Subscription-based B2B business models are becoming more popular across industries, propelled by the vigor of users, suppliers, and investors. However, as they launch a variety of subscription services, many organizations discover that their inbuilt systems and practices cannot stay current with the operations and maintenance realities and service standards of subscriptions, which eventually restricts growth.
The comprehensive quote-to-cash (QTC) workflow of quoting, contract management, billing, collections, and renewals is an essential step to analyze and reimagine. Coordination between various departments, including sales, cost structure, financial management, legal processes, and customer engagement, is necessary to manage sophistication in the QTC process for B2B.
Format and Delivery of Invoices
One of the major challenges with payment processing and billing is that customers frequently have requirements that must be satisfied before they can or will pay, such as a particular format or posting to a specific customer portal. Others might call for a certain amount of customization, with specific fields or data elements being included on the invoice in order to facilitate approval.
According to research, higher-growth businesses generated nearly 90% of their invoices in digital form (such as PDF), a difference of 10% over their lower-growth counterparts. This is merely one component of automated billing and payments, which also consider the computation of invoice totals and the selection of payment options. All in all, it empowers businesses to adapt to shifting technological standards while offering the greatest degree of flexibility and satisfying a wider range of customer requirements.
Payment Procedures
In a similar vein, more and more customers are favoring e-payments. Higher-growth businesses react to this demand by embracing a variety of payment methods, including ACH (Automated Clearing House), credit cards, and electronic cheques. As a result, they receive more than 50% of their payments electronically as opposed to only 21% for other businesses.
Pricing Processes
When viewed from a quote-to-cash viewpoint, pricing tiers show how ready and able a company is to divide services into different customer segments and place demands on the backend to meet those needs. So, should you restrict the number of pricing layers in order to lessen back-office difficulty? Since higher-growth businesses have very few pricing tiers, our findings strongly indicate that the answer is indeed yes. In actuality, businesses with higher growth rates have one-third lesser rate plans for every active product than do businesses with lower growth rates.
Billing Procedures
Consumers are calling for a change away from monthly fixed pricing structures to ones that better reflect the innovative business value of the payment. For instance, customer-based, usage-based, or consumption-based pricing models enable them to only pay for the services they actually use. Subscription businesses need the ability to precisely measure usage and quickly and plainly explain the consumption to the customer in order to endorse invoicing of such value-based pricing models.
Product Catalog
If product catalogs are not managed efficiently, it could slow down the time to market. A comprehensive range of procedures is included in disciplined, active catalog management, including the elimination of superfluous products, routine evaluation of bundling options, and association of add-on products with core products. We discover that higher-growth businesses typically focus their sales on a smaller number of products.
Subscription Readjustments
Customers typically want the flexibility to adjust the level of their subscriptions in response to shifting business requirements at any particular time. This may involve adjustments to pricing tiers, packages, user counts, or usage specifications. Companies continue to struggle with how frequently to permit it and under which policy safeguards, although enabling users to scale upwards or downwards is a crucial part of the subscription life cycle. Our research demonstrates that companies with greater growth are more accommodating regarding subscription changes.
Higher-growth B2B Subscription Initiatives’ Benefits
Businesses that successfully balance organising around a strong core with providing customers with flexibility where it makes a difference to them most typically perform exceptionally well throughout all three drivers: acquiring new customers, expanding existing customer bases, and lowering customer churn. Talk to one of our experts at Magnaquest to gain better insights into how you can efficiently automate your B2B from quote to cash, with our robust subscription billing and CRM platform- SURE.
