It’s all about the subscription model. From monthly clothing deliveries and television-streaming services to complex B2B software contracts, the subscription model has taken over the world as businesses and consumers alike can get anything they need as a service.
If two decades ago someone told you that you could subscribe to socks or cosmetics delivered monthly in 2019, you might have been a little skeptical. If they said you’d be able to subscribe to a service that ports videos to a screen you can fit in your pocket, or that the same subscription model would be the main way business applications are purchased and used, you’d likely be more than skeptical. Then again, two decades ago, the world was afraid that every computer would fail on January 1, 2000.
Yet this is the world we live in — the subscription model is here to stay, and for many technology vendors today, these subscription revenues are the lifeblood of the company.
The Many Challenges of Running a Subscription Business
However, rarely is it as simple as “if you ‘as-a-service’ it, they will come.” Everything about the quote-to-cash and subscription management processes needs to be controlled, measured and tracked throughout the customer’s relationship with your business if you hope to succeed.
Pricing needs to align with your business goals while remaining competitive. Customer acquisition needs to be streamlined — especially in the B2B subscription model. The process of billing your customers needs to be accurate, intuitive and timely; collecting should be just as easy.
Add to this the importance of nurturing relationships with your customers, accounting for revenue and continually tailoring and re-tailoring your business model to align with customers’ needs, and you almost forget that you have a product to deliver.
Quote-to-Cash: The B2B Differentiator and the Top Challenge
While the subscription model is rooted in the consumerization of services and many of the relationship-building tactics are similar, there is one critical difference between a B2B and B2C subscription: the quote-to-cash process.
What Makes B2B Different
While tech companies delivering for consumers can list a few price points, take down a credit card and start billing, business purchasers still expect the customization, volume discounts, add-on services and personal touch that makes a product work for them.
This is what makes the quote-to-cash process an imperative for today’s business and why it’s so important to deliver a streamlined quote-to-cash process that makes life easy for salespeople, accountants and most importantly — your clients.
The Power of Integration
Especially under the new ASC 606 revenue recognition standards, the quote-to-cash process is a challenge for businesses. Not only does your sales team need to be able to build quotes easily for customers, but once the contract is signed, it needs to be seamlessly transferred to accounting to send the invoice, collect the payment and recognize the revenue when performance obligations are satisfied. All this must be done without errors — every time your company closes a deal.
The best solutions connect critical business systems within your organization — creating a quote-to-cash process that streamlines workflows, boosts efficiency and productivity and minimizes duplicate data entry and the opportunity for errors. CRM, subscription management, project management, payables, purchasing and financial reporting are a few of the major areas that benefit from tight integration with each other. Many solutions bring in best-of-breed options to bridge gaps or enhance native functionality.
In a recent infographic from Sage Intacct, the firm explored the challenges and opportunities that exist in the quote-to-cash process for SaaS Organizations and explained why integration is critical for success.
Maintaining the Relationship and Managing Subscriptions
Once your team has closed the deal, the client has signed the contract and everything is in line, now what? Now it’s time to deliver. From setup and throughout the revenue lifecycle, you need to keep the money flowing and keep the client happy. Throughout the lifecycle, the subscription will likely change. Upgrades, downgrades, renewals, returns and more, again calling to attention the importance of integration.
Added to this, you need to make money, identify problem areas before they create problems for your company and continually improve your service if you hope to add new customers and keep the ones you have.
The Metrics That Matter
Dynamic SaaS businesses require of-the-moment metrics to support fast decision making. Churn, customer lifetime value, acquisition cost and more — these numbers need to be ready at a moment’s notice. You can’t afford to wait for someone to generate a report in error-prone and time-draining spreadsheets.
For technology firms, finance professionals need metrics that go beyond generally accepted accounting principles (GAAP) to make smarter managerial and operational decisions. These operational metrics, when paired with GAAP, give you the power to work smarter and faster. With Sage Intacct, you can focus on these operational metrics with an easy, accessible SaaS Digital Board Book. The SaaS Digital Board Book pulls the information you need from a variety of sources to provide you a clear picture of where you stand at that exact moment.
The Path to Tech Company Growth With Sage Intacct and Wipfli
At Wipfli, we understand the challenges that firms like yours face in getting the right information, managing the complexities that come from the quote-to-cash and subscription management processes and the importance of rapid, well-informed decision-making.
We work with tech companies across the nation to customize, implement and integrate Sage Intacct, helping our clients act faster and do more. We invite you to learn more about Sage Intacct’s role in simplifying the quote-to-cash process here, watch the on-demand webinar on connecting finance and sales at technology companies and contact us for a free consultation.