One of the biggest impact of the cloud shift has been on the way customers expect to use and pay for services. Metered Billing or Usage-based billing /pricing is rapidly becoming popular across industries. Within the communications sector, customers are being charged for services used, For example, based on call data records and parameters like duration of calls, number of calls, time of call, etc. This mode of billing and payment is gaining in popularity in industries leveraging IoT applications. A food processing plant installed sensors in their storage facilities to monitor temperature. Fluctuations in temperature trigger an alarm for technicians to take corrective action.
Billing is based on a number of alerts or the data traffic consumed in the IoT network + a fixed monthly rental for the devices utilized. Next generation billing and revenue management systems for the UCaaS and cloud services space have to be able to manage metered and usage-based pricing models. MSPs and VARs work with multiple service providers, each with their own format for recording usage details. The billing system has to be powerful enough to analyze the complicated and varied data and tie it together for a comprehensive invoice. A flexible rating system to do the mediation and also the rating of the transaction based on specific attributes is a must for modern day businesses.
Flexible Billing Cycle:
How often does the customer have to be billed? This really is dependent on the kind of subscription plan the customer is on. Different subscriptions have different cycles- weekly, monthly, bi-monthly, quarterly or even annual or bi-annual basis. There are also different billing cycle models like on-demand or threshold models where the customer is to be billed once a certain usage threshold is met.
Some service providers might even want to customize billing according to the customer’s credit score, billing them almost a month in advance. It should also be capable of proration – figuring out partial or incomplete days in the billing cycle based on when the customer starts a subscription or when he wants to suspend the service and restart after a while.
“Managing diverse billing cycles without a flexible revenue management system might be a challenge. It allows the customer to choose their ideal plan and gives the provider the flexibility to follow that plan effortlessly and accurately.”
Invoices are probably your most frequent customer touch-point – brand them with your logo, header theme, brand colors, footer content, including invoice sequence number. This capability takes on a different kind of significance when the business model includes channel partners and resellers. Resellers typically re-brand products procured from a service provider.
In this case, the service provider’s billing system should be able to create invoices with the reseller’s branding and do the billing on their behalf.
“Billing on behalf” is a new concept that is rapidly gaining popularity within the communications sector because of its potential for nurturing a vibrant reseller ecosystem complete with reseller branding and customized invoicing capabilities.
Electronic Bill Presentation:
Electronic bill presentation is exactly what it sounds like – the system’s capability to generate an invoice and automatically send it out to customers as well. It should also be capable of collating separate different invoices and send the customer a consolidated invoice so that he is able to pay from one unified portal.
It should allow the service provider to then break up the single payment into separate specific payments for sub-services and products. When the customer signs in to the service provider’s self-help portal, he should be able to view the total amount as well as the individual components and then choose to either make a single payment or pay each sub invoice separately.
Invoice Auto Pay:
Digital wallets have made the payment process simpler and easier and allow customers to choose to auto pay for routine invoices. Systems with this feature incorporate a digital wallet on the customer self-help portal which is linked to customer’s preferred payment channels (credit card, ACH). There is also a default payment method for automatically paying the bill. The customer can set this feature up as a backup in case the primary payment method fails.
“A modern billing system should be equipped to manage the end to end payment life-cycle without customer intervention.”
It is important to ensure that the system is compliant with all online banking and digital regulations, such as PCI Complaint.
Accounts Receivable Management:
What happens if the customer chooses to pay by check, bank drafts or even cash? In such a situation, the system should be to connect the check to the corresponding invoice. It should offer features for even better receivable account management:
- Credit management: Credits are a part of any customer facing business. If a customer is unhappy or has been charged erroneously, they have to be given credits. The system should be capable of offering credits and adjusting them against outstanding balance.
- Disputes: In case of disputes on the invoice, the system should be handle it on behalf of both parties – the customer and the service provider. By taking the accounts receivable balance out of the customer’s balance until the dispute is settled. Regardless of who wins the dispute, the hallmark of a modern system is its ability to handle the dispute amount as part of the Accounts Receivable and adjust it to the customer’s outstanding balance.
Dunning and Collections:
Dunning refers to management of receivables from defaulting customers. The business must have a clear process by which the system can track and monitor receivables and payments, send out notifications to customers about due balance, track the ageing of the receivable statement and define the collection process for those customers who don’t pay even after repeated reminders.
Collections is a process of systematically correcting the behavior of delinquent customers by applying interest fee, late payment charges, or even shut of services (actions) as part of the accounts receivables management. The collections system is integrated with downstream provisioning systems that (as defined in the workflow for a business) shut off certain services or suspending customer account or termination of the customer services and write-off for the uncollected open balance.
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