Invoice your own way with NetSuite SuiteBilling

SuiteBilling is NetSuite’s answer to the very complex world of subscription billing. Now available for Australian customers, this blog shares how SuiteBilling addresses the nuances of subscription-based billing to deliver a streamlined, flexible, and comprehensive solution that supports diverse pricing strategies, and ensures accurate billing and revenue recognition.

SuiteBilling fast facts

• Consolidated invoices including one-time, project-based, and subscription charges
• Scheduled pricing and subscription changes with pro-rating
• Multi-currency support for subscriptions
• Real-time reporting with audit and change tracking
• Flexible subscription options with volume, tiered, and flat rates
• Only available for existing NetSuite customers

The rise of the subscription business model

For many sectors – including SaaS, media, services, and retail – billing models are moving away from traditional one-off transactions towards more dynamic, subscription-based services. This reflects a broader trend towards what many call the ‘subscription economy’, where the convenience and flexibility of subscriptions are increasingly preferred by both customers and businesses.

However, this shift presents a number of challenges behind the scenes. Adapting to a subscription-based model requires businesses to overhaul existing billing systems, which were primarily designed for straightforward, one-time transactions. Traditional systems are often ill-equipped to handle the complexity of subscription services, such as managing recurring payments, adjusting to service upgrades or downgrades, and dealing with customer churn.

Hybrid business models – where companies blend subscription services with usage-based billing to align more closely with customer usage and preferences – compound the challenges. These models demand even more flexibility and real-time visibility into customer interactions and usage data, pushing traditional billing systems well beyond their limits.

Recognising the need for a comprehensive billing solution that accommodates the diverse requirements of subscription and hybrid billing models, NetSuite has released SuiteBilling. This native module has been developed specifically to meet the complex demands of subscription business models.

A closer look at NetSuite SuiteBilling

NetSuite SuiteBilling is an advanced cloud-based billing solution with a set of tools designed to modernise and streamline billing processes.

Consolidated invoicing

SuiteBilling can accommodate various types of invoice charges within a single customer subscription. This is crucial for businesses that have complex billing needs. Here’s a breakdown of how SuiteBilling supports different charge types:

1. One-time charges: These are non-recurring charges that can be applied to a subscription for things like setup fees or special one-off services.
2. In-advance charges: Businesses can bill customers for services or products that will be delivered or used in the future. This is typical for subscription-based services where customers pay at the start of the billing period.
3. In-arrears charges: This allows a business to bill customers for services or products after they have been delivered or used, which is common in utility billing or post-paid services.

By combining these different rating models in one subscription, a company can create a comprehensive billing structure that includes initial setup fees, recurring license fees, and variable charges based on consumption, all within a single billing document. This both simplifies the customer’s billing experience and makes it easier for businesses to efficiently manage and maintain subscriptions.

Flexible pricing and packaging

Accommodate a variety of pricing structures, including one-time charges, subscriptions, and usage-based billing. SuiteBilling provides the flexibility to tailor pricing models to meet market demands and customer preferences.

• Flat model: This is the simplest pricing model where a business charges customers the same fixed amount in each billing cycle, regardless of usage or consumption levels. It’s straightforward and predictable for both the business and the customer. An example might be a monthly subscription service like a streaming platform that charges a flat fee for access to its content.
• Volume model: In this model, the price a customer pays is based on their level of consumption or the volume of goods or services they purchase. The ‘volume tier’ that the customer falls into determines the unit rate applied to the entire quantity they’re purchasing. For example, a customer might be charged a lower unit rate for using 1,000 units of a service than if they use only 100 units, incentivising higher usage.
• Tiered model: Similar to the volume model, the tiered model charges customers based on consumption but in a more granular way. Each tier has a specific rate, and the consumption amount falls into multiple tiers as it increases. For each tier that the consumption passes through, the corresponding rate for that tier is applied to the quantity within that tier only. The final charge is the sum of the costs from each tier. For example, the first 100 units might be charged at one rate, the next 200 units at a lower rate, and so on, which encourages more usage while still offering lower rates for higher tiers.

Change orders

This feature allows organisations to manage modifications to their customers’ subscriptions.

• Scheduled changes: Businesses can schedule changes to a subscription that will take effect at a future date. This is particularly useful for planned adjustments, such as contractual price increases, seasonal adjustments, or changes in service levels.
• Automated changes: Instead of tracking subscription changes manually, SuiteBilling automates this process. Once the change order is set up, the system will automatically implement the changes on the specified effective date.
• Immediate or future changes: Change orders can be configured to take effect immediately or on a future date, giving businesses the flexibility to respond to immediate needs or plan for upcoming changes.
• Pricing and quantity adjustments: The change orders can be used to modify the pricing, such as rate changes, or the quantities, for example, if a customer wants to increase the number of licenses they are subscribing to.
• Elimination of manual tracking: By allowing these changes to be entered into the system as soon as they are agreed upon with the customer, SuiteBilling removes the need for manual reminders or tracking systems to implement the changes.
• Proration: SuiteBilling supports prorating, which means it can adjust the billing amount to account for the portion of the billing period that the change applies to. This ensures customers are billed fairly if a change occurs mid-cycle, only reflecting the new pricing or quantities for the exact duration they are in effect.

Customer specific pricing and discounting

This feature refers to the system’s capability to manage unique pricing arrangements tailored to individual customer agreements and contracts, including:

• Pricing templates: Allows the creation of standard templates for broad or specific customer segments, simplifying common service or product pricing setup.
• Customisation for individual deals: Offers flexibility to modify or create new subscriptions for special pricing negotiated during customer dealings, accommodating specific terms like purchase volume or contract duration.
• Contract-specific agreements: Enables tailored subscriptions that reflect unique contractual terms with customers, ensuring adherence to negotiated pricing.
• Item-specific discounting: Permits discounts at the item level within a subscription, allowing different products or services to have unique discount rules based on the customer agreement.
• Flexibility and automation: Ensures pricing and discounting rules, once established, are automatically applied, minimising manual intervention and potential billing errors.

Reporting and insights

Real-time billing and financial data capabilities enable organisations to gain immediate insights into various key performance indicators (KPIs) and metrics essential for effective financial management and strategic decision-making:

• Audit and change tracking: This allows businesses to monitor any alterations made to billing and subscriptions, ensuring transparency and accountability within the billing process.
• Monthly Recurring Revenue (MRR): A crucial metric for businesses with subscription models, MRR reporting provides insights into the predictable and recurring income generated from customers over a month, aiding in revenue forecasting and planning.
• Total Contract Value (TCV): TCV reporting calculates the total worth of customer contracts over their lifespan, offering a long-term perspective on revenue generation.
• Customer churn: This metric tracks the rate at which customers cancel or do not renew their subscriptions, which is vital for assessing customer satisfaction and loyalty, as well as identifying potential areas for improvement in products or services.

Seamless integrations

SuiteBilling is designed to work in tandem with other NetSuite modules, such as Advanced Revenue Management, which handles revenue recognition, and Core Financials, which manage the essential financial functions of a business. This means billing data directly informs financial reporting and compliance.

Customer engagement

It’s also worth adding that by making billing activities a point of engagement, SuiteBilling helps businesses build trust and open up opportunities for dialogue about service usage and value.

We can help you get the most out of SuiteBilling

At Annexa, we can guide you to implement NetSuite SuiteBilling for your organisation, customising and configuring your invoicing processes to ensure clear and consistent billing rules across all customer scenarios.

Contact us to learn how we can help you introduce seamless efficiency and scalability for your subscription-based business.

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