it can’t feed algorithms that predict revenue, show trends in the customer base, or give stakeholders a current picture of the company’s health. These are all tasks that other systems can do.
Make sure the quote-to-revenue is correct.
Billing mistakes are annoying but even worse when the mathey’reems that handle the quote-to-revenue process aren’t linked.
The customer may be buying a service or a quote. This quote won’t be created immediately if it isn’t linked to the CRM or salisn’terations. Instead, a person in the sales or billing department who cannot see what is happening in their business manually creates the bill.
Many things can go wrong, such as wrong tax calculations, out-of-date price agreements, and missing discounts.
Cut down on revenue leaks.
Revenue leakage is the loss of money that companies make because of mistakes in their finances or operations. It costs them about 9% of their annual revenue. Leakage is easy to stop with linked financial systems because mistakes made by people usually cause it.
Billing and contract management platforms have ways to detect leaks, like when customer data doesn’t match and a tax code doesn’t mean customer information is out of date. Then, it can inform the company about any problems the billing team needs to fix.
Boosted Rate for Renewal of Subscription
Billing solutions take care of payments, but subscription management involves connecting with customers (like email campaigns) and helping them (like setting up a helpdesk).
When companies combine billing and subscription management, they can send personalized renewal reminders with all the information clients need, like payment amounts, invoices, and deals. This lets customers and account managers handle their subscriptions without talking to each other a lot.
Businesses should try to find a subscription management tool with built-in billing. Sales and customer success teams can then use the same tool to see all the data and workflows.
Compliance with Regulations
Companies can lose tens of thousands of dollars per penalty for not following the billing rules. Companies can easily follow rules like PCI DSS, GDPR, ASC 606, IFRS 15, VAT, and state and federal tax laws if they connect their billing software to other business systems.
Thanks to some rules, customers have the right to know how their data is saved and used. Others need some security or to see how money is being handled. Integration means data is encrypted and checked, and you can see a customer’s payment information in time. You can also remove a customer’s data if they ask customers to improve their experience.
Customers want three main things from their experience: speed, customization, and the ability to do things independently. For 60% of buyers, sales reps are not helpful at all. They don’t want to talk to a salesperson whenever they need to buy something. And they don’t want emails and interactions that are impersonal and not tailored to them. • Combining pricing data with sales software (like sales enablement, CPQ, and sales automation) lets businesses see what their customers are doing, what they’re interested in, and what they prefer. At every stage of the customer journey, this data can be used to customize interactions and keep customers interested.
- Payment gateway connections let buyers pay with a credit card or bank transfer without waiting for an email bill. If they connect to a website or customer portal, customers can manage their records, keep track of their payments, and change their subscription details from the website.
- When you combine CRM with payments, you can see a history of how customers have behaved. Companies can predict what customers will want in the future (and give it to them) if they know their buying habits, tastes, and past purchases.
Problems with integrating billing
As crucial as payment integration is for the smooth running of a subscription-based business, the road to getting there is not without problems.
There are six main problems to solve:
Syncing billing information between different systems
Because different systems store account and transaction data differently, getting everything to work together can be complex. In the long run, even small mistakes can cause significant problems, like failed deals or wrong financial reports. So, it is always hard to ensure that data across systems is correct and consistent.
Heavy Workflows
Billing for subscriptions and one-time purchases of complicated goods is not straight. They have many parts, such as discounts, upgrades, downgrades, cancellations, returns, and renewals. It can be hard to ensure that all of these parts work well together and don’t get stuck when moving.
The Gap in Technical Skills
It can be hard to understand and follow the steps using middleware, API integration, or a custom solution. Without the right in-house expertise, it can be challenging for businesses to set up and handle billing integrations. This cost increases quickly as a company’s customer base (and IT infrastructure) grows. You could get help from outside sources, which would cost a lot.
Differences between the budget and the needs
Big businesses can spend money on tools that help with complicated bills. But many startups can’t in their early stages. They can’t keep their business going without spending a lot of money on tools that help them keep track of payments and usage if their billing cycles are complicated, like usage-based, step-up, or pay-as-you-go.
Compliance with Regulations
It can be hard to ensure that the combined systems follow all the applicable rules and laws, such as GDPR, CCPA, PCI DSS, SOC, and tax laws. As rules change, your combined billing system must be constantly checked and updated to stay in line.
Maintenance for Integration
Billing integrations need to be maintained daily, just like any other technology. Human development resources are needed for API versioning, performance tracking, error handling, and system upgrades to accommodate new features or regulation changes. Without proper upkeep, even a system that works well together can fail or become a compliance risk.
Adding apps that work with a billing platform
CRM stands for customer relationship management.
Customers are the lifeblood of a business, and CRM software keeps them interested. Connecting your billing and subscription data to your CRM can create more personalized and automatic customer interactions. For example, you could send them reminders to renew their subscriptions with specific discount codes or account updates.
Self-Service Portal for Customers
If a business’s digital channel doesn’t fit their wants, 90 percent of customers will leave. And 87% would pay more for one that had a fantastic online store.
When you combine billing technology for billing integration with a customer site, you give customers safe access to all their payment information, invoices, subscriptions, and other information about them in one place. Even better, users can change their accounts without talking to a representative.
Websites and e-commerce platforms
When you connect billing to your website or e-commerce platform, customers can buy and handle subscriptions online without the sales team having to do it by hand. This also makes sure that prices and discounts are applied correctly. You can also accept more types of payments, such as a broader range of credit cards, PayPal, ACH transfers, and payments from other countries.
Set up, price, and quote (CPQ)
From the first setup of a product to the final sales contract, CPQ speeds up the process. But what happens next?
There is much room for error when the seller uses a different system to enter information about the goods and the bills. When you combine billing software with CPQ software, pricing, discounts, renewals, bills, and payments can all be done automatically from a single system. You can also keep track of customer deals in real time and ensure you follow the rules.
You’re in finance and Accounting
The AP and AR teams spend much time going back and forth between deals billed and those not. This process can take a long time, especially if the customer fails to pay a few days after sending the bill. When you connect your billing system to your finance and accounting systems, you don’t have to go back and forth much. This speeds up processes, which in turn speed up customer payments.
Recognizing income is another issue for businesses that constantly deal with contracts. Connecting your billing system to your finance and accounting systems lets you see how much income is recognized in real time. This ensures everything is correct and follows GAAP (Generally Accepted Accounting Principles).
Ways to make payments
Most e-commerce platforms have built-in payment methods, but connecting them to a billing integration can be more challenging when you connect your billing system to other essential business apps and systems, like CRM. By linking your payment gateway to your billing platform, you can keep customer payments safe while reducing the need for human data entry and the chance of fraud and other problems.
Taking care of orders
The delivery team must immediately receive information about how a customer sets up a product or bundle. People in the warehouse can start working on an order the same day if billing and an order management system are linked together.
Setting up services
One of the most important parts of professional services technology is billing. Billing for services, recording income at the right time, and keeping track of credits and invoices all need to be perfectly connected between billing and project management, CRM, and ERP. Manual billing would be even more likely to make mistakes and add to the administrative work for service businesses that already depend on manual input (i.e., to do their work).
