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Top 10 Billing Challenges for Web Hosting Businesses

By Lia / November 6th, 2019

Your billing system is the heart of your business. It controls your cash flow - the lifeblood of your business - and helps ensure funds and payments are coming in on time to sustain your business' growth and day-to-day operation. In our latest blog, we explore the top 10 challenges facing web hosting companies when it comes to billing, and how WHMCS helps to overcome these challenges to help you avoid revenue leakages and keep you on top of your cash flow.
Challenge 1: Getting paid on time
Whether you're a small or big business, getting paid on time is a challenge many businesses face. Delays in payments can negatively impact your operations, especially for companies in the early growth stage that heavily depend on cash flow from day-to-day.

Making it easier and quicker for your customers to pay is the first step to get funds coming in on time. From delivering invoices ahead of time, sending follow-up reminders, and making paying fast, easy and convenient - WHMCS offers your customers many ways to pay to help ensure they don't miss any payments.

Most importantly, billing should be automated and running smoothly in the background. With WHMCS, you can concentrate on what's important, and let WHMCS take care of the billing for you.
Challenge 2: Disconnected/Separate Systems
Having to connect a shopping cart to your payment processor and then to a CRM/billing system and server manager is no easy task, not to mention time-consuming and difficult to maintain. A fully integrated system with a team managing and supporting it helps ensure you have a reliable system that keeps on working and runs smoothly.

With WHMCS, everything is integrated - from client area, to shopping cart, to billing and provisioning! Having your billing natively integrated to your e-commmerce platform and frontend systems avoids data duplication, syncing issues, and helps ensure that things run smoothly. It also has other advantages such as helping increase staff productivity and making it easier to accomplish product and billing changes.
Challenge 3: Charging for Tax and VAT
Taxes are part of most businesses. Whether it's a local state or region based tax, country-based tax such as VAT, or more complex taxes, it's important that your billing system can accurately charge and record taxes for you.

With WHMCS, full Sales Tax and VAT support is available out of the box with support for both state and country based taxes, up to 2 levels of taxes, including compound tax support, ability to control on a per-product basis when taxes should be applied, and reporting tools to help you stay on top of the taxes you collect.
Challenge 4: Fraudulent Orders and Transactions
Online security and fraud continue to be one of the biggest challenges facing business owners. Across many industries, fraudulent orders represent a huge challenge for online businesses.

Therefore it's important that your billing solution can help detect and identify fraudulent orders and transactions before they even occur, and with WHMCS, native integration with tools such as MaxMind and FraudLabs Pro help identify bad actors and suspicious activity before payment is even collected, helping you to reduce time and money lost to fraudsters.
Challenge 5: Upsells and Add-on Products
Web hosting continues to become increasingly more competitive, and more and more web hosts are looking to the offering of additional add-ons and related services to create additional revenue streams. Things such as SSL certificates, website builder and website security. So you need a billing solution that's flexible enough to allow you to offer these add-on items, both at the initial time of order as well as later on during the client lifecycle.

With WHMCS, there is full support for add-on items, with flexible billing options, built-in promotions and upsells and fully automated provisioning, it's never been easier to open up additional revenue streams and offer your customers a more complete web solution.
Challenge 6: Offering customers local payment options
You know your customers, and you know the payment methods that matter to them. It's important you give customers multiple ways to pay and payment methods that they find convenient - it's no longer sufficient to just accept credit cards. You need to be offering alternatives such as direct debit and local payment options.

With WHMCS, there is built-in support for over 75 different payment gateways and merchant processors, with many more available via the WHMCS Marketplace. It's easy to setup and offer multiple payment options, and the team at WHMCS takes care of ensuring everything stays connected and working.
Challenge 7: Multiple currencies
Customers like to pay in their local currency. It's a fact that allowing customers to see prices in their local currency prior to checkout increases conversion rate, and so being able to offer your products and services under multiple currencies can be super important for international businesses.

With WHMCS, there's full multi-currency support, allowing you to offer your products and services in as many different currencies as you wish, and with options to set fixed price amounts in each currency you offer, or have prices automatically updated each day using the latest exchange rates. The choice is yours.
Challenge 8: Upgrades
Customers' needs change, and hopefully, as their needs grow, that means they will want to upgrade their package with you. When this point comes, it's important that your billing system makes it easy and convenient for the customer, so that you don't lose them.

With WHMCS, upgrades are fully automated. Customers can review upgrade options at any time from the client area, see a prorata difference calculation of how much the upgrade will cost, and order and make payment, all without ever contacting you. And what's more, as soon as the customer pays for the upgrade, the necessary changes will be made on the web server instantly and automatically. Now it doesn't get better than that!
Challenge 9: Pro-rata Billing
Often times, web hosting involves reselling the products and services of others. Billing terms from 3rd party vendors can vary a lot, and sometimes it's important to ensure you are paid by your customers before you have to pay your vendors. This is just one example of where pro-rata billing can be useful.

With WHMCS, support for pro-rata billing means you can have customers billed on a consistent day of the month, regardless of which day of the month they actually signup. Plus with WHMCS pro-rata billing, you get functionality where you can opt to charge for the first month + any remaining days in the current month in order to avoid small transactions that end up costing you as much in fees as you collect from the payment!
Challenge 10: Reporting and analytics
Your billing system should give you clear and accurate insights into the performance of your business, both as far as revenue you are collecting, as well as metrics such as new signups, churn and more. Without it, you're operating in the dark.

With WHMCS, you have a wealth of reports and knowledge at your fingertips. The WHMCS Admin Dashboard gives you a complete overview of your business, giving you important information at a glance every time you login, and if you need deeper insights, the Reports tools in WHMCS give you access to data, reports and charts that give you detailed insights into how your business is performing.

Choosing the right billing system is a vital decision for any business, and whatever system you choose should be helping you address these common challenges facing web hosting businesses today.

A billing system is responsible for much more than just billing alone, so next time you're looking at billing provider options, consider if the solution can really help your business thrive and grow, and set you up for long term success.

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