May 24, 2023 API Strategy

Invoicing and Billing Software

The decisions you make around software for billing in small business operations can have major repercussions in terms of how you can track billable services and raise invoices. The right invoicing software for your API business can even help you get paid on time.

Invoicing and Billing Software Explained

There’s plenty to think about when it comes to invoicing and billing software for API products. Billing software that’s easy to implement and use is obviously a must. But there is more to the right software than usability. For usage-based billing, invoicing software needs to help you get the most out of your APIs, enabling you to monetize them and implement a range of different billing options and tiers.

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How Will This Software Make Your Invoicing Process Easier?

Automation is key when it comes to implementing a billing system that makes invoicing easier. After all, the more you can automate, the less manual time and effort your team needs to allocate to invoicing. This becomes increasingly important as you scale your API-first small business.

Achieving automated billing isn’t hard; you just need the right invoicing software in place. Moesif is a case in point. You simply connect it to a billing provider such as Stripe, Chargebee, or Recurly to enable automatic invoicing in minutes. Bi-directional sync means that you can take a deep look at how your customers’ API usage translates into revenue, whilst ensuring that each of them receives accurate invoices based on their precise usage.

When selecting a billing system, as well as choosing one that will make your invoicing process easier, make flexibility a priority. Doing so will enable you to experiment with different pricing models and to change these as business needs demand. Make sure you can easily include custom pricing plans too – you never know what the future holds. With a custom pricing option at your fingertips, you can be ready to bill for any eventuality.

How Does Billing Software Handle Payment Processing and Invoicing for Online Sales?

Different billing software handles payment processing and invoicing in different ways. If you’re making sales online and driving adoption through self-service, then you need a payment processing solution that’s an integral part of your model.

Moesif handles this by providing metrics to customers on their usage and quota. The system empowers customers by providing detailed reports on what’s consuming their quota, then invoices automatically based on that consumption. It supports prepaid, postpaid, pay-as-you-go, and other pricing models, metering any usage metric – whether API transactions, compute resources, unique users, or anything else. In doing so, it handles payment processing and invoicing in one seamless service – just what small businesses need from a billing system.

Best Billing Software for a Small Business

There are so many options out there when it comes to choosing the best API billing software for a small business. There are free and low-cost billing software options, as well as systems with a huge range of functionality, designed to meet every need of your business both now and as you scale.

What is the best billing software for a small business? Answering this means breaking things down a bit and thinking about your business needs (now and in the future), your budget, your billing model, and more. It’s also worth considering what additional attributes you could benefit from when it comes to choosing the best invoicing software. For example, could you benefit from behavioral emails or embedded dashboards? The more you explore considerations like this when choosing billing software for your API business, the more likely you will be to end up with a product that’s the perfect fit for your particular needs.

How Is Your Small Business Going to Benefit from This Billing Software?

The first question to address is how your API small business is going to benefit from the billing software. This should be your list of non-negotiables – the essential things that you need your new billing system to deliver. Some examples of the benefits that invoicing software can deliver include increased billing accuracy and reduction of errors, easy and anytime access to your billing data, a reduction in the amount of staff time spent on invoicing, and even faster payment of your invoices.

Most API businesses can benefit from all of these. Other benefits can include making it easier to release revenue by understanding customers’ usage and billing patterns and enjoying easier access to an accurate overview of your business’ financial health.

Rating these factors by importance ensures you remain focused when researching invoicing system options.

Should Small Businesses Look for Certain Accounting Software Attributes?

There are certain attributes that small businesses should look for as standard when seeking the best way to monetize their APIs with usage-based billing. Ease of use should top the list every time. An invoicing system that’s easy to use will save your team time. It will also help ensure you’re able to use the software fully, implementing all of its features, and reaping all of its benefits. Consider ease of setup, installation and integration with the systems you are already using, as well as how easy the billing software will be to use on an ongoing basis.

While most invoicing software for small businesses will include these attributes as standard, there are also additional features that may be of benefit. For example, could your API business benefit from behavioral emails that trigger when a customer reaches a certain percentage of their quota, or takes an action like adding another user? Automated email suggestions, that they move up a pricing plan tier, could be an excellent way to unlock revenue.

Embedded dashboards are another example of a handy attribute that can add value as part of a billing software package. They can provide customers with clear visibility of their subscription quotas, enabling them to keep a close eye on their usage. This can be an excellent customer sat tool, as it keeps them up to speed regarding their usage and avoids surprises, like quotas running out or bills being higher than expected – both of which can contribute to customer churn.

Clearly, the best invoicing software can deliver benefits on multiple fronts for your small business. It can actively increase revenue when you deploy the right features, ensuring that you don’t just have an efficient billing software solution, but one that underpins robust long-term business health and growth.

Benefits of Billing and Invoicing Software

Benefits of billing and invoicing software summary:

Increased billing accuracy
Reduced error rate
Efficient access to your billing data whenever required
Savings on team time, both in terms of raising invoices and dealing with queries and errors
Faster payment of your invoices
The ability to realize your APIs’ value through enhanced monetization opportunities

These lead to headline business benefits of greater operational efficiency and, when you choose the right billing software for your invoice processing, the potential for higher customer sat rates. After all, little is likely to irritate your customers as much as issues with billing that lead to an interruption of their service.

What Are the Factors to Consider When Choosing Invoicing Software?

When choosing invoicing software for your API business, consider your system from your customers’ perspective. An automated email that warns a customer when they are approaching their API rate limit, for example, or the due date of their invoice payment, could head off an inadvertent missed payment and/or service interruption. This simple, automatic notification could pay big dividends in terms of avoiding awkward, stressful situations that result in customer churn.

Another factor to consider is that automated notifications can help identify unusual spikes in traffic. Whether as a result of something positive, such as demand for your service snowballing, or something more sinister, such as a distributed denial of service attack, early awareness of traffic spikes can help your customers avoid unexpectedly large bills or service interruption when they hit their quota early.

Does Your Company Need a Custom Invoicing Software for Smart Billing?

Smart billing enables you to bill on any metric and in any format, whether prepaid, postpaid, pay-as-you-go, or whatever else you need. Invoicing software that delivers this kind of customizability can be invaluable when it comes to the way you manage revenue from your APIs, enabling a comprehensive and clear approach to billing.

What Features Can You Get with Free Billing Software?

There are plenty of free billing software options on the market, ranging from genuinely useful systems to those that are awkward to implement and end up being more hassle than help. What features can you get with free billing software?

What Features Do You Have with the Free Version of Invoice Software?

Each software offering varies in terms of its free plan features. However, broadly speaking, free versions can include anything from unlimited invoices and unlimited clients, to integration with other software, such as inventory or time-tracking systems. Some free invoicing systems may also include a client dashboard or portal.

What Things Should I Consider When Choosing Monthly Billing Software?

For a small business, staying within budget is hugely important. As such, if you’re looking for free API recurring billing software, you need to consider what “free” really means, as a free software for billing in small businesses could end up costing you money.

That’s because some “free” software is only really offered as a trial. After a certain period, you end up having to pay to continue using the system. Other billing software uses a freemium model. That can mean the software will be free for as long as you need it, but that certain key features and functions are locked away behind a paywall. If you want to use them, you need to pay. Other freemium models let you use the billing software until you hit a certain usage quota, after which you have to move up to a paid plan.

The danger here is that you implement a free piece of software, including going through integration with your current systems and the staff (and customer) learning curve, then suddenly you’re into billable territory with it. Often, it’s far easier to start paying for the software than to go through the process of finding and implementing a different free system.

Given that, it may be worth accepting from the outset that there will be a cost attached to your invoicing software. Understanding this means you can look at paid versions of billing software from the outset, thus widening your options.

Can It Accommodate Several Different Payment Options?

Any decent invoicing system, whether a free or paid model, should be able to accommodate a range of different payment options, to enable easy and speedy payment of your invoices. Check the options each system has as part of your research.

Invoicing Software Security

One key factor to consider with API invoicing software is how secure it is. After all, billing software has access to some of the most important and sensitive data within your business. Encryption, secure key management, firewalls, and more therefore need to be on your radar when it comes to choosing the right invoicing software for your small business.

How Can You Know if Your Data Is Safe Using Invoice Software?

One of the best ways to ensure your data is safe when using invoicing software is to choose software that adheres to current standards. Moesif, for example, maintains an active SOC 2 Type 2 attestation. All data is encrypted at rest and in motion with Moesif, with server-managed keys in ISO/IEC 27001 and ISO/IEC 27017 compliant data centers. Client-side encryption enables zero-knowledge security, with Bring Your Own Key functionality, meaning that not even Moesif can decrypt customer data or access it. Automatic key rotation is available with numerous prebuilt plugins.

This kind of compliance means you can enjoy peace of mind when invoicing, whether you are issuing one-off bills or recurring invoices. Other features to consider include things like enterprise single sign-on, audit logs, and fine-grained access control, all of which can ensure you keep your data private and secure.

How Does Invoice Management Software Handle Verifications and Approvals?

Asking is invoicing software secure also involves considering how an invoice management system handles verifications and approvals. Invoice processing means not only issuing invoices but ensuring they are verified and approved for payment in good time – and that payments are recorded in order to avoid service interruption.

When seeking invoicing software for your API business, be sure to look into how your potential billing software providers handle matters such as verifications and approvals, as part of researching their security standards and processes.

Best Invoicing Software to Get You Paid on Time

Issuing accurate invoices at regular intervals and combining them with automated notifications such as email payment reminders, can help you get paid faster. Exploring the best invoicing software to get you paid on time is best done through an example – in this case, using Moesif and Stripe.

It’s easy to implement Moesif with Stripe, Recurly or Chargebee, as no coding is required. You simply connect Moesif to your billing provider and start enjoying the ability to accurately meter usage, embed usage metrics, and automatically invoice. This ‘plug and play’ style of implementation is something to look for when choosing the best invoicing software for your API business, whether you’re opting for free invoice software or a paid product.

At the heart of using Moesif and Stripe to get paid on time is the inclusion of “billing meters” in the Moesif platform. This is what enables you to customize your billing approach to suit your needs. both now and as you scale, all with a minimal amount of engineering effort.

All you need is a Moesif account and a Stripe account to start enjoying unlimited invoice potential. Moesif sits between your APIs and the payment provider, enabling you to implement complex usage-based meters to suit your business.

Metering is one of the most common ways of monetizing API products. If your customers are using your API, metering will allow you to charge for that usage. Building on Moesif’s powerful analytics system you monitor usage statistics and then pass those metrics to Stripe. The billing provider then facilitates the collection of the funds.

Moesif’s role is to collect all the data you need in order to make this happen seamlessly. The platform can break that data down by user or by company, dependent on your needs, with billing based on a vast array of metrics. Because Moesif built its analytics capabilities first, then implemented billing meters on top, you have an outstanding level of granular detail on which to base your invoicing needs. It’s a simple solution to a complex problem, taking care of all the coding, integration, testing, and support that you need to implement a billing system.

Integration is key to enabling this simplicity. It can take days to make billing software work with other systems. Yet with Moesif + Stripe, you can be ready to bill customers for using your API in a few clicks. You just need to set up your products and prices in Stripe, using the system’s intuitive interface. Prices can be set to recur, with monthly billing periods and metered usage. You can also add descriptions to your prices, for smoother ongoing usage.

This rapid implementation process is important for small businesses, which often need to control costs tightly and maximize efficiency when it comes to using resources – including staff time. Instead of billing software posing a major engineering headache, it becomes a matter of routine.

Implementing this kind of billing software puts your API business in a strong position to get paid on time. Customers’ bills are based on accurate usage data, which they can monitor throughout the billing period courtesy of Moesif’s embedded dashboards. This minimizes queries at invoice time, meaning fewer delays to payment. It also means less staff time spent dealing with billing queries – another win when your API-first small business is watching every cent.

Automated, behavior-based emails add to the chances of you getting paid in a timely fashion. They allow you to take a proactive approach to ensuring your customers are kept up to date with their usage and reminded of when their bills are due (among other things).

When we consider that 52% of small businesses experience late payments, it’s clear to see why it’s so important that the right choice of billing software makes raising an invoice simple.

Choose the Right Invoicing and Billing Software

When you’ve poured your time, skill, and energy into creating API products and growing your business, the last thing you need is your invoicing software solution turning into a drain on your resources and enthusiasm. Why not reach out to Moesif to discuss how our billing solution could help?

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API as a Product , Usage-based Pricing

Larry Ebringer

Head of Marketing at Moesif. Previously, founded fortesque and CMO at InSpeed Networks

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