Maximize Revenue: Step-By-Step Guide to Implementing an Automated Billing System

Introduction 

A majority of finance leaders say sending invoices immediately is the key to improving cash flow. The challenge, however, is that manual billing processes can be time-consuming, error-prone, and inefficient. This is where automated billing systems and e-invoicing solutions come into play. 

By automating the billing process, businesses can streamline their operations, reduce the risk of errors, and speed up invoice delivery. An automated billing management solution or e-invoicing solution is key to achieving this. In this article, we’ll cover how it can be implemented, key parameters to consider, how it can benefit your organization, and more. 

What is an automated billing system?

An automated billing system automates billing processes like gathering, reviewing, generating, and sending invoices with minimal manual input. It can be customized to meet customer requirements and may include a self-service portal for easy payment of invoices.

An automated billing system in B2B sales can be likened to a digital assistant for a busy executive. In traditional methods, managing invoices is comparable to personally tracking and organizing every appointment and task manually. However, with an automated billing system, it’s like having a reliable assistant who efficiently schedules appointments, organizes meetings, and reminds the executive of upcoming tasks seamlessly. Similarly, the automatic billing system handles invoice generation, delivery, and reminders, freeing up valuable time and ensuring accuracy in the billing process, just like a trusted digital assistant streamlines tasks for a busy executive.

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How does an automatic billing system work?

An automated billing system integrates with your company’s ERP, CRM, payment getaways, and other software to eliminate manual intervention. Here’s how an automatic billing system works:

• Gathering and verifying information

Billing happens when the customer places an order and the product is ready to be shipped. An automated billing system gathers and verifies the order status, product/service price, packing charges, transportation charges, and other information to prepare the invoice.

• Generate and send the invoice

Once the information is verified, the billing system generates the invoice and sends it to the customer via email. The automated billing system also includes a link for payment within the invoice.

• File the invoice copy

After the invoice is sent to the customer, it is time to file it for bookkeeping purposes. This helps in tax filing and tracking sales.

• Enter information in the sales ledger

The automated billing system also automatically adds new sales to the sales ledger. The sales ledger keeps track of all invoices in chronological order.

6 Key Benefits of Using an Automatic Billing System for Your Business

Invoicing is an integral part of every business, and for any company to scale, it cannot depend on traditional processes that are mostly manual. An automated billing solution is scalable, faster, and less error-prone.

Besides helping your team increase their productivity, an automated billing system also enables you to get payments much more efficiently. Here are some reasons you should consider automating billing for your business. 

Cost saving

The upfront cost of setting up an automated billing system might seem high, but in the long run, it reduces the costs in the form of reduced paper usage, fewer errors and rework, and lower FTE costs. 

With automation, you can achieve 70% lower invoicing costs with automated invoice generation and delivery. Moreover, you can automatically integrate your billing system with Account Payables portals and accounting systems to deliver invoices through emails, postal mail, fax, etc.

Improved efficiency

As the business grows, its order volume also goes up. Accounting teams may then find it hard to keep up with the billing process for multiple customers. This, in turn, reduces their efficiency and speed of work, resulting in delayed invoices and an increase in the number of delinquent customers. With an automatic billing system, managing a growing customer base and order volume is simpler and more efficient.

Higher accuracy

Manual work often results in errors; when it happens in the billing process, a company could face huge losses. For example, if there is an error in the billing amount, due date, inventory sold, or late charges, it can lead to revenue loss, customer attrition, and bad debt. Automated billing systems eliminate the need for manual data entry. By automating the billing process, businesses can ensure that the right customer is billed the correct amount, reducing the risk of errors and mistakes. 

Moreover, automated billing systems can provide real-time data on billing activity, giving businesses greater visibility and control over their billing processes. This can help companies identify and address errors or discrepancies quickly before they lead to more significant problems.

Better customer experience

Billing automation not only simplifies but also offers secure customer onboarding through authenticated emails, SSO, and buyer self-registration. Latest billing automation systems offer self-service portals supporting multiple languages, currencies, and payment formats. 

Best-in-class e-invoicing software also allows businesses to send customized emails to customers before their payment due date. The dunning feature makes collections easier by notifying clients about their payments before the deadline.

Data management

The traditional way of managing data follows a ‘file-based approach’ where the data is stored in separate files in the computer. These computer files are defined and managed by different computer programs. Storing important data in this manner leads to confusion and difficulty in finding the right information. 

An automated billing management solution integrates with other systems and ensures customers’ billing and invoice data are stored in a centralized database. This makes it easier to access and manage data compared to traditional billing processes.

Flexible Payment Options

An automated billing system offers flexibility in payment methods to accommodate the diverse needs of customers. It includes various payment methods, such as credit terms, ACH transfers, wire transfers, and purchase orders, while ensuring compliance with invoicing regulations and industry standards. 

Things to Consider When Implementing Billing Automation for Your Business

If you’re planning to implement an automated billing system for your business, here are a few things you must consider to avoid the blockers during implementation. 

1. Assess current billing processes and identify pain points.

   
   

2. Research and select the right automated billing software for your business.

   
   

3. Plan and prepare for implementation, including data migration and staff training. 

   
   

4. Execute the implementation process and monitor progress.

   
   

5. Plan for post-implementation evaluation and optimization. 

   
   

How to Set Up an Automated Billing System for Your Business?

It can be challenging to decide on the best automated billing system for your business. With many things to consider – payment methods, frequency, custom solutions, dispute management, integration options – it can get confusing to zero down on one automated billing solution. 

Let us make it easy for you to decide. Here are some things you should consider when choosing an automated billing system for your business. 

Choose the right billing software 

Selecting the right automated billing software that meets your business needs and price points is crucial in achieving your ROI goals. Here are a few things you must look at while choosing an automated billing software for your business:

• Invoice customization requirements

  
  

• Pain points you face with traditional billing methods

  
  

• Challenges or gaps in your dunning and collection capabilities

  
  

• Need for a customer payment portal

  
  

You can skip this step if your business has already moved away from paper checks and invoices. If not, e-invoicing should be the first step because e-invoicing reduces billing costs considerably, even if the workflow is manual.

Integrate with existing accounting software

Once you’ve decided on the right software for your business, it’s time to integrate your automatic billing system with your accounting software. 

For instance, if your business uses the accrual accounting method, then the billing system should automatically record journal entries based on your preferred method. It must update revenues and expenses on two occasions. The first time is when an invoice is sent, and the next is when the payment is made. 

Implementing a billing system without integrating it with your accounting software leads to increased efforts and a lack of team productivity. 

Configure billing rules

You can set up the billing rules once the first two steps are completed. For example, add rules around late fee charges if the invoice is overdue by ten days or a month. You can also specify when to create an invoice—when an order is placed or when it is ready to be shipped.

Now that your software integration is done, the next step is to set up a new autobill plan. It basically defines how and when your customers should be billed.

Depending on the type of automatic billing software you’re opting for, it requires you to decide the following as per your customers’ needs:

• Amount

  
  

• Frequency of payment

  
  

• Billing cycle

  
  

• Payment method

  
  

Once the settings are done, the billing is automatically executed based on the set parameters. 

Set up electronic invoicing

Generate digital invoices automatically and send them to your customers via email or other means with the help of Electronic Invoicing. It saves your team the manual effort and hours spent on creating recurring invoices. 

Electronic invoicing as part of your automatic billing system helps create, send, and track your invoices. 

Set up a customer payment portal

Offering a self-service portal enables customers to pay invoices at their preferred time. It also allows them to track invoices, payment due dates, and credit limit balances without having to contact your team. This saves your team from putting in extra time and effort. 

Tips for Transitioning to an Automated Billing System

Transitioning to a new billing system can be challenging for your team and the customers. To make the transition smooth and seamless, here are some tips you can consider. 

1. Inform customers in advance

Notify customers about the upcoming transition to a new billing system to avoid confusion or suspicion, especially amidst prevalent phishing attempts.

Send a dedicated email or include a notice on the final invoice before the switch to reassure customers and explain the benefits of the updated system.

2. Review payment terms

Seize the opportunity to reassess and potentially revise your payment terms while implementing the automatic billing system.

For instance, if your previous process involved mailing invoices with net 30 payment terms, consider adjusting them to reflect the efficiency of the new paperless system, where customers receive bills instantly and can conveniently settle payments online.

3. Explore other payment methods

Numerous automated billing management software platforms offer online portals enabling customers to pay invoices through various methods, ranging from electronic checks to major credit cards. 

It’s essential to identify your customers’ preferences and configure the billing system accordingly to accommodate their preferred payment methods effectively. 

How HighRadius Can Streamline Your Billing Process?

HighRadius’ AI-based E-Invoicing and Payment Software enables frictionless billing and payments with automated invoice delivery. With its self-service portal for your customers, you can reduce payment friction and increase customer satisfaction. The software auto-generates invoices and allows you to customize them based on your branding requirements. To make things easier, it also allows for automated integration with your A/P portals, including SAP Ariba, and accounting systems, such as QuickBooks and Sage to deliver invoices through emails, postal mail, and fax, among others.

With over 150+ global payment options, including ACH, credit card, SEPA, and Giropay, you can now accept payments from customers across the globe, easily and securely. But that’s not all. With HighRadius, you can also embed guest payment links in dunning emails through our e-invoicing solution, making payment processes seamless for your customers. And the best part? You can enable your customers to schedule payments, pay in installments, make partial payments, and support complex customer hierarchies, including parent-child scenarios. 

By using HighRadius’ AI-enabled EIPP software, you can deliver an unparalleled customer experience. Providing secure, flexible, and unique payment links allows your customers to have more control over their payment options, making them feel valued and appreciated. Don’t miss out on the opportunity to enhance your customer experience and expand your global payment options with HighRadius’ EIPP software.

FAQs

1. Why is an automated billing system important?

An automated billing system helps businesses in many ways. It automates the collections process, directly impacting the revenue stream. By automating billing operations, businesses can streamline their internal processes, reduce the risk of errors, and expedite the delivery of invoices to customers.

2. What are the advantages of an automated billing system over a manual?

Compared to manual billing systems, automated billing systems offer numerous advantages. One of the key advantages is improved speed. Automated systems can generate invoices and process payments much faster than manual methods, leading to quicker payment cycles and improved cash flow.

3. What are the goals of automated billing?

The primary goals of implementing an automated billing system are to enhance efficiency, reduce late payments, improve customer satisfaction, and optimize cash flow. By automating billing processes, businesses can streamline operations and reduce the time and effort required to manage payments. 

4. What are the functions of a successful billing system?

A successful billing system encompasses various functions that cover the entire payment cycle. An effective system should be able to generate accurate invoices, process payments securely, provide comprehensive reports on payment status and trends, and enable businesses to track customer payments efficiently.

5. How to automate customer billing?

To automate customer billing, here are the steps that businesses must follow:

1. Select suitable billing software

   
   

2. Set up customer profiles with contact and payment information

   
   

3. Create templates for invoices and payment reminders

   
   

4. Input data for products/services, pricing, and customer details

   
   

5. Schedule billing cycles to generate invoices automatically

   
   

6. Set up payment reminders for customers

   
   

7. Offer secure payment options

   
   

8. Address exceptional cases promptly for a smooth billing process.