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In a subscription business, the billing process carries the predictable revenue. However, many SaaS companies still depend on manual billing processes and outdated billing materials and tools. When billing mistakes pile up, your cash flow takes the hit, leading to customer losses and revenue decline.
But despite all of that, these eight common billing mistakes are preventable with billing automation and the right billing platform.
1. Failed payments because of insufficient funds
This is one of the most common billing errors around. Failed payments can become unpaid invoices and lost revenue without alerts or retries. Other related causes include a lack of smart payment attempts and backup payment methods, and limited access to multiple payment gateways.
Billing automation for subscriptions is possible through:
- Automatic retries throughout the billing cycle, reducing failures and maximizing revenue collection efficiency.
- Supporting multiple payment methods.
- Utilizing account updater tools to refresh payment details to reduce involuntary churn and boost customer retention.
2. Missed or delayed invoices
Errors happen when teams send invoices manually, especially with setups such as multiple subscriptions and complicated billing frequencies. Payment delays and missed invoices can hurt your predictable revenue.
The common causes are typically a lack of payment reminders and dependency on the sales team. To ensure fewer payment disputes and consistent cash flow, automation can address this by:
- Creating accurate, auto-generated invoices.
- Releasing scheduled payment reminders.
- Not relying on manual follow-ups.
3. Inaccurate pricing and plan changes
Upgrades, downgrades, and add-ons can create billing errors when you tie them to spreadsheets or to your system.
They’re caused by:
- Incorrect pricing plan charges.
- Failure to prorate mid-cycle.
- Wrong charges on the customer’s account.
Automation helps you achieve error-free customer payments and real-time subscription management. There’s also an accurate proration in your recurring billing system.
4. Revenue leakage from manual processes
Manual processes can lead to errors, especially when reconciling payments across your tools. This may bleed your pockets dry, or in business terms, revenue leakage. It’s a loss of money due to insufficiencies, errors, or fraud.
Revenue leakage occurs due to inconsistent payment processing, a lack of a unified billing system, and poor visibility into recurring billing issues.
Automation includes centralized billing software, automatic payment reconciliation in your payment system, and access to clear reporting tools to support better business growth and operations.
5. Poor handling of multiple payment gateways
Pouring all your payments into a single payment gateway is risky. The revenue stops when a certain payment provider suddenly crashes.
Common recurring billing mistakes include limited payment strategies, zero gateway-level entries, and redundancy. Automation can handle this with built-in support for multiple payment gateways and intelligent routing for payment failures, protecting your cash flow.
6. Tax and revenue recognition errors.
Global subscriptions can bring more complexity to your business. Improper revenue recognition and manual tax calculations can make the business owner run compliance risks.
These errors occur because there is no tax logic per region, inconsistent billing frequencies, and disconnected billing materials.
Automation fixes these issues by applying region-specific automated tax rules, ensuring consistent financial tracking and easy audit readiness.
7. Lack of visibility into the billing performance
Common billing problems can go undetected for weeks or months until customer churn shoots through the roof. The warning signs include zero insights into unpaid voices and a lack of tracking for failed payments.
But with automation, you get access to real-time dashboards and receive alerts when payments fail, helping you track and coordinate your finances.
8. Poor integration with other systems
When third-party integrations fail, billing becomes a foreign concept to the business. This can result in a broken payment system, increased human errors, and duplicate data.
Automated billing can sync your payment with analytics, support, and customer relationship management tools. You can also access end-to-end subscription billing control to keep your customers patronizing your business.
Why Billing Automation Is Important?
Billing automation protects revenue. A modern billing platform with automated billing software can reduce recurring billing errors and improve customer payments.
That’s why a platform like ThriveCart is essential to maintaining balanced cash flow and keeping your business afloat. This powerful checkout and billing platform automates recurring billing, payments, and subscriptions. It gives you greater flexibility to create high-converting checkout experiences.
Final thoughts
If your team is still facing common billing mistakes, it’s time to revamp your system. Automation helps prevent costly errors fueling business growth and customer satisfaction. Complaints about your payment system and customers leaving your brand are out of the way.
