The majority of firm CFOs today are struggling to increase revenue and spur growth, particularly in the post-COVID environment where curveballs are frequent. The primary obstacles are strengthening operational effectiveness and profitability due to rising competition and new consumer needs that must be addressed in the letter.
What then prevents finance leaders from achieving their objectives? How can their recurrent revenue be increased?
Finance leaders are experiencing growth hurdles
Any CFO will find managing recurring income and enhancing business performance to be a difficult task, and there are simply too many obstacles to overcome. Processing errors, revenue leakage, and income loss have the ideal environment thanks to the presence of numerous siloed legacy systems, excessive reliance on manual labor, and insufficient integration across various business processes.
The pressure to boost profit margins and optimize the bottom line becomes even more acute when the level of competition rises, and the CFO’s responsibilities become more strategic. With CFOs expected to perform much more than just basic bookkeeping, budget planning, and financial reporting, the numerous difficulties along this novel, rocky path make it very challenging to promote growth. What then are these difficulties?
- Real-time visibility into project and financial data, as well as effective performance and profitability measurement
- Assessing the exact ROI accurately while simultaneously keeping expenditures under control
- Restricting financial controls and minimizing revenue leaks
- Removing the flaws in manual, paper-based tracking techniques
- Combining data from several spreadsheets and standalone programs used by consumers and teams scattered across different locations
- Capture expenses, such as employee expenses, purchase orders, and other expense transactions, accurately
The effectiveness of automated billing
In the cloud subscription era, cash management and collection are incredibly crucial and significantly more vital than ever. Since yearly and monthly deals have now taken the role of one-time sales, finance chiefs must scale their operations to remain viable, which is impossible if cash-collecting procedures are manual. Reconciliation is a significant difficulty for service providers and resellers at the same time. Even the smallest miscalculation in comparing provider invoices can have an adverse effect on profitability and result in revenue leakage.
Additionally, as billing and invoicing are tasks that involve interacting with customers, any mistake in the billing procedure may have a negative effect on that interaction. Even though attracting new consumers is important for subscription businesses, it’s equally important to minimize churn. After a while, there is a good likelihood that clients will become profitable. Consequently, friction should be minimized, transparency should be offered, and the greatest customer experience should be provided via billing and invoicing systems. Software or systems that aren’t designed from the ground up to support subscription and recurring revenue models are ineffective at helping people overcome common problems.
On the other hand, billing automation solutions are created especially for subscription businesses. To ensure prompt billing and collections, finance directors aiming to drive hyper-growth must abandon manual billing methods and harness the power of automated billing. With the correct solution in place, managers may improve visibility with an integrated dashboard and reports to effectively handle recurring billing chores. They can also streamline processes and gain greater control over the financial organization.
Five ways that billing automation can prepare finance professionals for hypergrowth are listed below:
Obtain improved visibility
Modern billing automation solutions may give businesses the much-needed information they require for business operations, customer and product profitability, and timely collection of all past-due amounts.
These systems can streamline and automate the recording of all billable and non-billable time and expenditures preventing the potential of revenue falling through the cracks by removing system and departmental obstacles to automatically track time and expenses in the cloud. In addition, leaders may always gain perspective on the “larger picture” and better grasp the financial effects of their revenue decisions.
Control intricate billing terms and cycles
Billing automation technologies can help finance leaders easily handle complicated and individualized billing terms and cycles as modern clients seek more flexible billing options.
Businesses can accommodate various billing procedures, payment periods, and organizational structures by using automation. Additionally, they are better able to handle the abundance of odd billing requests and offer both individual and consolidated invoices without running the danger of payment and invoicing delays.
Minimize errors
Platforms for billing automation help generate timely bills automatically, speeding up the billing cycle and decreasing time to cash. Finance leaders can reduce billing errors and increase efficiency and profitability in the sector by doing away with manual processes.
The total financial situation can be improved while avoiding the need for additional resources by using flexible and automated billing schedules.
Make accurate cash flow projections
Billing automation tools can help with cash flow management by precisely identifying the root causes of revenue leakage. There is a persistent imbalance in cash outflows because vendors, resellers, and service providers offer their products and services at different times.
By providing real-time access to important operational performance indicators, billing automation helps enhance cash flow management. These technologies can provide precise insights into outstanding sales and upcoming project expenses and revenues by enabling leaders to handle unpredictable cash flows more effectively.
Increased output
The main causes of missed sales and expensive productivity bottlenecks are manual procedures and compartmentalized spreadsheets.
By using billing automation, businesses can separate invoicing from revenue recognition based on either delivery milestones or pre-established procedures. These capabilities let businesses track projects more easily, recognize money more quickly, and manage complex billing requirements, all of which increase employee productivity.
Conclusions
It is a Herculean challenge for businesses to develop realistic budgets and successfully gain market share when they consistently lack real-time visibility into their operations. CFOs must be able to foresee future disturbances to guide the business appropriately, as the unpredictable and competitive business world of today demands that businesses be as flexible and adaptable as possible.
As a finance leader, you must empower your sales and revenue team to structure deals innovatively and enable your billing technology to handle such agreements. Your teams can have a bigger impact on business growth by integrating features like pricing indexation, billing in arrears as opposed to advance, customizable monthly, quarterly, or annual periods, interaction with global accounting systems, and payment gateways.
A fantastic method to tackle the problems of project delays, cost overruns, decreased profitability, and lost revenue possibilities is to use a contemporary, enterprise-grade billing automation solution.
In addition to providing real-time visibility into revenue operations, a contemporary billing automation solution may enhance profitability and client happiness, giving you the tools, you need to attract additional clients. Your team may simplify renewal procedures and lessen the workload for the operational, sales, and customer success teams by putting the appropriate solution in place.
Increase the effectiveness of your current revenue sources to get started on the road to hypergrowth right away.
Work 365 is a cloud billing software and subscription management platform for Microsoft Partners, SaaS companies, and software vendors. Work 365 helps to streamline billing and invoicing challenges.
