5 Billing and Invoicing
Whether you’re an ISV or MSP, competition is fierce and Microsoft’s requirements are constantly changing. As a Microsoft Partner, your business is growing, but you run on fixed margins and face stiff competition. Excel spreadsheets may work fine for your MSP billing and invoicing solution when you’re small, but they’re not going to cut it as you scale.
Stop making these 5 MSP billing and invoicing mistakes
In this blog post, we’re going to outline the 5 most common MSP billing and invoicing mistakes Microsoft Partners make, and why it’s so crucial you stop making them.
You only invoice on a fixed date
There’s no doubt that it would be easier to invoice all your customers on the first of the month. But making a new customer wait until the beginning of the month (or the date of your provider’s invoices) to start their subscription is terrible from a customer experience perspective, and it’s costing you revenue. You’re not nimble in your MSP billing and invoicing software if you’re unable or unwilling to invoice on the day the customer wants to start their subscription.
The same goes for license changes. If your customer wants to add two new licenses partway through the month, it’s a mistake to make them wait until their billing date just to make it simpler for your invoicing. Every day of lost revenue adds up when you’ve got hundreds of customers with thousands of licenses.
You only invoice annually
For sure, invoicing your customers annually reduces your administrative effort and costs. It also gives you the money upfront. The problem with only invoicing annually, though, is that it limits your customers’ options and makes you appear inflexible.
Especially in times of uncertainty, companies don’t want to have to commit to a subscription for a full year. Month to month is much more preferable. And just like you prefer the cash upfront that comes from an annual subscription, your customers prefer to keep their money so they have better cash flow.
If your MSP billing and invoicing software are manual, processing monthly invoices is a ton of work.
You wait to invoice
As an MSP reseller of Microsoft licenses, you’re making a mistake if you wait to invoice your customers until after you’ve received your invoice from Microsoft or an Indirect Provider. In this scenario, you see that you were charged for X number of seats for Y number of days/months) and then you invoice your customer accordingly.
But this gives you a false sense of security that you’re not losing revenue. And it’s not agile. Your customers want their MSP billing and invoicing schedule synched to their relationship with you, not your supplier.
You send multiple invoices
Here’s a very common scenario: Your customers pay for their licenses on the first of each month, but then they sign up for Azure mid-month and they buy a few devices towards the end of the month. Suddenly, your customer is receiving 3 or more invoices from your MSP billing and invoicing software each month. What a headache for your customer.
Instead, your customers want one invoice per month. Why? It’s simpler and faster to pay just one invoice, and it’s easier to evaluate your performance with just one invoice. With separate invoices, it’s much harder for your customer to track customer lifetime value and monthly recurring revenue.
You don’t provide self-service
Loss of control is the number one reason MSPs don’t want to implement a self-service portal for their customers. They want their customers to speak to a salesperson if they want to add licenses or make a change to their licenses. The reason? They want to control the customer interactions and journey. They also want to minimize the exposure to the risk of the customer not being able to pay for the additional licenses. And they want the opportunity to upsell them to a better plan.
But not providing self-service is a big mistake. Your customers just want to go about doing their jobs. They don’t want to be sold on something. They know if they need more licenses. They want to be able to purchase them quickly, on their own time, so they can tick that task off their to-do list. By not offering your customers a self-service portal, you’re providing a frustrating customer experience.
Why these 5 MSP billing and invoicing mistakes are hurting your business
This MSP billing and invoicing mistakes happen because you haven’t envisioned the full impact of the different moving parts on your MSP business. From provisioning, invoicing and self-service to customers’ changing needs and Microsoft making changes all the time, it’s extremely challenging to maintain control of your business and scale with peace of mind.
It’s time to change the way you do business
Find out the changes you need to make to avoid those 5 common MSP billing and invoicing mistakes—and learn how to demolish roadblocks so you can truly scale your business growth.
- Keep more money in your pocket because you’ve plugged revenue leaks
- Spend time helping your customers succeed, instead of wasting it on repetitive tasks
- Enjoy healthy cash flow because you’re able to collect payments faster
- Empower customers with self-serve options for managing subscriptions and licenses
Want to scale your cloud business?
Here are 7 best billing practices to follow for improving customer satisfaction,
and growing recurring revenue.