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www.ventanaresearch.com © 2017 Ventana Research Streamlining Finance Processes for Subscription Billing The subscription business model has grown in popularity with providers of services or products because it establishes a regular, predictable income stream. This is particularly true for technology companies. However, the subscription model poses challenges, primarily in handling the accounting and billing for subscriptions. Our benchmark research on recurring revenue finds that only 29 percent of participants who have finance and accounting roles, and fewer than half overall, are satisfied with their subscription invoicing process. As for complaints about the process, most (79%) said it requires too much effort. Simple subscriptions (such as for a magazine) are handled easily by any financial system. Today's subscription business models, however, are complicated by billing methods such as usage-based charges, discounts, seasonal plans and adding or subtracting users during the period. Our research finds that a majority of companies use four or more billing methods. Accounting for these variations can be further complicated because the data specifying the details of the subscription may be kept in multiple systems. Complexity notwithstanding, mistakes in invoicing have a cost. Overbilling customers diminishes their satisfaction while underbilling them creates margin leakage. To keep the billing details straight, accounting departments typically resort to creating massive, time-consuming spreadsheets. There is a solution to the complexity problem: software that automates the billing process from contract to collection. This single system of record connects all the steps from sales (and its contracting and CRM software) through finance and accounting (and their ERP systems). Such a billing system automates the movement of data through each step to save time. Because users enter information just once, the data at every step of the process is also accurate, up- to-date, consistent and controlled. In our research 85 percent of companies using dedicated subscription billing software said they are satisfied with their system, compared to 50 percent of those that use spreadsheets. Software that automates subscription billing resolves tensions that can arise between sales and marketing departments on one side and finance and accounting departments on the other. The former want to be able to offer promotions and contract structures that are responsive to customer and market requirements, but finance and accounting departments resist complexity because it creates unsustainable workloads in spreadsheet-based invoicing Sponsored by

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