Building a Versatile SaaS Revenue Infrastructure

Here, we take a look at and share our best practices, SaaS trends and tools, to help you create your business's versatile revenue infrastructure.

What Is a SaaS Revenue Infrastructure?

"Revenue infrastructure" is a term used to describe the systems, processes, and teams responsible for collecting payments. This infrastructure is necessary for customer acquisition and retention, making it possible to measure how your business is doing. 

A stable revenue infrastructure will allow you to make a profit by receiving payments from customers while remaining compliant with tax, payment, and data protection laws in all the locations where your business operates. It's important to think about this long-term because your infrastructure needs are likely to become more complex as your business scales.

What Makes a SaaS Revenue Infrastructure?

Let's explore the 4 elements that form the various parts of a typical revenue infrastructure:

1. Payment Processing

Payment processing is the core of your SaaS business' revenue infrastructure. Ask yourself: how can I make it as easy as possible for my customers to pay me for my product or service? 

Besides the technical aspects of choosing a suitable payment processor, paying close attention to the following points will go a long way towards successfully reaching your revenue goals:

Customer Experience

The customer experience (CX) — or the interactions your customers have with your business during the entire purchasing journey — is one of the fundamentals of business success.

You never want to lose a potential customer due to a poor impression of the payment processing experience you are offering. It's essential to constantly measure customer success in SaaS, and payments must always be as simple, quick, and efficient as possible.

Secure Payment Process

Providing your customers with a secure payment process will set their minds at ease and go a long way towards achieving customer satisfaction. Your clients need to know that their payment details are safe and encrypted and will never fall into the wrong hands. Make sure this is all correctly set up, and then clearly communicate it to your customers to build their confidence and create a positive working relationship.

2. SaaS Billing Automation

Since SaaS businesses often deal with complex billing processes, it's usually best to automate billing as much as possible. This will help avoid human errors and comfort your clients.

The best type of automated billing software companies should include the following elements:

Management of periodic and recurring charges

Tracking invoices and payments can become more difficult as you acquire more customers. An automated system will also mitigate any human error. This will enable you to run periodic and recurring charges, usage-based charges, and one-time charges, as well as send customized invoices when necessary.

Payment Management

Customers need to be notified if their credit card payments fail, their cards expire, or if there are outstanding payments or lapses. An automated billing system can handle all of these critical issues on your behalf so that nothing slips through the cracks. The e-invoicing benefits are plenty and worth considering. 

3. SaaS Management of Subscriptions

After acquiring customers, it’s important to focus on retaining them to promote sustainable business growth. From the moment a customer subscribes to your product right up until they decide to cancel their subscription, you should be working on keeping them from leaving you for a competitor.

From a business point of view, successfully managing and retaining your customers includes everything from dealing with custom pricing models, like usage-based billing, renewals, cancellations, refunds, and redeemed discounts to performance metrics, subscriptions, up or downgrades, free trials, and so much more.

Your customers, in turn, should have access to an easy-to-use portal to manage their subscriptions, billing details, and payments. Also, make sure they can easily choose their method and frequency of payment as this is often overlooked.

Many SaaS businesses collaborate with eCommerce partners offering subscription management software to ensure excellent customer subscription experiences. The software will track all the variables related to the fulfillment of subscriptions and revenue delivery in an intuitive and user-friendly manner.

4. SaaS Revenue Operations

Revenue operations are the business function that focuses on revenue, ensuring that the different teams in a business are on the same page. — e.g., You want your sales, marketing, and finance teams to work towards one common revenue goal. 

It's no longer just the finance or management team's job to maximize revenue. All teams in a business work to execute cross-functional initiatives such as market expansion and revenue-model changes. Having a revenue operations infrastructure in place is key to increasing revenue, so it makes sense that this is a top priority.

Revenue Predictability

Another essential business goal is creating "predictable revenue.” This term means your revenue stays consistently measurable monthly, quarterly and yearly, making it easier to plan your growth and scale your business accordingly. 

By tightly managing your sales funnel, you can create a framework that predicts how much revenue your business will bring in in the future, allowing you to correctly forecast and plan for growth.

Revenue Process

The revenue process runs from the point customers opt to buy your product until the revenue reflects fully in your business account. Because the customer experience is vital to your success, it's essential to check that every step of your revenue process is transparent, efficient, and frictionless.

Make sure there are no speed bumps along the way, which could lead to negative customer experiences and, potentially, lost sales.

Revenue Growth

"Revenue growth" refers to the increase in a business' sales from one set period to the next. This growth is usually expressed as a percentage and determines business trends that companies should closely monitor. 

According to Revenue Rocket, a healthy growth rate for businesses in the IT space should be no more than 45%. "Firms that outrun this target are likely not growing profitably," Revenue Rocket says. "They're probably borrowing from the past with accumulated cash on their balance sheet, or they're stealing from the future, sourcing funds from a credit facility or an investor. Neither scenario is good."

Revenue Visibility

"Revenue visibility" occurs when a business can predict its future revenue or sales figures. SaaS businesses should aim for high visibility, which means you're confident in your predictions. If there's high revenue visibility, the rest of the employees in your business will likely also feel secure in following the processes put into place.

Sales Tax and Financial Compliance

Sales tax scaling and general financial SaaS compliance can become a nightmare for SaaS business owners. The reality is that, as your SaaS or Software business grows, sales tax becomes more complicated, primarily if you operate across many different regions. 

Read our article Sales Tax 101 to ensure you're keeping this element of your business compliant. Then ask yourself: Are you adequately addressing all the relevant tax and compliance requirements throughout your revenue infrastructure?

Fraud Prevention

Fraud is a common issue for businesses that receive online payments. As such, SaaS businesses frequently encounter fraudulent practices, including account hijacking, payments with stolen credit card details, and disputes on legitimate transactions. 

To avoid these scenarios, ensure you have a reliable, secure payment gateway and payment processor in place. They will work as your partner and trusted advisor to help you navigate these scenarios, which will affect your revenue if not carefully managed.

Customer Support

At some point, your customers may get stuck and have questions about their orders, payments, or subscriptions. It's your job to make your support services as effective as possible for all things customer-related. 

Remember: a negative experience can have a domino effect on many other aspects of your SaaS business model, such as customer SaaS retention and loyalty.

Analytics and Reporting

As a business, you need easy access to reports and analytics related to your revenue so that you can make quick, data-based decisions and ensure SaaS spend optimization. Setting a centralized revenue infrastructure will simplify the reporting, analytics, and decision-making process.

The 4 Core Benefits of a Versatile SaaS Revenue Infrastructure

1. Flexibility

If your SaaS revenue structure is just a set of separate, rigid systems that don't work together, it's unlikely to be effective. Furthermore, changes could take ages to implement and integrate. However, if you have a robust and versatile revenue infrastructure stack, where the different parts all work smoothly together, you'll be able to adjust, adapt, and grow quickly.

2. Customer Retention

The easier the payment experience is for your customers, the more likely they will stay with your business and keep subscribing to your products. A good revenue infrastructure promotes consistent, quality customer experiences and practical support from start to finish. 

It should also be easy for your customers to upgrade their plans, helping increase your customer lifetime value (CLV) — a valuable metric to track that describes the revenue generated over an average customer's entire journey with your business. 

Remember that retaining customers costs less than acquiring new ones, so keep a sharp eye on your customer journey and experiences.

3. Easy Experimentation and Quicker Expansion

Changing, adapting, and experimenting are critical to growing and expanding your SaaS business. If your revenue infrastructure isn't flexible, there may well be areas that block this expansion. Many companies have built their revenue infrastructure up piece by piece so that each part is siloed. Different processes aren't linked and cannot work together, causing implementation changes to become incredibly tricky and time-consuming.

Get your revenue infrastructure to work seamlessly and transparently to allow easy experimentation and, ultimately, quicker expansion, as well as the very profitable possibility of SaaS startup funding. Try out a flexible pricing strategy and new subscription models without hassle and test new payment options. Launch new products and expand into new markets. These steps become more manageable with a solid yet flexible revenue infrastructure.

4. Complete Tax Compliance

Is your checkout system tax compliant according to all the different locations and jurisdictions you sell and operate? Are you registering, filing, and remitting tax everywhere you have customers in accordance with relevant tax laws? 

You can avoid tax headaches if you have a robust tax management system that integrates with your other revenue systems as part of your bigger revenue infrastructure. We cannot possibly overemphasize the importance of making sure you are compliant when it comes to taxes.

Where To Start With Revenue Infrastructure

Now we've illustrated the benefits of having a rock-solid revenue infrastructure, you can follow these 5 steps to set up your system:

1. Create a Revenue Delivery Strategy

The first step is to plan your revenue delivery strategy. Perhaps your current design is too simplistic or not integrated with your core goal in mind. Work out how your business will manage the systems, processes, and teams responsible for optimizing your revenue. 

Your strategy should pull checkout, payment, subscription management, and tax compliance together to bring you flexibility and scalability, guaranteeing success in your business growth.

2. Set Up a Revenue Infrastructure Team

Once you have a revenue delivery strategy, it's time to carefully plan who will take the lead and execute your plan. You may need a team whose job is to integrate and maintain the different systems that make up your revenue infrastructure. The more intentional you are about this as a business, the greater your chances of reaching your revenue goals and retaining your customers.

3. Tap Into Each Element of Revenue Infrastructure

Remember: each element of your revenue infrastructure is equally important — from payment processing to billing automation, subscription management, and revenue operation. Your business needs to have optimized the whole package for your customers to succeed. 

It's also essential to regularly check all of the steps one by one, ensuring your systems remain versatile and flexible.

4. Focus on Integrating Systems

Once you've spent time on each element of your business' revenue infrastructure, the final step is to evaluate the efficiency of your overall system. For example, do the processes work together without apparent friction? Is it easy to implement new business plans? Are your teams all working together to optimize your revenue?

5. Use an Experienced Revenue Delivery Partner

Finally, if you feel your revenue infrastructure is too complex, there's a simple solution: find an eCommerce partner with a comprehensive toolkit to help you manage your business. 

Managing subscriptions, payments, checkout, tax, and buyer support will be easy when you work with a Merchant of Record like PayPro Global,  giving you more time to spend on other critical business operations.