Using AI Native Billing Platform to Manage Subscriptions

Billing management is the lifeblood of subscription businesses, as their success hinges upon successful recurring payments. However, inefficient payment flows have made the process messy, error-prone, and overly reliant on manual surveillance. With manual operations, invoices, renewals and retries, etc. are often all over the place.

But AI native billing platform is here to do away with these shortcomings. It redefines subscription management by not only automating tasks, but also enhancing them through machine learning and predictive analytics. The platform detects and corrects billing mistakes, optimizes payment recovery, forecasts churn, and executes much more, letting businesses truly future-proof their payments.

What is an AI Native Billing Platform?

An AI native billing platform is a software that dynamically adapts billing flows to the latest conditions, so that they stay optimized in real-time. It also automates all the major tasks so that manual oversight is minimized. It intelligently learns from payment histories and past trends, customer behaviors, and shifts in the market to improve billing.

Thus, the software is not confined to automation alone. It goes several steps further, and actually turns billing into a dynamic entity, ever-refining itself. When billing keeps on self-adapting without waiting for manual commands, that’s when operations truly become future-proof.

By future-proof we mean that operations become sustainable, and capable of overcoming new challenges. This includes adopting new payment methods effortlessly, expanding globally, implementing dynamic pricing models, and handling regulatory shifts.

AI Native Billing vs AI Powered Billing

AI native and AI powered billing may seem similar, but they differ at their core. While AI native billing software holds AI as its core, AI powered billing software supports AI as a layer on the top. The latter is a conventional billing system that offers AI capabilities as an additional feature to enhance its already existing billing features.

Moreover, AI native billing software runs all billing workflows through AI. Meaning, the entire billing logic and decision-making process is AI-driven. On the other hand, AI powered billing only supports some special features that are AI-driven, such as revenue forecasting. The rest of the functions still follow only rule-based automation.

Furthermore, continuous learning from past events and detection of trends is a classic feature of AI native billing. It utilizes its accumulated knowledge to make close-to-reality predictions of the future trends, and then modifies billing according to that. For example, its capability to price dynamically.

Let’s suppose there’s a customer using a cloud-storage service. This customer continuously exceeds the usage limit allowed by their plan for three months. Suppose their plan was 20 GB, and they consistently exceeded by 10 GB every month. The billing system catches on to this trend, and makes it a profitable opportunity.

It automatically formulates a suitable offer for this customer, giving them 35 GBs of storage space per month. It ties this offer to an optimal price that matches usage. The customer is also offered a courteous time-sensitive discount that would facilitate them to upgrade more conveniently.

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If the customer chooses to make this upgrade, the billing system will auto-generate their invoice, apply proration if needed, and update entitlements itself. So AI native software powers smart workflows like these that are not dependent on manual triggers, but in fact maximize productivity.

On the contrary, AI powered billing offers AI like an add-on. Its core functions are still driven by rule-based automation, and only some highlight features, like payment routing, are completely AI-driven.

Why Subscription Management Needs AI Native Billing

AI native billing resolves these subscription management pain-points:

Complex revenue models

Subscription businesses are moving beyond the traditional fixed price plans. They are now increasingly incorporating advanced revenue models like pay-as-you-go and hybrid billing. Simple rule-based automation in these models can lead to errors such as usage calculation mistakes.

But an AI native software takes care of every billing model efficiently. It handles multiple entitlements tied to the same customer account, measures data usage precisely, aggregates charges accurately, and combines pricing models in hybrid billing gracefully.

Payment failures

Traditional systems support payment retries but those are fixed in nature. For instance, 3 retries every 7 days, 1 retry per day, etc. Businesses can enable the retry schedule of their choice, but they can’t possibly develop unique retry intervals for each customer.

However, AI native platforms make that possible. They adapt retry attempts to each customer’s payment activity so that the retry strategy is different and more personalized for each. This helps collect each customer’s failed payments a lot faster.

Cash flow prediction

Cash flow predictions are important because without them companies have to rely on guesswork for financial management. Conventional billing software only shows the past revenue patterns, and the revenue accumulated in real-time.

It is AI native billing that projects future revenue as well. It learns from historical patterns and latest changes to forecast recurring revenue, customer lifetime value, and so on.

Personalized billing for each customer

Today’s customers expect personalization. By modifying billing flows for each customer, AI billing software gives customers what they need. For example, it doesn’t dispatch static, monotonous payment reminders to all customers. Instead, it learns from how each customer actually responds to the reminders, and then changes its strategy accordingly.

Slow responders are sent reminders earlier than others, those who are unresponsive to emails are sent notifications by SMS, etc. These customer centric adjustments elevate the customer experience, and improve retention.

Compliance headache

AI native billing reduces audit stress by automating the tasks that are difficult to accomplish manually. For example, categorizing revenue according to the ASC 606/IFRS 15 rules. When new cash flows in, the system identifies whether it is earned revenue or deferred, and sorts it under the right category itself.

It also transfers revenue data into your integrated accounting platform itself. So that duplicate data entry is not needed, and there is no room for human error and regulatory risk.

SubscriptionFlow Brings AI Billing Within Reach

SubscriptionFlow is an AI native billing engine that propels growth through intelligent, AI-driven workflows like:

Smart invoicing

Your invoicing becomes error-free, as mistakes are detected and corrected by AI timely. Even if the billing system is producing thousands of invoices at the same time, they are all scanned for accuracy, and only the correct invoices are forwarded to the subscribers. No billing errors mean no customer disputes rooted in such errors.

Personalized dunning

Dunning flows are personalized per customer. This includes intelligent payment retry intervals that are modified based on each customer’s situation. Other strategies include customized dunning notifications. For instance, if the system notices that a customer pays more successfully via card than digital wallet, it nudges them to switch to their card for payment.

Churn prediction

When customers show signs of inactivity and possible churn, you are alerted instantly. This enables you to re-engage those customers timely by carrying out appropriate retention campaigns. Other than that, churn prediction for each billing cycle helps keep revenue goals realistic. So businesses don’t overestimate renewals and end up with flawed financial planning.

Fraud detection

SubscriptionFlow keeps your revenue safe from fraudulent transactions. The system notices suspicious payment patterns across various payment channels. For example, abnormal usage spikes, abrupt high-value transactions, customer location changes, etc. Suspicious transactions get blocked automatically before they are able to take hold and cause damage.

Payment routing

Payment gateways are deployed smartly to save costs, and increase payment localization. Customers belonging to different regions are first shown the payment options popular in those regions for faster trust-building and payment collection.

Similarly, if a transaction’s value exceeds a specific limit, then its payment is routed through those gateways that charge lesser processing fees. This is to retain as much profit as possible.

Customer segmentation

Customers are auto-segmented based on their payment patterns, and subscriber activity. This allows you to develop different retention strategies for each segment. For example, the high value customer segment can be offered tempting upgrade offers, while the at-churn-risk segment can be offered special discounts.

Start billing with AI native billing platform today. SubscriptionFlow puts intelligent billing in your hands, and elevates your subscription management processes.