The Evolution of Billing: How Companies Are Learning to Manage Flexibility and Revenue Simultaneously

Today, monetizing services and services is no longer just a financial process – it's now part of the customer experience. Companies that can flexibly manage pricing, respond more quickly to market changes, and forecast revenue more accurately win. But even for them, it's not that simple: customer convenience often conceals a business headache. Complex payment schemes, manual subscription management, and payment errors all slow down operational processes and hinder business growth.

Is switching to modern billing systems the solution? What are the strategic advantages, and how are companies balancing flexibility and manageability in the current reality? We discussed these issues with Irina Kuznetsova, Product Director of BillogicPlatform "Inferit Billing".

Today, companies are forced to constantly reassess their monetization models. How, in your opinion, has the business approach to this changed over the past three to five years?

– Companies' approaches to monetization have evolved significantly, largely due to increased competition, changing consumer behavior, and technological advances.

Firstly, SaaS (Software as a Service) and subscription models are now dominant. While previously customers were offered primarily one-time purchases, businesses are now striving for predictable recurring revenue (ARR/MRR). This has shifted the focus from "selling a product" to "retaining a customer" – their lifetime value (LTV) has become more important than a one-time transaction. This approach is already widely used in IT, media, gaming, and even among consumer goods, such as coffee subscriptions.

Secondly, the "freemium" model–"free demo, paid full version"–has transformed. Games have adopted the Free-to-Play (F2P) model, monetizing through in-game purchases, battle passes, and items. Other industries have adopted the Product-Led Growth (PLG) model, where users start with a product for free and pay for advanced features, integrations, or team collaboration. Furthermore, many companies have begun monetizing ecosystems, building entire networks of paid services around a free or partially free core.

Another key change in monetization is the shift from license-based models to usage-based or hybrid billing options. This is how businesses seek a balance between predictable revenue and customers' willingness to pay for what they actually use. Usage-based billing, which is based on actual service consumption, and hybrid models, where customers pay regularly for a fixed amount and additionally for any excess usage, are becoming increasingly common. It's safe to say that this is the consumption model of the future, as it takes into account the needs of each customer and ensures business sustainability.

Finally, personalization of services is a trend directly related to all of the above. Companies are rethinking their approach to subscriptions. The introduction of a flexible model is becoming a key factor in customer retention and increasing LTV. This allows customers to independently manage their service offerings based on their changing needs. This transforms a subscription from a static, recurring payment into a dynamic service.

– Are there any examples where excessive flexibility has resulted in difficulties for businesses or clients?

– Of course. Excessive flexibility and customization of billing is a double-edged sword. A classic example: a startup offers customized payment terms to attract large clients. This leads to a "zoo" of contracts and the practice of manual billing. For one client, the payment is split into several invoices with input data that changes every month. For another, the post-payment deferral is calculated from the moment the client confirms receipt of the invoice. For a third, a formula with special rounding rules is used, known only to the account manager.

Automating a business sometimes requires the determination to abandon excessive customer focus. You need to be able to reject unprofitable or complex customer requests that hinder growth.

As for clients, they often respond to this individual, "manual" approach to billing with poor payment discipline, allowing themselves to pay "when it's convenient"–after all, the business will "adjust."

– How to strike a balance between user convenience and manageability for the company?

We typically offer a "reasonable sufficiency" approach. Its goal is to ensure that 90% of customers don't even think about billing; it simply needs to work predictably and conveniently. To achieve this, we first design pricing plans based on users' key questions: "Can I pay the way I want?", "Can I easily change my subscription if my needs change?", and so on. Then, rules are created to manage pricing plans and automate billing.

This is what makes up an automated system: it manages balances, issues invoices, processes payments, monitors subscription statuses, and prevents customers from getting bogged down in routine tasks. Of course, for complex cases, there's always an "emergency escape"–the possibility of manual adjustments–but this is the exception, not the rule. In most cases, balance is achieved through the cost-effectiveness and controllability of the automated system and well-thought-out, customer-focused pricing.

How easy is it for companies today to transition to new billing models? What resources does it require, and how long does it take?

Transitioning to a new billing model is a strategic step for a business. The complexity and timeline directly depend on the scale of the changes: switching from one-time sales to subscriptions is a fundamental overhaul, while the introduction of flexible hybrid pricing is more targeted.

First and foremost, a company should invest in technology, process organization, and specialists. Why? Changing a billing model isn't simply a matter of "installing a new system." Integrations with CRM, ERP, and analytics systems are essential, so technology is paramount. A modern billing platform that's user-friendly for all users becomes the technological core of a subscription business.

Process organization is the second most important factor in a successful transition. It's important to understand that changing the billing model impacts everything: from contract language and value creation principles to revenue recognition and customer debt management. This represents a tremendous amount of work for the finance and legal departments, and they must be prepared for it.

As for specialists, they are the core of all processes. If the sales team, for example, doesn't understand how to sell subscriptions, and the finance team doesn't understand how to account for them, even the best technology won't work. An internal change program is needed that explains to employees not only "what to do" but also "why" – for both clients and the company.

Returning to the question of transition timelines, I can say from experience that a simple migration to basic subscriptions will take an average of 3-6 months. However, the full implementation of a flexible, pay-as-you-go, usage-based model will take from 9-12 months to a year and a half. The timeline will depend on the maturity of the company's processes.

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– What defines "modern billing" today from a technological perspective? Is it integration with FinOps, analytics, or CRM?

"Today, 'modern billing' is synonymous with customer-centricity and flexibility, implemented at the technological level. Instead of abstract explanations, I would provide a concrete technological checklist."

First, a live subscription that customers can instantly change (upgrade, downgrade, or cancel) without bureaucracy or repeat purchases. A fair recalculation, including refunds and prorated repurchases, is a must-have.

Second: support for all monetization models–from recurring subscriptions to pay-as-you-go (consumption-based pricing), including hybrid formats. If your product requires a pay-as-you-go model and your billing system doesn't support it, you'll fall behind your competitors and lose customers.

Third, the system doesn't simply "record" data; it exchanges information with CRM and analytics systems and, crucially, serves as the foundation for FinOps. When analyzing performance, this helps answer questions like: "How are customers using the product?", "Where are they overpaying?", and "How can a business forecast revenue?"

– When is it worth investing in your own billing solution, and when is it more profitable to choose a ready-made product?

– Choosing between in-house billing and a ready-made solution is a classic tradeoff between control/flexibility and speed/cost. It all depends on the company's strategic goals, resources, and the uniqueness of its business model.

Investing in your own billing solution is justified in the following cases. For example, you have a unique, complex business model. If your company operates in a highly niche area with exotic pricing (complex discount schemes, micropayments, billing for IoT devices), no ready-made billing platform can support this without costly customization. It's easier to build it yourself.

Or the company has high security and compliance requirements. In highly regulated industries such as fintech, healthcare, and the public sector, there may be a need for complete control over data and procedures. To ensure 100% compliance with specific standards, it's easier to develop everything from scratch.

Another less obvious reason is the high transaction volume. Under extremely high loads, the commission costs of ready-made solutions can reach astronomical levels. In-house billing helps significantly reduce operating expenses (OpEx) in the long term, although it increases capital expenses (CapEx).

Regarding the advantages of ready-made solutions, speed to market is a critical factor. Such platforms allow you to launch billing in weeks, not months or years. This is an ideal option for startups and projects that need to quickly validate their hypothesis and begin monetization.

Ready-made solutions are also beneficial for those with a standard business model. Do you use common subscription models? A ready-made product will cover 95% of your needs. Another factor is limited development and support resources. Creating your own billing system entails ongoing costs for updates, bug fixes, and adaptation to changes in legislation and payment systems. With a ready-made product, all of this falls on the vendor.

– How compatible are billing systems and AI today? Is it possible to use AI in billing, and are there any examples?

Billing systems and artificial intelligence aren't just compatible – they're already actively and successfully integrated. The value lies not in replacing billing systems, but in their intelligent complement. Thanks to the open architecture of modern systems, AI models can be integrated as a service for analyzing large amounts of data: transactions, payment history, and customer data.

One example of using AI in billing is customer churn management. Algorithms analyze customer behavior: frequency of support requests, changes in service consumption, payment delays. They then provide recommendations for more effective business-customer communication.

Telecom operators and streaming services use this data to offer personalized bonuses to those at risk. But AI can also work for the customer, for example, by recommending the optimal tariff for their consumption.