What is SaaS Consolidated Billing?

Software as a Service (SaaS) consolidated billing allows you to combine all the subscriptions, transactions, or usage charges related to a customer’s account into one single invoice. Instead of sending separate invoices for each product or department, the customer gets an overview of all the activities in one single statement.

For SaaS companies, this simplifies the billing process and makes it easier for customers to keep track of expenses. For customers who use many tools or have multiple accounts, this gives a clear financial overview and reduces the risk of missing a payment. 

Consolidated billing has advantages for both the SaaS company and the customers. 

Financial reporting means looking at the revenue gained by the SaaS company and consolidated billing, through its unified structure, helps achieve this. Not only that, but by providing consistency, consolidated billing ensures compliance with the ASC 606 regulation.

SaaS companies with complicated billing structures are the right audiences.

Examples of these targets include:

• Businesses serving large enterprise clients

• Platforms with bundles, add-ons, or usage-based pricing

• SaaS companies with multiple products under one umbrella

• Global businesses operating across currencies and regions

In these situations, consolidated billing helps with removing fragmented invoicing, which in most cases leads to financial confusion.

Consolidating billing implementation can have certain hurdles, which include: 

• Aligning billing cycles 
• Managing dynamic pricing
• Integration with legacy  systems 

It is important to point out that if poorly handled, consolidated billing can ultimately lead to less granular visibility. Additionally, working with a single billing system can lead to operational dependency, and that puts pressure on maintaining reliability.

Implementing consolidated billing includes several steps: 

1. Begin by conducting a billing audit, which means mapping your pricing and customer structures, and payment flows. 
2. Select a billing platform that can handle multi-subscription accounts, reporting, and flexible invoicing. 
3. Keep your customers informed and detail what they are paying for.
4. Consider automating different processes like payment collection, gestão tributária, and reconciliation. 

Consolidated billing, which produces a single, unified invoice, leads to faster payments and fewer disputas de pagamento. Predictable billing cycles and simplified payment processes are an integral part of the customer experience. 

For SaaS companies, consolidated billing removes payment confusion, simplifies upsells, and bundled packages.