In e-commerce, transactions can fail for any number of reasons, and every time a transaction is declined, the business loses revenue. With subscription businesses, the problem is compounded by the fact that subscription revenue is recurring revenue. This makes effective management of billing and payments especially critical: any time a transaction fails, a customer can churn.
Fortunately, there are sophisticated, automated tools available to subscription businesses that can address the reasons for transaction declines and resolve many of these proactively—ensuring that when it’s time to collect the revenue, the transaction will be successful.
Not only does the business ‘recover’ more revenue from these automated processes, every time a transaction is successful means one less opportunity for a subscriber to churn. This ‘involuntary churn’ can occur when a subscription is cancelled due to a payment issue that isn’t repaired.
A sophisticated subscription management platform can provide a wealth of benefits to recurring revenue businesses that utilizes it to manage their subscription business or programs. In addition to decline management functions, such a platform provides automated tools to bill for recurring charges, calculate taxes, and process payments—the fundamentals of subscription commerce.
More advanced solutions may also provide tools and features that support the Finance department’s needs for efficient and accurate revenue reporting and revenue recognition—making integrations with leading ERP and accounting solutions such as NetSuite and QuickBooks Online a critical benefit. Recognizing revenue in subscription businesses is a complicated and time-consuming monthly requirement, so having a built-in revenue recognition feature can be important.
These are just some of the things businesses should consider when evaluating a subscription management solution. Automated decline management tools will increase your transaction success rate and maximize revenue. Finance teams will benefit from automated tools that increase accuracy and efficiency. And everyone involved in managing and optimizing the subscription business will have access to a solution that is built with the unique needs of subscription commerce in mind.