NetSuite Billing Automation

Automating billing is one of the perks of implementing cloud solutions. Some solutions are stand-alone and others are part of a good ERP system. In this post, we’ll cover what you should consider when choosing a billing solution. We’ll cover the list of features to consider when defining your billing needs. Then, we will finish with how NetSuite Billing Automation can help you automate this critical process.

What should you consider when choosing a Billing solution?

Revenue

1. Revenue streams. How do you categorize your revenue? Saas, on-premise, inventory, training, and professional services may all be important to you. Are separate products bundled at a single price? Think about all your revenue streams, what matters for reporting, and how your unique billing logic can be automated. Laying the proper foundation for future business objectives is critical to ensure the new system can scale with you.
2. Revenue Recognition. Do you have to comply with ASC 606? Many companies use cumbersome and error-prone spreadsheets combined with long hours to generate journal entries for their financial system. CRM and billing automation can also automate your revenue recognition and provide real-time reporting and consolidation across subsidiaries.
3. Price Ramping, Price Change, or Escalations. Can you change pricing during the contract? Does the customer know in advance that prices will increase? Do prices change only on renewals?
4. Revenue Recognition. Make sure Revenue Recognition is automated by updates to CRM, Invoices, and Change Orders. What are your Revenue Recognition cases? Do you need any specific type of fair value/allocation?

Data and Integrations

1. Input Data. Is your CRM data incomplete? Do you have a complete product catalog? Do your contracts have start and end dates? Without clean data, you’ll face the age-old problem of garbage in, garbage out. Fix your input data before you automate your billing process, or talk to us about how to manage the data migration process.  You must also consider the scale of your active contract and billing information.  Plative has conducted some very large data migrations so allow us to help evaluate your data and the capabilities of the target system. 
2. GL Entries. Are you exporting or integrating your operational data into a different accounting system? Does the information in your accounting system have all the data points to provide accurate financial insights? For most scenarios it is a leading practice to have your financial system be the system of record for billing and revenue reporting.
3. Data Migration. Can you export clean data for accounts, opportunities, contracts, and subscriptions? What is the amount of effort you need to clean up your data? Do you know the data point where you need some help before you migrate to another platform?
4. Standalone versus Product Stack. Don’t make a decision based only on a standalone solution. Choose your billing solution considering your system architecture and the needs of your entire customer journey. Some products are very good when analyzed in a silo but not so good when they have to interact with your other solutions such as finance, support, and CRM. 
5. Integration. When using an integration there are a myriad of questions you should ask. How will your systems be integrated? Should data flow in a single direction or bidirectional? Does your connector have all the features you need? Does your iPaaS have pre-built flows or do custom flows need to be built? Are there scenarios where contracts will be updated long after they are committed? Will there be any limitations or workaround in terms of integration?
6. Volume. How many transactions are you generating in every Billing Cycle? How many line items are on the average transaction? Is your model based on volume, price, usage, or something else? 
7. Reports and BI tools. Do you have all the data you need to grow your business and make decisions? What are the reports and KPIs you need to display? How are your KPIs calculated? Which of your data needs to be “Snapshotted” and changed over time reported?  Do you have unique ways of calculating things like ARR, MRR, Churn, and Upsell?
8. Forecasting. What reports need to include budgeting and forecasting of contracts for your financials and key decisions?

Defining Your Billing Needs

1. Billing Accounts. Do you have different bill-tos and ship-tos accounts for customers? Do you have a parent-and-child relationship among your accounts or customers?
2. Multiple Currencies. How many Currencies are you transacting with? Do you need to support alternative payment methods such as crypto?
3. Billing Types. How are you invoicing your line items: One-time, recurring or usage billing.  Are all lines billed the same or can there be differences?
4. Billing / Invoice Consolidation. Do you need to consolidate invoices after a change order? Do you need to consolidate based on billing accounts and/or parent and child relationship?
5. Automated Payment. Would you like payments to be automated right after an invoice is generated? Did you have deposits for your contracts? Do you have one Payment Processor for all your subsidiaries?
6. Renewals. Do you auto-renew your customers or do you need their approval? Are the renewal items different from the original subscription?
7. Dunning. How would you like to send collections notifications to your customers: 30, 60, 90 and 120 days? Do you have different client contacts for different types of products or bills? Should different products use different email templates or reply addresses?

Contracts and Legal

1. Multiple Legal Entities. Is your company invoicing in a multi-entity environment? Do you have common customers throughout your different subsidiaries? Do you need to share order revenue or COGS across those entities for a single order?
2. Contracts. How are you grouping all information from your original contract and all modifications that happened during the initial contract term to create a reliable repository for renewals? Consider upsells, downsells, and situations when products are merged or replaced.
3. Contract Co-termination. When you have a change order, does it co-terminate with your current contract? Do you have start and end dates for all your contract line Items?
4. Proration. How do you prorate your contract start and end dates, and pricing?
5. Licenses or Assets. Do you need to generate licenses or other assets for your clients as a result of the customer’s contract or subscription? Does there need to be an integration to your own product’s system?
6. Suspensions and Terminations. What happens when your customer wants to terminate the contract before the end date? What automation should occur if their receivables are 120 days past due?
7. Products. Do you use services and non-inventory Items? Do you also use inventory, kits, item groups, and assembly items? Do your contracts need to support a mix of items?
8. Upsells and downsells. Do you have Change Orders during your contract? Do you accept changes only on renewals?
9. Suspensions and Terminations. What happens when your customer wants to terminate the contract before the end date? What automation should occur if their receivables are 120 days past due?

Common Billing Options

1. Out of the Box NetSuite. NetSuite offers a very capable set of functionality for most billing scenarios. In this case, you will have access to a unique account for bill to and ship to.  Recurring billing can be automated via billing schedules and/or charge-based billing. Revenue Recognition is automated. Change orders will need to be updated manually or via customization that Plative can provide. You can also take advantage of NetSuite’s installment billing. This option is recommended for customers who have fairly basic billing automation needs.
2. SuiteBilling. NetSuite’s answer to advanced billing automation is SuiteBilling.  It can be used for very complex types of billings. It contains features like Billing Accounts, Proration, Upsells, Downsells, Suspensions, Terminations, Invoice Consolidation, Revenue Recognition Automation, Usage Billing, Automated Batch Payments and Renewals. While it can be complex, Plative has a lot of experience setting it up, and integrating with it from other systems such as Salesforce.
3. 3rd Party Billing Solutions. Many companies tag a 3rd party application for their billing needs. Common options are Zone Billing and Salesforce Billing (for customers who are already Salesforce users in addition to NetSuite). These solutions can provide a great deal of value for key use cases and should be included as part of the conversation when a company is looking to adopt a new billing automation solution. 

We hope you liked our tips on choosing a billing automation solution. If you found it interesting or want to learn more make sure to reach out!