How to automate recurring billing?

27.11.2017

Creating invoices for your business can be a time consuming process. In this blog I'm going to tell you about the challenges and solutions on how to automate recurring invoicing.

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Recurring invoicing

Companies need to invoice services monthly, quarterly or yearly. Here are a few examples of such invoicing.

  • Cleaning or IT-support
  • Marketing (e.g. Google AdWords administration)
  • Ad sports (e.g. on the side of a taxi or a bill board)
  • Electronic services (e.g. e-mail or Internet Connection)
  • Security services

The wrong way to do your billing

Companies with growing pains and even older midsized companies might have terrible processes in place. Re-creating the same invoice every time with the some content is time consuming.

When running a small IT-services company, I used to use an Excel sheet to keep track what and when I had billed. From the information on the sheet, I would re-create the same invoice except type in the different billing period.

It should be obvious that this is a bad process and leads to typos and mistakes. Sometimes I would just forget to bill a customer.

Bad ways of doing recurring invoicing

  • Manually re-create from scratch
  • Copy the previous invoice as a base for the new
  • Use Recurring billing -function in accounting software

Recurring invoicing in accouting software

The main task of accounting software is to do the accounting part and provide basic invoicing functionality. You can easily do a single invoice but automating the content of a invoice from time tracking, contracts or random billables is next to impossible without proper tools.

Here is a link to Xero's recurring invoicing -function's support page. Don't get me wrong. Xero is great! It just can't do everything. 

The function on Xero uses one invoice as a base to replice itself. There are, how ever, several limitations to this.

  1. There is no contractual data attached to it
  2. There is no sales process available
  3. Reporting is invoice based (meaning it is reactive)
  4. No dynamic content avaible

notification.svgMost personel (customer service and sales) cannot access accouting software. This makes the process of editing a contractual invoice a manual one. Salesmen are e-mailing (or writing post-it notes) someone in charge of billing about the changes to a customer's charges.

Accounting software typically don't have a proper sales process like one you might find in a CRM software. There is also rarely a "one person checks everything" -process. Meaning that salesmen might actually end up affecting an outgoing invoice without the person in charge of billing knowing about it.

Recurring invoicing feature doesn't have any smarts to it. You cannot get good reporting. For example, how has the value of the contracts increased or decreased over time. Is the salesman in charge of customer X notified if the customers contract is about to end?

What are subscription based solutions?

Zuora and Chargify (among others) are great solutions if you want to provided self-service subscription based billing to your customers. The difference is, that the customers is purchasing without a sales person or customer service person. This is great if your business works that way! But alot of small and mid-sized companies have ten, fifty or a hundred customers. These customer relationships are managed manually. In these cases subscription based solutions just don't work.

The right way to automate recurring billing

How should you organize your billing then? By using the right tools and clear billing methods. I created the Bill Talent cloud service to address the issues I just talked about.

The way I see it is that you need a proper contract management system that automates the creation on the invoices. To create a contract you need to following basic information.

  • Customer (with billing details)
  • Products and services (including prices, VAT, units etc.)
  • Start date, invoicing period etc.

From this information you can have automated invoicing, great reporting and a tool that everyone can use, but if needed, only one can inspect and send invoices.

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Bill Talent was created for my IT-services company. First features were contract managent, automated invoicing and integration to accounting software. All ready-to-send invoices were transfered to the accounting software and send from there. This literally saved 90%+ of the time I just to spend on recurring invoicing without making any mistakes. Today I basically just click "select all and send".

Bill Talent is coming in late 2018. Please sign up and we will let you know when you can start saving your time!

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