Why does aggregated billing exist?
It is common for a customer to have multiple subscriptions. These can be subscriptions to multiple services or subscriptions for different teams within the same customer. Creating a separate invoice for each purchase is redundant and often leads to spam. Aggregated billing consolidates all these individual invoices into a single invoice that can be sent to the customer.
To avoid wasting time repeating the same tasks, performing unnecessary manual work, and experiencing customer confusion that could result in financial losses, businesses use aggregated billing as a smart and hassle-free invoicing method.
How does aggregated billing work?
In a traditional billing system, an invoice is created for:
- each purchase/subscription made by the customer, regardless of the period,
- each subscription renewal.
Each subscription is treated as a separate purchase.
With aggregated billing, a single invoice is generated per month per customer. It consolidates the renewal of all the customer’s subscriptions as well as any purchases or subscriptions made by the customer within the month.
For example, within a span of five days, Nicolas subscribes to three different monthly subscriptions of a product or service. At the end of the month, the provider generates a single invoice that combines all three subscriptions, allowing Nicolas to easily track his subscriptions, expenses, and, most importantly, make a single payment (reducing the likelihood of canceling multiple subscriptions).
Advantages of aggregated billing
- Improves the productivity of your accounting staff by reducing the time spent reconciling accounts.
- Reduces revenue losses due to lost invoices and payment delays – eliminate debtors or easily identify them.
- Brings order to your billing and payment cycles, enabling you to forecast and plan your revenues and expenses with much greater accuracy.