Automated Billing with AI: How it Works?

AI is increasingly being used to augment the billing capabilities of subscription businesses. Smart AI-backed invoicing software is leading the innovation, while manual billing techniques are now considered outdated. With this payment landscape evolution, machine learning is becoming an efficient billing enhancer.

It silently powers background operations like revenue forecasting, payment retrying, fraud detecting, and so on. These workflows strengthen the business’s central tasks like invoicing, helping them keep up with the trends. So how are smart billing agents helping do all this? Let’s get into the details.

What do we mean by AI billing agents?

A billing agent is a software system that learns from billing data intelligently to take appropriate actions or make predictions. In simpler words, billing agents help businesses understand what is happening, and what to do next. They differ from rule-based automation.

In rule-based automation, a billing system simply follows your pre-set rules automatically. It doesn’t deviate from these established rules. On the other hand, an AI-first system analyzes the current and past data (customer or billing data), and decides upon the best course of action it can take.

Moreover, AI billing agents don’t rely on manual commands solely. They self-optimize by identifying various data patterns. For example, if a customer changes their payment methods often, such as from card to wallet and back, the AI agent gauges the payment success rate with both.

It can deduce which payment method is the most effective for that customer, and may prompt them to use that method when they face a payment failure. So these are the essential traits of AI agents that help refine billing workflows:

1. Intelligent decision-making: AI agents make changes to billing workflows on their own after deciding upon the best course of action. Example: The system updates the payment retry schedule when it analyzes at what times the retries are the most successful.

2. Predictive capability: The system can predict trends such as monthly revenue and others. All forecasts are based on the events of the past, and what has been analyzed from them.

3. Context Awareness: Consumer data, past purchase history and preferences are understood so that they can be given tailored offers. Example: giving customers’ product suggestions in their carts to increase sales.

4. Continuous learning: AI models keep on upgrading their abilities by learning continuously. Their learnings are based on the past and current billing data and customer activity, and are utilized in making billing more personalized for users.

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Why businesses need automated billing with AI?

When subscriber volume increases, billing operations undergo more complication as well. Businesses cannot keep an eye on every single customer detail and activity themselves. It is a feat that cannot be achieved with manual effort. Imagine manually going through thousands of invoices trying to find anomalies in them—that sounds as impossible as it actually is.

AI-powered billing saves manual effort where it can, and allows businesses to continuously scale. Instead of chasing invoices and reconciling payments, your finance teams can focus on the more productive tasks, such as strategizing.

Moreover, intelligent systems help reduce failed payments, and that in turn blocks involuntary churn. This is a massive achievement, as payment failures contribute a great deal to churn. Even more than cancellations themselves. AI-backed software predicts payment success timings, modifying the retry schedule accordingly and making it more effective against failures.

Another important aspect of billing with AI is fraud detection and prevention. The software can identify suspicious payment patterns across multiple payment methods. For example, a user making repeated purchases using different cards, or trying to change billing address to a different country out of the blue.

The software flags these actions, so that they can be further analyzed and blocked before serious damage is done. This helps foster trust between the business and its customers, and also helps protect revenue.

How AI agents power invoice management?

Billing software with AI capabilities help with invoice management in these ways:

Automatic invoice creation

Invoices are created automatically following the right formats, and including the right tax calculations. Invoice creation is no longer time-taking, as AI-powered systems carry it out instantly whenever needed. Events that necessitate invoice generation are renewals, plan changes and proration.

Invoice categorization and reconciliation

Invoices are also categorized accurately without human help. They can be classified by the type of revenue they generate. For instance, recurring or one-time, earned or deferred. The system also helps format invoices for each revenue type differently. Formats can also differ according to the customer segment the invoices are meant for.

Plus, the AI-backed system also makes reconciliation manual input-free. It syncs invoices with the business’s integrated accounting system so that the system sorts and matches payments on its own, reconciling them or flagging discrepancies.

Anomaly detection

If invoices contain any flaw, the business is alerted automatically, so that it doesn’t send out flawed invoices. Flaws can include bill calculation that doesn’t match the customer’s plan, incorrect tax numbers, outdated payment dates, etc. These are flagged before any damage is done.

Personalized reminders

General emails and SMS messages are less effective modes of communication for subscribers. That’s because they treat every subscriber the same way. An AI billing agent personalizes such reminders from customer to customer by adding in some personal touches such as their names.

It also changes its payment reminder strategy for customers according to their usual payment patterns. For instance, if a customer is a habitual late payer, the system can send them an earlier payment reminder that nudges them to pay on time.

Forecasting invoicing flows

Based on how the invoicing typically goes for a business, AI can forecast a flow. For example, how many invoices are likely to be paid, how many payment delays are expected, and how much churn is possible.

This forecast assists the business in addressing its expenses, and allocating resources more efficiently. The business doesn’t overestimate its incoming revenue, and doesn’t end up overspending.

How SubscriptionFlow acts as your AI billing agent

SubscriptionFlow is a next-gen AI billing platform that removes complexity from invoicing management. It drives growth using AI-backed machine learning, data prediction and smart billing actions. This is how it does that:

Making payment retries smarter

With SubscriptionFlow’s AI-driven solutions, retrying payments is a lot easier than before. The platform uses machine learning to analyze past payment patterns of each customer. Then it figures out the best way to schedule retries i.e. following timelines that make retries the most successful.

With this feature, you don’t have to apply the same retry strategy to each customer, like attempting a single retry each day, at the same time. Instead, the retries can become dynamic, and more targeted, dealing with each failure more effectively.

Predicting revenue and invoicing flow

Businesses can predict their incoming revenue for the month, quarter or year (according to what they have enabled on their dashboards). Getting a closer-to-reality forecast helps with more strategic financial planning.

What’s more, businesses can forecast finances for each billing cycle as well. Such as, their likely renewal rate, timely payments, delayed payments, and churn. This keeps their expectations realistic, and helps them address inefficiencies beforehand to increase renewal rates.

Giving smart insights into customer activity

Customer interaction with your business across various touchpoints is monitored, and offers are extended accordingly. The software boosts your upsell potential by nudging customers to upgrade plans at the right time.

When used with ecommerce sites, it offers intelligent product recommendations, increasing sales. Plus, it also identifies whenever a customer is at churn-risk. And tailors renewal offers for them when they are about to cancel to encourage retention.

Speeding up reconciliation

SubscriptionFlow accelerates month-end closes by handling the transfer of billing data to your accounting system. Data syncing is real-time, and triggers automated flows in your accounting system so that it reconciles payments on its own, and accurately.

Supporting dynamic invoicing

Invoices shouldn’t be static for all, and you shouldn’t have to modify them for each customer separately. The software carries out invoicing dynamically, auto-assigning fresh and modified invoices to customers that go for plan upgrades or downgrades.

The billing software also auto-activates the right subscription plans based on the deposited amounts. It also intelligently reads through usage patterns, and generate invoices that capture unique usage levels clearly.

Segmenting customers

Customers can also be smartly segmented based on their billing activity. Segments like “punctual payers”, “late payers”, “high revenue clients” etc. can be formed, and customers sorted into these categories automatically. Smart segmentation assists in personalizing outreach to different customer groups, and creating a retention strategy unique to each.

AI-powered invoicing is the future—and the future is already here. Sign up for SubscriptionFlow, and make AI-driven billing effortless.