Strategy & Best Practices

Adaptive Invoicing: Don't Let Legacy Invoicing Methods Block Your Ability to Succeed in the Digital Economy

By Peush Patel / September 14, 2020

Organizations have a strong desire to launch new products and go to market with innovative pricing and packaging to offer a compelling value proposition to their customers. They need to be agile and adapt to constant change, whether that is competitive pressure, regulatory changes, market demand, or even brand revisions. They know that the change is a necessity for their business.

Adapting your billing to the demands of these constant changes is a complex undertaking. You need to ensure that your billing system can support the innovative commercial models that you need to drive success. The invoice may seem like the easiest part of that change, but again and again we see organizations that are challenged with the lack of access to make easy adaptations to their invoice. Legacy invoicing methods are still controlled by IT and require development and customization to support any and all updates/changes. In the digital economy, this is no longer sustainable.

Invoicing is an important customer interaction. It is a guaranteed touch point with your customer and your invoice represents you, your brand and the products and services you sell. Your ability to invoice accurately for all services (including first- and third-party products) either direct to the end customer or through alternate channels—such as a reseller or trusted advisor—is a prerequisite for success. A commerce transaction can involve four or more parties: A software company that provides the product; the organization that runs the marketplace where the transaction is conducted; the reseller or channel partner that facilitates the sale; and finally the end customer who buys the service. Given this, ensuring your invoicing reflects the correct brand and messaging, and simply comes from the correct merchant of record, can get complicated.

You must think through the end customer experience. With multiple parties involved in a single commerce transaction, who is the true “merchant of record,” and whose branding and what terms and conditions are reflected on the Invoice? An invoice is a time-stamped commercial document that records a transaction between a buyer and a seller. It itemizes different products / services along with their respective prices and specifies the terms and conditions of the sale that both the parties must abide by in good faith. Companies may want to send the invoice as a PDF attachment to the end customer or simply a link to the digital invoice. Another critical need of e-commerce is invoice accuracy. Accuracy and clarity on an invoice helps expedite collections and reduce chargebacks leading to a positive cash flow. Last but not the least, organizations have to deal with country-specific regulations and localization that require critical information to be reflected on the invoice.

All this put together, businesses today are in need of a flexible and a scalable invoicing solution that empowers them to generate Invoices that are flexible to meet all the above mentioned criteria without forcing them to invest in IT for building and adapting custom Invoices.

Adaptive Invoicing on the AppDirect Platform Delivers Agility with No Compromise

This is where “adaptive invoicing” comes in. Adaptive invoicing enables organizations to get invoices out right, on time, every time, with formats customized for specific use cases. It’s not a singular feature, but rather a rich set of capabilities that are conceived and built from the ground up that deliver a unique Invoicing experience to support multi-dimensional commerce on our platform. It enables AppDirect’s customers to adapt to the constant changes in the business environment and landscape.

Consider a situation where a particular organization sells their digital products through the marketplace ‘direct’ to the end customer. The invoices need to be branded to align with the marketplace and it’s the marketplace that is officially the merchant of record. Now imagine that it decides to sell those products through a reseller network. Typically, this would require a major IT project to customize and reformat the invoices to reflect this merchant-of record change.

With the AppDirect adaptive invoicing functionality, the organization can rapidly reformat its invoices without touching a single line of code. The owner of the marketplace can assign an administrator to designate themselves or their reseller partner as a merchant of record through a simple configuration. This will automatically brand the invoices to the reseller’s brand. In addition, resellers are able to set up pre-defined templates with different print formats. The AppDirect Invoice Builder feature delivers a delightful visual experience in building the custom invoice templates. As a part of this new experience, the new visually clean, intuitive, and unobstructed invoice pages are available to all AppDirect marketplaces.

But we will not stop here. In near future, we’ll continue to invest in adding more capabilities to adaptive invoicing. We’ll add features that will support assigning an invoice template by a “customer segment” to allow better and more granular control to generate the invoice format based on segments of customers. In addition, we’ll allow sending the invoice PDF as an email attachment with encryption and print promotional content on the PDF invoice.

Adaptive invoicing will be a big differentiator between AppDirect and our nearest competitors and it will add tremendous value to our customers. Learn more about the six key considerations for billing for subscription commerce.

Peush Patel is a Senior Director of Product Management at AppDirect.