While the internet of things (IoT) and smart devices have become more mainstream for consumers, the behind-the-scenes business processes of the companies that manufacture them remain unique—and very complex. This is especially true of smart device companies that offer subscriptions as the devices, mechanical, and/or digital machines need to be managed and tracked before, during, and after the contract kicks in. That’s why subscription billing software for smart device companies needs to work seamlessly with the rest of your operations.

When your business needs more than just subscription billing

Whether its demand planning, manufacturing, procurement, fulfillment logistics, device configuration, asset installation, supply chain or inventory management—this highly technical aspect of your offering requires more ERP functionality than just billing your customers. No matter how innovative your offerings are, you need to have the back-office infrastructure to support your growth, make your customers happy, and keep the cash flowing. The minute you stop providing value anywhere along this value chain, your customers will stop providing revenue.

Before we dig into subscription billing and how it fits into the ERP equation, let’s first take a look at some of the most common problems smart device and IoT companies face and how they can stop growth in its tracks.

5 common ailments of smart device companies

Tip: A band-aid won’t fix a broken leg. To find the best solution for your company, you have to have a complete understanding of your pain points and processes.

Subscription Billing Software for IoT Companies
#1: Disjointed Processes

You’re frustrated by:

  • Time-consuming workarounds
  • Duplicative work
  • Clunky Excel spreadsheets
  • Manual & confusing customer renewals
  • A different platform for every function
#2: Painful Closings

You’re frustrated by:

  • Manual reconciliations
  • Lack of controls and audit trails
  • Re-keying existing orders (and making mistakes in the process)
  • Rushed closes
Subscription Billing Software for IoT Companies
#3: Slow Order-to-Cash Process

You’re frustrated by:

  • Fulfillment errors
  • Backorders
  • Bad data
  • AR delays
  • Compromised liquidity
#4: Rev Rec Problems

You’re frustrated by:

  • Maintaining compliance with ASC606
  • Managing deferred revenue
  • Relying on spreadsheets and manual formulas
  • Validating data sources
  • Calculating allocations
#5: Manual Billing & Subscription Management

You’re frustrated by:

  • Manual upsells/downsells
  • Calculating promotions
  • Misaligned contract begin and end dates
  • Missed renewal opportunities
  • Manually tracking devices
  • Revenue leakage

The common denominator

Why do so many smart device companies struggle with the same problems? It usually boils down to this: a hodgepodge of disparate business management systems (CRM, professional services management, accounting, billing) that don’t talk to each other or share information in real-time.

You’re lacking a single source of truth, therefore spending more time tracking down information and data re-entry. This manifests itself into the frustrations discussed above.

What’s the fix?

Well, it depends. You need to have the right technology to support your unique IoT value chain operations, communicate with and manage your subscribers, and stay in compliance.

Subscription Billing Software for Smart Device Companies | 360 Cloud Solutions

Subscription billing software for smart device companies

While subscription billing is only part of an IoT company’s woes, it’s an important one.

Subscription billing is charging customers a predetermined rate at a regular, predetermined interval, i.e. monthly, quarterly, or yearly. This popular billing model allows a customer to spread charges over a period of time rather than all upfront. For business customers, subscription-based purchases are typically classified as operating expenses which boils down to fewer headaches and more cash flow.

With the recent boom of companies offering subscription-based products and services, there is no shortage of recurring billing software platforms to choose from. Like most other IT purchases, subscription billing software for smart device companies is largely based on your specific needs.

But what if you have a mix of product and service offerings and have needs beyond just what the popular subscription management platforms can offer?

For technology-forward IoT companies, that’s often the case. Here’s why:

  1. Being able to start billing and recognize revenue for the subscription usually also requires that the product be shipped/installed and/or the services be completed as well.
  2. Including all of the bundled elements (software subscription, professional services, etc.) on the same order is critical as you’ll need to ship/deliver/install/bill/recognize revenue for them all together. Per ASC606, they must be all together for “Fair Value Recognition” between these elements to keep them in compliance.
  3. Being able to track serialized devices, customer sites, and related customer assets that relate to your subscriptions is also a common requirement. Your customers probably want more than just an accurate bill for their subscription – so be ready to back that up with IoT-enabled subscription details relating to the what, how, where, & when.

And that means…?

You need to have the right mix of technology and processes in place to sell, manage, track, and bill both the products and associated subscription services for the lifetime of the relationship.

For smart device companies, that stack typically looks something like:

  • Cloud-based ERP – Look for one system that handles financials, demand planning, manufacturing, procurement, fulfillment logistics, device configuration, asset installation, supply chain or inventory management.
  • Professional Services Automation – A PSA system should streamline bid-to-bill processes associated with your services division, and include project and resource management, project financials, and invoicing capabilities.
  • Subscription Billing Platform – Automate recurring billing with easy renewals, subscription changes, rev rec compliance, device/assets/sites tracking, real-time integration with the financial system.

NetSuite + 360 Subscription Billing

Built with IoT in Mind

NetSuite provides built-in functionality to meet the complex requirements of IoT/smart device companies. From demand planning to inventory and fulfillment logistics—NetSuite is the world’s #1 cloud ERP system with the functionality to meet these needs.

When integrated with 360 Subscription Billing, it’s easier than ever for growing smart device subscription companies to expedite financial processes, ensure compliance, manage recurring revenue, deliver quality services, and more—all in one system.

It’s time to leave the manual labor and disjointed, siloed business processes where they belong—in the past. Get connected with one of our experts to discover the potential.