SaaS Subscription & Payment Management Guide

Looking for the best way to manage your software subscriptions? You’ve come to the right place.

SaaS (Software as a service) subscription models have gained popularity in recent years. With this rapid-fire increase in usage, it’s no surprise that many individuals need help reorienting their finances to additional monthly expenses.

I’ve been working directly in tech and business as these services have skyrocketed, and I have the experience to back up my sense of how to manage your subscriptions best.

Whether you’re self-employed or here on behalf of your company, this guide will offer you everything you need to know about managing SaaS subscriptions so you can stay well afloat financially.

What are SaaS Subscriptions?

SaaS subscriptions are agreements between users and software service providers wherein users make ongoing payments in exchange for a service. Most software providers offer their services on a subscription model.

Subscription intervals are usually monthly or annually, with a prepaid option (pay before using the service) or a postpaid option (pay at the end of the usage interval).

Subscription-based payments have become highly popular because they allow users to test out the software and decide whether to continue with it. A one-time payment tends to mean the customer is stuck with the service they bought — this can be a massive loss if you aren’t happy with the product.

However, with SaaS, you can simply opt out of the subscription for the next month if you don’t want to maintain the service. This subscription model makes for total convenience and flexibility — hence their tremendous boom in popularity.

What is a SaaS Payment System?

A SaaS payment system is the collection of systems and processes the service provider uses to accept subscription payments. These payment systems typically include:

• A layout to define pricing
• Subscription plans
• Billing cycles
• Payment methods

A SaaS payment system also allows customers to easily manage their subscriptions by providing options for plan upgrades/downgrades, cancellations, and refunds. All of these features are usually accessible through a user dashboard or cPanel.

The SaaS payment system is an all-in-one center for streamlining the process of billing and payments. It makes it easier to keep all subscription-related details in order.

How Do SaaS Companies Collect Payments?

SaaS companies collect payments through a built-in payment gateway or an integrated third-party payment processor. These payment processors offer different services, such as:

– Credit/debit card processing

– Online banking transfers

– ACH transfers (Automated Clearing House)

– PayPal and Stripe

The SaaS company can choose which of these methods they’d like to accept and then make it, or a slew of options, available to their customers.

What are Recurring Payments?

Recurring payments are another term for subscription-based payments. They refer to automatically collecting payments from customers regularly — often monthly or annually. This payment system is prevalent in SaaS companies because it removes the need to invoice every customer and manually collect payments.

On the customer side, recurring payments can be a convenience or a disaster — it all depends on how you manage your finances. If you don’t keep track of your subscriptions, you’ll find yourself unprepared to be charged for all of them at the month’s end (or beginning).

This potential mismanagement is why SaaS payments management software is an excellent choice for many businesses with many subscriptions. But what does subscription management software actually do?

What is SaaS Subscription Management?

SaaS subscription management software allows you to monitor, review, and track every aspect of your SaaS payments.

Many companies might have several SaaS subscriptions operating throughout the business at one time. These are third-party software providers who can perform a number of tasks in your business. This can include things such as Mailchimp or Dropbox, for example.

These subscriptions require constant monitoring and adjusting since multiple SaaS transactions could occur each month in different areas of your company.

With SaaS payment management software, you can accurately track every payment and ensure they’re processed and validated much more efficiently. You’ll also receive a range of crucial data on each payment when it’s executed.

This can include things such as – the amount spent on the subscription, when the payment was made, what type of SaaS subscription was purchased, which corporate card was used – and much more.

This software is the ultimate tool for managing your SaaS payments as effectively as possible. You’ll have complete visibility of your expenses, access to data on each charge, and automatic receipts for any transaction.

Furthermore, SaaS payment management software will store this data in one place, making it easy to access. The best part of payment management software, in my opinion, is that you can structure how the information is displayed to have an accessible and clear picture of your business finances.

Online Subscription Management Vs. Recurring Billing

At first glance, it may seem that these two concepts are interchangeable. However, they’re actually quite different and have distinct features.

Recurring billing is a method of collecting customer payments at regular intervals – typically monthly or annually. This method doesn’t include customer registration; the customer provides their financial info once, and then the company handles all future payments automatically.

On the other hand, online subscription management software allows for more user control over payment processing. It operates through a web portal where users can sign up for various services and pay for them continuously. Furthermore, customers can access a dashboard that provides detailed payment information.

Benefits of SaaS Subscription Management

If you still need convincing of the value of a SaaS subscription management service, here are some additional benefits they offer.

Full Visibility of Your Payments

With subscription management software, you’ll have the ability to monitor all your SaaS payments easily. You will be given extensive details with each transaction and automatic receipts uploads.

The central dashboard/information center available on most subscription management software will help you avoid tedious manual recording while having a crystal clear vision of your company’s expenses.

Like I said earlier, being able to structure your data and visualize it in a way that makes sense for your company’s purposes can offer a sense of financial security that’s harder to achieve when manually tracking spending.

Advanced Spend Control Features

SaaS payment management can also give you access to various advanced spend control features. These features ensure maximum control and understanding of all your payments and how they’re executed.

For example, a spending limit is one of the many controls you can implement. A spending limit is the maximum amount you want to spend on SaaS transactions. With a set spend limit, your SaaS management software won’t complete transactions that cross this threshold.

Features like spending limits help you keep every area of your company within a budget, hence creating a more cost-efficient way of using SaaS subscriptions.

Meaningful Spend Insights

Another significant benefit of subscription management software is that you can receive meaningful insights into the effects of your money spent. In other words, subscription management software functions to save you as much money as possible — therefore, if any is going to waste, it’s programmed to let you know.

One of the many insights you can receive is a notification for duplicate transactions. Another example would be an alert if you’re paying for two types of software that complete the same or similar software functions for two different areas of the company.

For instance, two separate teams could be paying for the same subscription or two that perform the same service. Subscription management software would pick this up immediately.

These insights can help prevent unnecessary transactions and help you refine your corporate spending more accurately – thus resulting in a more beneficial return on investment.

Types of SaaS Subscription Management Software

If you’re still reading, chances are you’re interested in acquiring SaaS subscription management software. Before you do, you should know the major types of this software that you can invest in:

Out of the Box

“Out of the box” SaaS subscription management software offers pre-created templates that you can use to build the perfect payment solution for your business. These services are designed to be intuitive and easy to set up. Still, they should also provide enough customization options to fit your exact goals.

Custom Built Solution

Custom-built solutions are probably the way to go if you want something more tailored to specific needs. With a custom solution, you can create a system that reflects what you need while avoiding superfluous functions or expensive extras that don’t add value.

API Only Solutions

API-only solutions are most optimal for those looking for high-level scalability and customizability. With an API-only solution, you can add the features you need and integrate with other services to create a truly unique payment experience.

These solutions require a lot of technical knowledge, so they’re usually best left in the hands of developers.

Conclusion

No matter what type of subscription management software you choose, they’ll come in handy if you’re a SaaS enthusiast. Access to reliable SaaS payment management and meaningful insights will be well worth your investment — it can even save you money in the long run.

Investing in this payment technology will ensure your business’s finances stay on track while providing maximum control and visibility over all your transactions.

I hope this article answers all your questions regarding payment management for subscriptions. If you have any questions or think I missed anything, please comment!