What is SaaS Payment Automation?

SaaS payment automation refers to the utilization of  software systems to automate billing and payment collection for subscription based business. 

Through payment automation, SaaS businesses avoid manual processes, as the system automatically collects recurring payments. 

Payment automation supports: 

• Підписки
• поновлення 
• оновлення 
• usage-based transactions 
• payment data storage 
• payment method handling

SaaS payment automation involves the following steps: 

1. The customer selects a plan and adds their payment data. Once that happens, their information is stored in a subscription and CRM system. 
2. Through a payment gateway, the details and transaction are verified, then approved. 
3. The billing system records the payment entirely, meaning the price, billing frequency, taxes, and any discounts and trials applied. 
4. For the following payments, the billing system will use the same payment info for each transaction, without any manual intervention required. 
5. Additionally, the system will generate invoices, send receipts, and keep accounting records updated. 
6. In case the payment fails, an automated retry logic is applied, and dunning emails are sent for the customer to update their details.

Transactions are matched with payouts and financial reports for accurate revenue tracking.

A robust platform typically provides:

• Recurring and usage-based billing

• Automated invoicing and tax calculation

• Subscription lifecycle management (upgrades, downgrades, cancellations)

• Smart retry and dunning workflows

• Multi-currency and global payment support

• Real-time reporting and reconciliation

• Integrations with CRMs and accounting tools

• Strong security and PCI compliance

Revenue recognition is also a feature that can be offered by advanced systems, especially for enterprise clients.

In the absence of a SaaS automation platform, SaaS businesses can be faced with different challenges that include: 

• missed payments 
• expired payment card 
• errors due to manual invoicing 
• complicated billing methods. 

A hybrid pricing approach can add an additional layer of complexity.

Many SaaS product cancellations are accidental. One of the reasons for this is that payments are not successful. Retrying the charge, using a card updater, or contacting the customer in time can recover part of that lost revenue. 

SaaS payment automation helps in ensuring uninterrupted service, which is highly appreciated by the customer. Correct invoices, predictable revenue, and self-service payment updates help in building trust and encourage usage.

Better billing experiences also create natural opportunities for upgrades and add-ons, increasing життєву цінність.

Що таке Merchant of Record is in charge of обробкою платежів, tax calculation, invoice creation, and compliance with regulations. This allows a SaaS company to focus on its core business of developing software as opposed to managing tax laws, cross-border payment methods, and local compliance practices. 

Combined with automation, this setup allows for a continuous flow of періодичній оплаті with very little effort. This is why the SaaS company focuses on the product and growth, and the Merchant of Record takes care of payments, compliance, and risk.