Plug The Revenue Leaks with the Subscription Billing Platform

Revenue leaks are always concerning for SaaS businesses because it is not the money that does not come into account because of any complexities. It is the money that the company is earning still, it does not end up in the account or the revenue stream. All SaaS companies try their best to plug such revenue leaks so as to maximize their profits.

Thereby, it is important for companies that opt for the subscription revenue model to fix any leaks in the recurring revenue stream.

Also Read: The Leading Causes of Revenue Leakages—Learn How to Mitigate Disruption in Recurring Revenue Streaming

Causes of Revenue Leaks

To nip the evil of subscription revenue leaks in the bud, first, it is important to identify what are the causes of these leaks.

1. Manual Proration Management

Proration is the change of the subscription plan. In the subscription business world, it is common to change subscription plans. However, when the plan changes, the billing also needs to be adjusted. When you try to manage proration on your own, discrepancies are evident. Any discrepancies mean there can be chances of revenue leaks. If you want to avoid revenue leaks, get proration managed through the automated platform.

2. Mistakes in Billing & Invoicing

Another issue that can lead to the leakage of revenue is billing or invoicing mistakes. Most of the time the reason for mistakes in billing and invoicing is also the manual handling of these important business processes. And making such mistakes simply means that you are losing revenue with your own hands. The customer wants to pay and pay on time. Yet, billing mistakes make him contact you and get the mistakes rectified. He will not be able to pay till the mistakes are rectified from the bills.

3. Price Improvisation

SaaS companies need to improvise their product as well as price with time. If you have improvised prices recently and tried to propagate the news manually, then there are chances of revenue leaks. When this process is properly managed, the message is propagated through the newsletters. It is not only a proper way to notify such things but also when it is managed automatedly, things are streamlined, and there are minimal chances that the customer does not receive the news of the price improvisation.

Also Read: How Account Expansion Invigorates Flow of Recurring Revenue

How to Plug the Revenue Leaks?

Now that you know the major causes of revenue leaks, it is time to know the ultimate ways to deal with the issue of revenue leaks.

1. Fix the Involuntary Churn

Involuntary churn means that the customer did want to cancel his subscriptions, but system complexities or any other technical reasons caused the cancellation of the subscriptions. You need to deal with this issue. A customer who leaves does not leave alone rather he takes a source of revenue with him. If you do not want him to take your revenue with him, then find the prime reasons for involuntary churn. The reasons can be varying from card cancellations to mistakes in customer information.

2. Dunning Management

Communication is the best thing that you can do to deal with revenue leaks because of payment failures. Dunning is to communicate with the customers so that they can be convinced to retry to pay the subscription charges. opt for smart dunning management and recover your late or not paid subscription payments.

3. Automated Tax Management

There are so many tax jurisdictions that trying to take them into account manually is not somewhat possible. Any change in tax regulations can become the cause of revenue leaks. However, the solution to revenue leaks caused by the changes in tax regulations is very simple. You just need to have a subscription management system that can manage accounting and tax processes as well.

4. Multiple Payment Gateway Integrations

Another trick for subscription revenue management is to integrate more than one payment gateway with your subscription management platform. Why? Because your customer base is diverse. They want to pay you through multiple payment gateways and payment methods. And multiple payment gateway integrations are an apt way to facilitate the entire customer base. Not only the revenue stream will be smooth but your feasibility to enter new international markets will also improve.

5. Customer Segmentation

Segmentation of the customer base is also important when it comes to the fixation of revenue leaks. When customers are segmented, you will know how much importance you need to give to which customers. The customers from where the revenue is leaking, their entire journey will be in front of you. It will be easier to make the decision regarding these customers.

Also Read: You Need A Recurring Revenue Stream to Draw Success in 2021 And Onwards

If you are also worried because of the revenue leaks, then schedule a demo with SubscriptionFlow. We can help you with SaaS revenue recognition and management.