Key Challenges Facing Software Subscriptions Collections

Software Technology Industry Debt Collectors

With the advent of the internet and technology, businesses can easily find a subscription service for almost anything that they need, ranging from accounting programs, crms to advertising platforms. Currently, a subscription service where businesses pay a weekly, monthly, quarterly, or even yearly subscription for products and services is attesting to be incredibly popular among both business owners and customers. In addition, the demand for subscription services is always on the rise due to the increase in the number of businesses providing SaaS (Software as a Service) as a subscription service.


Gone are the days of a one-time transaction with businesses as subscription services have taken over the mainstream industry with a storm. Today, many companies like Adobe and Salesforce offer subscription services as they assure a predictable and recurring revenue stream. Having said that, the management of subscription models is quite complicated. The software subscriptions utilized by businesses such as salesforce provide consumers with different functionality levels for multiple prices per seat, every month. Of course as subscriptions become the norm there will be challenges faced with scaling subscription-based business.

Increased Competition from other Providers


Unfortunately, even the best and most effective subscription service is unlikely to find itself without stiff competition. Generally, competition is inevitable, and questionably that’s a perfect thing. As the business experts suggest, ‘A challenging business environment forces business startups to be effectively focused on satisfying customer requirements alongside containing and lowering fees.’ With this however many businesses will try multiple subscription services to accomplish a similar task. Brand loyalty therefore does not carry the same weight it used to when there were fewer options meaning customer service and retention must be a focus to continually grow the business. If retention is not focused, the growth of the business will stagnate as new customers simply replace lost customers only at a higher acquisition cost. 

Incorporating the Present Technology through API to other Software is Hectic


Generally, there are multiple systems, technologies, and apps used when it comes to integrating business systems to new software service subscriptions. The leading problem many software providers face is integration, which remains hidden throughout the API development process. Developing API’s however can be an expensive endeavor resulting in increased overhead with the bringing in of additional developers. When developing API’s and integrations SaaS companies must take into account the following. 


  • The right understanding of the user needs.
  • Identify and research new technologies.
  • Design and create a new solution and meticulously test to ensure proper integration.
  • Assign sufficient time to research, development testing, as well as prototyping.


Another thing that you need to worry about when designing APIs is security. Ordinarily, data is one of the most valuable and crucial elements of any business. With this, there are always unauthorized users that want to steal this data from you. At present, security breaches are quite common, and almost all applications come with some type of susceptibility. All businesses want their data to be secure from these threats, making security the most important responsibility to all developers. Here are a few tips to put into consideration:

  • Enhance your software by looking beyond technology.
  • Always use modern programming languages when creating systems.
  • Embrace all the crucial activities to design a secure app.

Scaling Customer Service and Marketing Budgets


The subscription services tend to have countless users at any particular moment. This can be quite tricky to handle, considering all the needs of current customers. 


To effectively handle this software providers need to use a reliable subscription management software that categorizes accurately where in the sales process a user is as well as preceding transactions, they have had with the company. Additionally, the software needs to have the ability to track the present status for a client’s membership. Another thing to keep in mind is, with many clients registered to the services and products of a subscription-based business, manual invoicing becomes bothersome. Correspondingly, invoicing becomes a massive issue if you’ve clients on different subscription models, payment options, and add-ons.

How to Effectively Collect Payment for Subscriptions


When it comes to establishing a strong business, flawless cash flow management is vital. To make sure that you collect all the subscription payments on time, it is necessary to have clear and concise billing procedures. Even with a sound accounts receivable process there will be circumstances where payments are not made on time or billing methods fail. If initial outreaches were not successful  it would be advisable to involve the services of a collection agency.


Generally, collection agencies collect the fees on your behalf for a percentage of the total money collected. While there is a cost associated with outsourcing your collections. All things considered, the agencies typically have the knowledge and skills to effectively collect software subscription fees.