Narrator: Hi, thanks for tuning in. We’re here to talk about some of Stripe’s solutions for subscription-based B2B SaaS companies. With Stripe, you can unify payments, billing, and revenue reporting to capture more revenue, save on costs, and close the books faster. The SaaS subscription business model is surprisingly hard to manage.
A SaaS company might need to support tiered plans, usage-based pricing, or a mix of recurring and one-off charges. They could have one pricing model for their self-serve signup flow and another that could include custom pricing for larger customers. The list goes on.
Most SaaS companies build their own homegrown billing system, which takes time and resources to maintain, and diverts the developers away from working on their core product. Or they integrate a third-party billing software provider, which has to cross integrate with all their other systems. Both approaches can be overly complicated and expensive. A better option is to unify payments, billing, and revenue reporting with a single provider in order to capture more revenue, save on costs, and close the books faster. So let’s see how Stripe can help by checking out our demo company, Cloudly, a SaaS app for project management.
Cloudly’s pricing model is per seat, which means they charge for every person that has access to the app. First, they have to choose a plan based on the features they would want. Cloudly uses Stripe’s Payment Element for checkout. It’s a pre-built, embeddable UI component that collects the customer’s payment method details and provides real-time validation.
That means fewer payment failures and more successful purchases. Great. We’ve purchased the plan and now we’re in our Cloudly account. Let’s invite some team members to join us. In this case, we’re going to add more seats than our plan allows so Cloudly prompts us to upgrade. How do we do that? Just go to Manage Billing.
This is actually a Stripe-hosted page called the Billing customer portal. It allows Cloudly’s customers to directly manage their subscriptions and do things like upgrade, downgrade, cancel, and change their payment method details. Both recurring subscriptions and one-time invoices show up here. With Stripe, Cloudly doesn’t have to build all of that themselves. It just customizes the portal and checks it off the list.
Of course, sometimes subscription charges fail, which can lead to a subscription lapsing even if the end customer didn’t intend to cancel. Maybe the card details have changed or the subscription got flagged by the network as fraud. Luckily, Stripe can help. Smart Retries uses machine-learning algorithms trained on data from across the Stripe network to retry the payment at an optimal time, turning failed payments into successful ones and would-be churners into healthy subscribers.
On average, Stripe has been able to successfully recover 38% of charges that fail on the first attempt, which has a huge revenue impact for Stripe businesses like Cloudly. Okay, that covers subscriptions. But what if Cloudly needs to charge one of its customers for a professional services engagement or a large custom contract? Well, using Stripe’s tools, they can create and send an invoice in minutes with no code required or they can integrate with our invoicing API.
Either way, Cloudly can use advanced features to automate invoice collection and reconciliation. And just like all our payments interfaces, Stripe invoices are conversion optimized. Seventy percent of them are paid within 24 hours. Of course, billing is only one piece of the puzzle. Stripe also offers revenue recognition reporting built into the dashboard, which helps automate the accounting process for SaaS businesses. Stripe Revenue Recognition helps recurring businesses like Cloudly prepare accurate financial statements and gain a complete view of their business.
Since the transactions and billing terms are already within Stripe, Revenue Recognition can handle even the most complex scenarios like upgrades, downgrades, prorations, refunds, and disputes. Plus, Stripe offers a solution for sales tax, VAT, and GST that works in over 40 countries. Stripe Tax is built into Stripe Billing and Payments so businesses like Cloudly can monitor where they need to collect tax, collect the right amount of tax in each transaction, and get reports to easily file and remit the taxes. Stripe Tax helps reduce the headache of sales tax, VAT, and GST for all Stripe businesses.
There you go. Stripe’s tools help companies like Cloudly hand off the complexity of building and running a SaaS business and allow them to focus on delivering software their customers will love. We have solutions for other business models too, like SaaS platforms, ecommerce businesses, and multi-sided marketplaces. I hope you check them out.
Visit stripe.com to learn more. And hey, thanks for watching.
