When you are working towards knowing what a subscription billing system is, there are a few things you have to know about. It is an internal billing system where you are creating a product within your product. Though the initial setup may be easy, you need to understand to scale the customer base.

But, what is subscription billing?

Subscription billing is the process of billing the customers for their subscription on a regular and recurring basis. A lot of things go hand in hand when your subscription billing is involved. For starters, you need to know who needs to be billed, what kind of subscriptions are being billed, how much they should be billed and how to collect payments from them. Apart from this, they need to tell how subscription data needs to be reported for accounting

Recurring billing is the process where you bill your subscribers a specific amount and you have to do it on a recurring basis. It is opposite to one-time billing and it can range anything from magazine subscriptions to CRM solutions.

Building a Subscription Billing System

In addition to this, SaaS software solutions can also have subscription billing model. The monthly pricing model can be tiered, volume-based or metered. The billing can be done weekly or monthly. It automatically sends invoices and handles the collections too.

The subscription billing system goes parallelly with the subscription management where the subscribers have managed and the preferences. Not only that, this subscription management can manage a lot of things like the product catalog, the prices, and the data of the subscribers

Even the SaaS software, they include the managing of the trials, the trials turning to the paid upgrades, cancellations, downgrading, etc.

How to build an able subscription billing system?

When you are building a subscription billing system into play, you need to visualize and create. For example, think of a bridge. Just like how you estimate all the necessary items such as the material, manpower, time, etc, the enterprise software is also the same.

You will take the degree of customization into account and also estimate the costs that are involved in the development of the product. You can integrate with third party software or also find out the speed of the software implementation.  Either way, there is a lot of planning required.

Here are a few things to keep in mind while building a subscription billing system:

  • Recurring billing

This may be a simple process but it is very systematic. It collects the payments, sends the invoices, records the transactions. This is also known as a basic solution which may work for you in the beginning but in the long run, when you want other features, this basic system cannot accommodate all the complexities. Hence you need other things.

  • Subscription Management

This means that someone is managing your subscriptions under different categories. They are assigning the payment methods, automation of the payment collection process, the add ons inclusions and the subscriptions editing. A customer portal needs to be created where they can manage their subscriptions and they can set the options of how they want to go about.

This subscription management can help in not delaying any time and the manual intervention that is needed can provide a better customer experience.

  • Managing of the user

The User role management is quite important where you assign your team members the roles that supervise over the billing or reporting work. You need to customize the role of a team member where they can be flexible and ensure the security of sensitive information.

  • Methods of Payment

The payment methods option is another significant thing to keep in mind. You need to give them multiple options to pay so that they can pay through their debit card, wallets, credit cards, etc. Support for multiple payment methods should be provided. Usually, when the servers are down, the customer needs the flexibility to choose to pay in different methods. This way, you will not lose a customer who is willing to pay though they encounter any problems. Make sure that the balance in the books matches the balance in the payment gateway and the bank statement. This is known as payment reconciliation.

  • Dunning

Dunning is the process of communicating with the customers to expedite the payments. You can have the flexibility of sending them text messages, emails, etc. But to respond to payment failures and recovering more revenue, you need to do more than just basic dunning, i.e., retrying the card a few times during the declined payment. There is a necessary time gap while sending those emails and the frequency too.


Hence, while building a subscription billing system, you should keep these in mind. You can think of the third-party integrations too where it eases the pressure of the working team. Apart from that, keep building new features to upgrade and build a customer base.

By thalla

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