Out of five people, at least one will go down the path of saying, “There are plenty of billing solutions on the market,” or “This is a solved problem.” I thought I’d try to answer that in my first blog post.
Let’s talk about enterprise billing in general and why it’s a difficult problem to solve.
Young companies usually start off by integrating with a billing provider (e.g., Stripe, Chargebee, Recurly) and calling it good. These billing solutions are indeed adequate: they solve the obvious problem and allow the business to move forward developing their product.
But here are a few stats I’ve gathered that speak to my next point:
- 48% of companies rely on manual billing
- The typical employee count for companies using these turn-key solutions is around 100
These data points suggest there’s a whole segment of the market that simply hasn’t been addressed and that as companies grow – the billing solutions do not grow with them. The problem is simply not solved for larger enterprises and for the companies that sell to them.
From my own experience working at late-stage companies, the billing solutions they started with, like Recurly and Stripe, quickly fell out of favor when selling to enterprise customers. Enterprise customers tend to take all the air out of the room for smaller SaaS companies. For the companies I’ve spoken with about this problem, the quick fix is to throw bodies at it (or just one body, in many cases). This works for one, maybe two customers. By the time your business is selling to this kind of customer, you probably have a body to spare. And if you don’t, there are plenty of agencies ready to fill the void with an accounting clerk in need of billable hours.
Scale
One can guess why this won’t scale, but I’ll spell it out:
- Enterprise customers demand bespoke solutions, bespoke contracts, and bespoke billing agreements
- Enterprise contracts tend to be fluid, constantly changing with addendums whenever the customer is sold something new or ups their requirements
- Humans are expensive and mistake-prone. While we tolerate human error, each mistake with an enterprise customer erodes trust. One mistake is okay. A second might inspire a terse response. The third is when the eye-rolls start—and they don’t stop after that.
Once you have more than one or two enterprise customers, you’ll feel the pain. The pain of saying to yourself:
“Great, now I have four clerks. I really should hire a controller to help manage this. There goes $300k a year, not to mention I have to find one.”
BillAgent
The service we’ve developed is just as turn-key as the traditional players. Integrating our product with yours is straightforward. We’re event-driven in every aspect.
We’re building standard integrations between our product and ERPs, wholesale integrations with Payment Service Providers, and other money movers. We don’t deal with the relational aspects of customer data or SKU management. Our AI extracts all the configuration data our product needs directly from the contract.
With BillAgent, the contract itself becomes the central managing object for every customer relationship. It is the living configuration that drives every thing in the system. The results are
- Real time revenue recognition in accordance with ASC-606 revenue recognition rules.
- Auditable data that can be traced back to every contract or addendum
- Real time access to in contextual information for every customer relationship.
- AI enhanced superhuman accounting staff – one can do the work of ten
Our AI service also integrates deeply into accounting workflows, giving the one accountant you hire superpowers when it comes to reconciliation between revenue and cash, cash flow, and revenue forecasting.
I am going to talk more in coming blogs post about how our product can help you and your organization. I’ll also throw in some thoughts about AI and how it’s changing the way we do business with each other.
Look out for other blog posts written by my team as well, we’ll be covering accounting topics and AI technology. I’m confident you’ll find them insightful, and I hope you reach out to us.
Thanks
William O’Hara
CEO of BillAgent.ai
