What is Subscription Management software?
Subscription management software, also called subscription billing or recurring billing software, automates the billing cycle for subscription revenue models. These tools have become increasingly important with the rise of SaaS businesses. For start-ups especially, lighter weight subscription billing applications (which are inexpensive and fast to implement) can allow businesses to start processing online payments quickly. Fewer legal, finance, and accounting resources are required to manage different subscription cycles for different customers/accounts.
Subscription Management Software Features & Capabilities
Payment Gateways connecting with credit card companies making it easy for customers to use any card without having to submit to Payment Card Industry (PCI) compliance.
Support for Merchant Accounts. These are bank accounts that allow your business to accept money from payment cards.
Subscription Management handle subscriptions and make sure the right accounts are charged the right amount every month.
Analytics systems or dashboards providing at-a-glance data on customers and sales.
Dunning tools work to mitigate the impact of failed payments by ensuring customers always have updated credit cards on file.
Revenue Recognition systems automate accounting processes and ensure that revenue is only booked for products or services delivered.
Here are but a few important considerations for buyers of recurring billing software:
1. Will you be processing international payments? If so, make sure to select a product that can handle multiple currencies.
2. Will you be selling to businesses or consumers (B2B vs. B2C)? If you are selling to consumers, they will likely want to use a credit card (or a service like PayPal), methods which are supported by all subscription billing platforms. But, if you are selling to businesses, you may need to select a product that also supports invoicing/ other forms of payment.
3. How important is branding at the point of sale? Be sure to ask about the degree of customization available on the payment page (where customers interact with the subscription billing software). For some industries/products, if the look & feel of the payment page is different from the rest of the site, it may affect conversion.
4. How many transactions will you have on a monthly basis, and of what size? Subscription billing vendors tend to charge either a flat rate, percentage, or combination rate per transaction, so the most cost-effective solution will vary depending on the frequency and amount of payments processed.
5. Are you using an eCommerce platform? Your eCommerce vendor may already provide billing features and services that can meet your needs. If you are already using an eCommerce platform, but need more robust subscription management features, make sure the product you select integrates with your storefront, and determine how email communications (about purchases and payments) will be handled between the two systems.
Several vendors charge a transaction percentage of 2 % or 3% plus an additional transaction fee. Some vendors charge a more traditional tiered subscription price ranging from $500 per month to $1,500 per month, depending on number of customers. Some users use a combination of both.