Subscription businesses in the B2B realm may have subscribers which are organized into different business entities—for example, a business with multiple locations, an enterprise with multiple business units, or a conglomerate with multiple subsidiaries. In order to bill these subscribers efficiently and accurately, they need to be able to define these “parent-child” billing relationships in their subscription management platform.
Recurly’s Account Hierarchy feature lets Recurly customers bill a parent account for its child’s subscriptions or bill a child’s account for its own subscription—and view these relationships in Recurly.
By creating parent-child relationships, Recurly customers gain increased efficiencies by automating billing through the flexible assignment of payment responsibilities for each account. For example, a parent account can be responsible for paying the invoice for one or many child accounts. Or, a child account can be responsible for paying its own invoice.
Here are some ways that you can use account hierarchy to benefit your subscription business.
SaaS business billing multiple child accounts to parent account
A University with multiple departments gives access to a software program that enables live streaming of lectures as well as publishing course content online. In order for all departments to have access to this service, the University must pay for a subscription for each department.
In this case, the University is the “parent” (billing owner) and the “children” are the various departments of the university, and the University is the entity being billed for the subscriptions belonging to the departments using the service.
Franchise SaaS business billing each child account directly
A SaaS company sells CRM software that collects contact information from a business’ customers who want to access the business’ wifi. For example, Bob’s Burger Joint, a restaurant chain, lets their customers access their wifi if they provide their name and email address. Each burger location has a subscription to the CRM software that is paid for by either the parent company (Bob’s Burger Joint headquarters) OR is paid for by the franchise owner of a Bob’s Burger Joint location. Account Hierarchy gives companies the flexibility to set up different payment arrangements.
Visibility and streamlined reporting
Through Account Hierarchy, Recurly customers have a clear view into a parent account and its associated child accounts, along with payment responsibilities and invoices, all in one place. This consolidated view into the revenue earned from a parent account and its associated child accounts helps to streamline financial reporting. These efficiencies in finance and accounting workflows result in significant time-savings in determining parent and child accounts’ invoices and revenue.
Can your business benefit from creating account hierarchies?