Navigating the Complexities: Effective Solutions for Top 10 B2B Subscription Billing Challenges

5 min read
03 August 2023

When transitioning to or scaling a B2B subscription or recurring billing business, you will likely encounter several hurdles that may interfere with the operational efficiency and scalability of the transition.

Thanks to solutions like Cloudmore, others are available! These obstacles can be effectively addressed. Here's a look at the top 10 challenges that B2B businesses commonly face and the solutions that can help overcome them:

1. Inefficient processes or compliance

Even if you are not a regulated company, inefficient manual processes can introduce risk to a subscription business and can lead to significant financial losses. The subscription model means that payback on sales can be 12 months or more away, so maintaining control and excellent customer service through this period before payback is vital. And solid operational processes support accurate subscription billing

Solution: Utilize a billing platform with embedded processes

Using an automation platform, you will get processes out of the box to help your teams be efficient from day one. Logging of actions by your internal teams or customers will ensure compliance with approved processes and the training opportunities highlighted. Robustly managing the customer lifecycle, which is often a continuous process with B2B subscriptions, will ensure accurate consumption or subscription billing and reconciliation.


2. Automatic renewals

One of the most important processes in the subscription world is the renewal process. Renewing a B2B subscription may not be as simple as a consumer subscription where there might be many people in the decision or contractual process, and offline work needs to be completed, including a renegotiation, that does not happen with Netflix! Therefore, the management and automating of renewals may be complex and cannot be left to chance, particularly with a high volume of subscriptions.

Solution: Implement an automated renewal system

Any sophisticated subscription management platform will prioritise, handle and automate the renewal process. Still, you need a renewals process that can handle the variations required for your business, renewing to a new SKU, for instance, custom notifications and reporting that allows your account team to identify the most valuable renewals, reducing the potential for human error and guaranteeing that no cancellation or renewal is missed.


 3. Pricing management

Price management is a huge topic in the B2B subscription world. It is certainly not a one price fits all situation. Handling customers' specific pricing or even multiple contracts in the same customer can stress manual management or a system made for simple consumer-style subscriptions or a standard ERP or billing system. It very quickly becomes a volume management activity where automation can break because of the sheer volume of transactions, especially if you offer monthly subscriptions.

Solution: Leverage a dynamic price management system

A dynamic pricing management system allows for global, customer-specific, and deal pricing flexibility. Look for the price lock logic and ability to create offers and schedule pricing, as it will streamline the process of setting and modifying the pricing of your subscription services, ensuring your transactional and bespoke contracts are accurately reflected.


4. Usage or consumption models

Handling usage and consumption subscriptions can be challenging, and often there is a complexity and volume of the input data, making processing and calculating the correct amount very challenging.

Solution: Use a tool that is capable of pricing large volumes of data

There are two ways of handling this situation. The first is to pre-process the data before it hits your billing tool. The challenge with this solution is that the pricing rules might live in a different system so the consolidation can be done, but often the problem is not solved. The second solution is using a platform that can ingest large volumes of data, generally via API.  


5. Processing and analyzing large volumes of billing data

Data volumes will inevitably grow over time. It is not just about the data within the current billing month; the historical months must be stored for review or trend analysis. This will require the retention and access of large volumes of data.

Solution: Choose a billing management system that is built for subscription data

There is no way around this, and conventional billing tools are just not built to store and analyze large data sets, which means that a separate data lake or database will be required. These can be expensive solutions depending on the size of the data set. Having one tool with the ability to retrieve and process data and the functionality to export or access data via API will ensure the correct data is available for you and your customers.


6. Customer-related challenges

Without a self-service portal, the customer experience will suffer, and business customers have expectations around support response which often mean a valuable self-service. It's also costly to manage low-value support tickets, reducing customer satisfaction.

Solution: Provide a self-service portal for customers

In most cases, providing an excellent self-service experience with rich functionality is a must. Customers should be able to manage the provisioning or purchase of new subscriptions and manage changes. Of course, view billing data independently. If customers are self-purchasing, checks and approvals are also required, as good logging needs to be in place to reduce the risk of fraud or bad debt, or just costly mistakes.


7. Integration with other business systems

The additional metadata required for subscriptions, including renewal data about payment frequency, renewal terms, and in-life changes, gets exponentially hard as the volume builds. Ensuring adjacent systems are kept up to date with the master data source is crucial to avoid manual processes, human interactions, and built-in errors.  

Solution: Ensure your platform of choice has Robust APIs and Webhooks

APIs and webhooks are the glue that holds everything together. Often a pre-built integration may not match your data needs. This functionality will facilitate the automation of end-to-end workflows and seamless integration with CRM, ERP, or accounting software, promoting operational efficiency.


8. Operational efficiency

Over time, we have heard many stories of time-consuming manual practices becoming the norm, where expensive human resources are deployed to complete recurring repetitive tasks. This kind of work destroys creativity and innovation, and work feels purposeless. Time and resource allocation can become quickly burdensome without efficient, automated workflows.

Solution: Employ End-to-End Workflow Automation

A B2B multi-level subscription platform is designed to handle the integrations and transactions through the supply chain, joining processes between tiers. Processes like approval, renewal, and allocating users to services or upgrades should be able to be handled by any authorized and trained staff member without deep technical knowledge or specialist skills, creating agility and scalability.


9. Customer satisfaction

With Subscriptions, it is possible to build fantastic customer-centric relationships because of the ongoing interaction between the provider and the customer. Conversely, delivery in a poor experience can cause costly churn.

Solution: Focus on exceptional customer relations

One of the most important functions of a modern SaaS company providing its services on a subscription basis is the Customer Success Team. The team responsible for the customer getting the most value from the product and quickly identifies churn risks. Investments in this team will normally be worthwhile.  


10. Transition to Subscription-Based Model

Transitioning to a subscription-based model can be a significant challenge for businesses. It is not just a different business model. There is a financial impact, operation process disruption, and retraining of customer teams. The decision required investment, careful cash flow management, and constant optimization in the early stages.

Solution: Engage with a Dedicated Digital Commerce Transformation Partner


Cloudmore acts as your digital commerce platform transformation partner, assisting you in making this crucial transition. Cloudmore's customer onboarding and customer success teams facilitate a smooth shift to a subscription-based model, driving growth and innovation by streamlining and automating subscription and recurring billing management.

By effectively addressing these challenges, businesses can streamline their operations, improve customer service, and strengthen their bottom line, thus unlocking their full potential. With a platform like Cloudmore, overcoming these obstacles becomes a journey of transformation, efficiency, and success.

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