As businesses all over the world rapidly move to a subscription model, accountants and bookkeepers need to find ways to support subscription services. When you are using Xero on it’s own this can get complicated, but luckily there is an easy solution.
How many subscriptions do you have? The average person subscribes to 9 streaming services (Deloitte 2021). When you add in internet and communications, utilities and software that number skyrockets. It’s no wonder that 70% of business leaders say subscription business models are the way of the future (Global Banking and Finance Review 2021).
There are a lot of articles telling us subscription services will soon be the norm when in reality - they are the norm already. Many people buy cars on a subscription to flatten the costs of ownership (it’s called a lease). And practically everything you see online or in store can be purchased on a subscription through buy-now-pay-later services like Afterpay and Zip.
So what does this mean for your business?
Well... If you use Xero, you’ll probably find the subscription billing functionality lacking. Xero is an incredibly easy to use accounting package that comes with great payroll, accounts payable and accounts receivable functionality, but struggles when it comes to subscription and usage billing. It simply isn’t equipped to handle:
- Recurring subscriptions
- Usage products (e.g. Voice, Internet, Utilities)
- Large customer bases
While you can set up automatic recurring invoices, the functionality only works if the products or services you are selling stay the same from month to month. If they change, there is manual work involved in updating the invoice amounts. You’ll still have to send the invoices manually, and also manually reconcile the accounts with your bank.
This gets old - fast and the reality is that more of your clients will want to move to subscription models in the future because it’s what their customers are asking for. So how can your business support complex subscription billing models without changing accounting providers?
That’s where Emersion comes in
Emersion can automate the entire subscription billing process, including collecting and calculating usage (useful for voice and internet services), generating and sending invoices, taking payments and following up with collections notifications.
We can support any business model (including wholesalers and francisers), any type of product and service. The best bit - any invoices or transactions in Emersion can be automatically synchronised to Xero, meaning you can still use Xero to manage your clients accounts and have us take care of their billing and service management.