9 questions to re-evaluate your current Enterprise Billing System

Introduction

While the functions of a billing system seem like a simple "invoice and get paid" role, it's far more versatile and complex than that. Enterprise billing systems are levers of strategic competence that dictate the business's growth trajectory, revenue strategy, and expansion plans.

Shortcomings of billing systems and their incompetence could start from trivial invoicing errors and payment delays, trickling down to revenue leakages and lost market opportunities worth millions. Avoiding these dire consequences is imperative for enterprises looking to optimize revenue operations, and this article is a framework to put enterprise billing systems under a microscope and evaluate their roadblocks and bottlenecks. 

Billing system re-evaluation

Adopting a new enterprise billing system shouldn't be a decision made in haste. Every organization comes with its own growth trajectories and complexities. What's essential is that businesses thoroughly assess their billing environment to identify limitations and potential risks. This can help them understand if the billing system is ready for sustained growth or if it's time to realign billing strategies to meet evolving demands.

1. Has the current billing stack ever hindered our expansion to new markets?

As enterprises grow and expand to new geographies, billing systems are expected to not only support growth but accelerate it. Each new market brings new challenges for businesses—new tax rules, e-invoicing obligations, regional compliance, and support for local languages and currencies.

When billing systems are reactive to market demands, they become bottlenecks leading to weakened go-to-market strategies, delayed product launches, and teams working with limitations of outdated infrastructure. This keeps enterprises always chasing and never leading.
In contrast, agile billing systems are proactive and anticipate change. It enables seamless market entry and expansion without operational friction.

2. If we venture into new revenue models like subscription, usage, or hybrid billing, will the software adapt?

Modern enterprises are no longer confined to a single product line or revenue stream. Goods that were previously sold as one-time purchases were then sold as monthly subscription boxes. Eventually, the subscription industry fatigued. Today, enterprises are deploying the "Pay As You Go" model that gives customers the flexibility to pay based on actual usage. 

When enterprises make such strategic decisions to branch out their monetization approaches, billing systems need to keep pace. Relying on manual workarounds due to rigid systems isn't a viable solution. Modern billing systems need to natively support diverse pricing strategies, empowering enterprises to experiment, launch, and scale new revenue models without complications.

3. Do we have extensive flexibility with the quote-to-cash process?

The quote-to-cash process (Q2C) is the revenue engine of every enterprise, spanning from sending well-crafted quotes that clearly define deliverables to billing and acquiring payments from customers. Q2C workflows also need to be able to support a diverse product catalog, allow invoice customizations, and offer flexibility through advance and partial payments.

Beyond the standard quote-to-cash process, billing systems should incorporate automation capabilities that allow businesses to configure multi-level approval policies, ensuring compliance with internal controls. This structured screening helps streamline the reviewing and approving processes for invoices, allowing sales managers to validate invoices before they are delivered to customers with better accuracy.

4. Is our billing system capable of doubling as an accounts receivable management (ARM) solution?

Billing tools that just create and dispatch invoices are a lost opportunity; they should be capable of so much more. Modern billing systems empower the receivables department with collection and automation-related capabilities. 

While there's a dedicated receivables team that prioritizes manually calling up customers on overdue payments, billing systems can reinforce and accelerate the collection process with late fee management, smart payment reminders, and aging reports. With billing and ARM functions working hand in hand, enterprises enjoy predictable cash inflow, less revenue leakage, and financial stability. 

5. Does our platform put the customer experience in the forefront or does it function at the bare minimum as a back-office automation tool?

Most enterprise billing systems are built to automate the billing cycle end-to-end, enabling sales reps and FinOps teams to manage back-office functions smoothly. However, these systems fall short when functioning as a strategic customer touchpoint mechanism that improves experiences and fosters better relationships. 

Are customers able to approve quotes easily? Can they make payments with their preferred payment methods? Do they have access to past statements? Is communication regarding successful payments and upcoming renewals going out on time? Can the customer reach out to support if they need assistance? If the answer is no, the billing system is more optimized for internal efficiency instead of customer centricity.

6. Can our system provide transparency to key stakeholders while maintaining restrictions within teams?

A critical responsibility of an enterprise billing system is contextual access to master data and functions. A one-size-fits-all interface might work for smaller organizations, but as the business grows, it becomes a liability. Billing systems are tasked with ensuring the right data is with the right people, restricting access from members and teams that don't need it. 

For example, sales representatives need access to customer profiles to create transactions for them. Marketing teams require insights into discounting campaigns and market trends. Finance teams must oversee due payments and compliance. Senior leadership needs visibility on forecasted revenue, sales, and MRR. Billing systems that lack granular-level role management could face operational and privacy-level inefficiencies—detrimental to enterprise growth.

7. How reliable is the billing infrastructure in terms of compliance, privacy, security, scalability, and up-time?

Functionalities aside, it is important to assess a billing system's ability to meet and exceed expectations in protecting sensitive customer and financial data. Industry standards and compliances like e-invoicing, GDPR, PCI, SOC 2, and ISO 27001 are a prerequisite in the enterprise landscape. It's also essential to brace for audits and have incident response protocols for data breaches pre-emptively.

Billing infrastructure should also be built to scale with increasing transaction amounts and volumes without performance degradation. Disruptions due to server failures and poor uptime rates can lead to dents in growth strategies, loss of customer trust, and financial losses.

8. Are there built-in revenue recognition capabilities to help comply with ASC 606 and IFRS 15?

Manually recognizing revenue for enterprises with high transaction volumes is not just inefficient, it's error-prone, which can lead to accounting complications. Adherence to regulations like ASC 606 and IFRS 15 requires tracking revenue and obligations on a granular level, matching, and recognizing only upon fulfillment.

When a well-structured revenue recognition framework comes built into the billing system, enterprises gain more control over how and when revenue is recognized, protecting the company and investors from inaccurate financial reports.

9. Does our system seamlessly work with our tech stack and offer extensibility when needed?

Enterprises have their tech stack that's worked for years; billing systems need to sit on top of that and not completely alter the course. In other words, billing systems should facilitate a seamless transfer of data with existing ERP, CRM, and accounting systems through interoperability. All systems need to function as one unit instead of in silos.

Finally, a non-negotiable aspect for billing systems is extensibility. When looking to go beyond the capabilities of the existing platform through low-code, native integrations, or APIs, there should be little to no friction. With the help of custom functions, rule-based automation, and webhooks, billing systems can always adapt to future needs.

Conclusion

In today's dynamic landscape with emerging customer needs, an outdated enterprise billing system will erode into your billing operations' efficiency. To stay ahead of the curve, it is critical to evaluate your current billing system through the right lens to identify gaps and build resilience. With platforms like Zoho Billing Enterprise, businesses can brace for market shifts and ambitious innovations without friction.