The influx of accounting and subscription billing software may feel overwhelming. Which one is best for your company? And how can you be sure you’re choosing the right tools to manage recurring billing? Generally, it’s best to equip your team with software capable of handling the accounting side of things and the automation of subscription billing. Many of the solutions do one or the other; leading to gaps in the performance of what can often be expensive software.
Unfortunately, these gaps can result in a lack of transparency and an inability to prove compliance. Using disparate systems increases the likelihood of error and may result in an administrative nightmare for those parsing multiple systems for accurate information. It also introduces the risk of bottlenecks in your team’s workflow as they try to line up the data between systems.
In this blog, we will break down the differences between accounting and subscription billing software. But more importantly, we’re going to outline why software that combines both sets of tools is essential if you plan to scale your subscription billing.
What can accounting software handle for recurring billing?
Good accounting software is one of the cornerstones of most businesses. It becomes even more important when you introduce the complexity of recurring billing models. The average accounting software package cannot handle the complexities of recurring billing. You may find yourself struggling to create workflows around the limitations of your current system. Below, we break down what accounting software can and cannot do for your company.
Accounting software will enable you to:
- Handle general ledger management
- Manage accounts receivable and accounts payable
- Perform revenue recognition and deferrals where appropriate
- Access robust accounting functions
Some limitations include:
- Limited revenue structures, quoting, and invoicing
- Can’t handle advanced billing structures and pricing strategies
- Doesn’t automate deferred revenue for recurring billing
What can subscription management software handle for recurring billing?
Subscription management software covers the limitations inherent to accounting software for recurring billing. It will usually automate invoicing and billing procedures—the big issue is that it’s often a separate system and cannot perform accounting functions. As a result, companies end up working with multiple systems to enable compliance and automate their billing. Below, we take a look at what subscription management tools offer your company.
Subscription management software enables you to:
- Automate advanced pricing and billing structures
- Implement better overall contract management
- Facilitate easier management of terminations and renewals
- Access accurate forecasts and reports for recurring billing
- Improve and automate invoicing
Some limitations include:
- Introduces issues with trackability
- Limits work and data flows as it is often a siloed system
- Cannot handle accounting
- Doesn’t enable compliance or revenue recognition
Do I need a separate system for subscription billing accounting and recurring billing?
The answer is no. Having multiple systems only increases the complexity involved in handling recurring billing models. It’s possible to get software capable of performing both the accounting and recurring billing functions while allowing you to work within your current software.
Combine the power of both accounting and recurring billing software
Subscription Billing Suite integrates with Microsoft Dynamics and solves the complexity of recurring billing from invoicing to revenue recognition. Here are just some of the tools it offers:
- Handles general ledger management
- Manages accounts receivable and accounts payable
- Performs revenue recognition and deferrals where appropriate
- Enables robust accounting functions
- Automates advanced pricing and billing structures
- Implements better overall contract management
- Supports best practices in data management
- Facilitates easier management of terminations and renewals
- Allows for accurate forecasts and reports for recurring billing
- Improves and automates invoicing
- Centralized, real-time reports, and robust revenue recognition
As you can see, it’s a comprehensive solution that offers the functionality of both subscription billing automation and accounting software.
If you want to learn more about subscription billing management, we recommend reading:
- A comprehensive guide to SaaS pricing models (with examples)
- Understanding revenue recognition for subscription billing