Building blocks for SaaS recurrent billing

As the number of customers of your SaaS business grows, so does the complexity of billing them. There are numerous solutions to help you solve your billing and payment challenges. Let's have a look at them. 

A SaaS business is (in most cases) a subscription business: customers subscribe to the SaaS service with a subscription on a monthly or yearly basis. While very convenient for the customers - they only pay for when they use your software and if they stop using it, they simply cancel - the SaaS business needs to keep track of which customer it needs to charge how much monthly. With only a few customers in portfolio, a simple excel sheet might do the trick, once you grow above a couple of dozen customers, this becomes a bookkeeping nightmare. And this is even without mentioning the issue of getting the money itself... 

Luckily, there are numerous solutions out there to help you solve your billing and payment challenges. Let’s look at the moving pieces. 

To automate your invoicing and payment processes, you will need to integrate your SaaS service with three major components:

  • a billing engine
  • a payment gateway
  • a merchant account 

A SaaS billing engine

A SaaS billing engine is nothing more (and nothing less) than a piece of software that keeps track of which customer is on which SaaS plan. If your SaaS service is (partly) based on resource usage (e.g. storage, bandwidth, number of transactions, …), a billing engine needs to be fed that kind of information too. 

Most SaaS billing engines have a number of components (some sport all of them, others only some parts):

  • Plan administration: this component allows you to define SaaS plans - this is the section where you give information such as a single user plan for 9,99 euros per month, a small business plan for 25 euros a month that includes this and that, and an enterprise plan of 49 euros that offers you many extras. Additionally, you can configure things like coupons, model discounts for customers subscribing for a longer period in time, etc. 
  • Usage tracking: this is the central part of a SaaS billing engine; here the SaaS billing engine keeps track of which individual customer is on which plan. Typically, your SaaS application will integrate, via an API, with the SaaS billing engine, to tell the engine when a new customer subscribes to your service, how much of your service he is using, etc. In short, via APIs you will feed the billing engine all data it needs to calculate the monthly invoice for each customer.
  • Reporting: most billing engines offer reporting that will allow you to follow up on your customer's payments.
  • Interfacing with payment gateways: having your invoices automated is good, automatically collecting the actual money with each customer monthly is better. That is why many SaaS billing engines will interface with, or act as, a payment gateway and automatically charge customers' credit cards based on their invoice.  

A payment gateway

A payment gateway is the online equivalent of a physical point-of-sales terminal. Payment gateways securely transfer sensitive data such as credit card numbers between a customer and the payment processor (e.g. a bank) (more background on payment gateways at Important to know in the context of a recurring SaaS business, is that some payment gateways offer "secure vault"-like functionality to securely store sensitive data such as credit card number, relieving you, the SaaS business, from being compliant with the Payment Card Industry Data Security Standards. 

A Merchant account

You will need a merchant account if you want to receive money through online payments. 

What to look for when choosing a payment solution?

A couple of things to keep in mind when choosing the right payment solution for your SaaS: 

  • Cost: payment platforms are typically free to use, as they work commission based, i.e. they take a small percentage on the actual transactions. Pricing here varies a lot between the different vendors. Volume discounts are typically offered too. It is important that you do your homework here: do you expect to deal with large numbers of relatively small amounts or rather fewer, but larger amounts?
  • Ease of integration: some vendors, like, are API first: their entire platform is driven by developer friendly APIs, that sport excellent documentation, which will make integration easier.
  • What roles does the payment solution play: some payment solutions have the billing engine, the payment gateway and the merchant account all in one, for others, you need to provide your own merchant account, etc. Be aware of what building blocks are offered and what the cumulative cost per transaction is.
  • What payment options are supported: today, users might want to pay with credit card, some might prefer PayPal, others go for direct debit. This depends on the amounts you charge: enterprise customers might prefer traditional (large) invoices over credit cards, the geographical locations (in some regions, direct debit is popular), etc. Choose a provider that offers the payment methods YOUR customer prefers.
  • Payout period: usually, there is a delay between the moment a customer is actually charged and thus money is taken from his account, and the moment that money, minus the commission of the payment provider, shows up on your bank account. Some providers have a seven day rolling payout cycle, others are faster or slower.
  • Do you need support for mobile payments? Some payment platforms integrate with the App Store or the Play store, others don’t. Again, this highly depends on your products and services.
  • Invoicing and taxes: next to billing your customers, you will most likely have to provide them with an invoice as well. Some billing providers can generate and even send invoices themselves, others rely on you doing that. The same for taxes: some providers implement the tax and VAT regulations, other leave this to the user, so again, do some research yourself before you enroll with a provider. 


Choosing a billing solution for your SaaS services requires you to do some research, to look for the best solution for your billing needs. The technical side of things is probably the easiest, as most providers offer developer friendly APIs. 

How do you choose the right payment method and provider for your SaaS? On 15 November, Sirris will organise the SaaS CTO session 'Recurring payments for SaaS apps'. In this webinar, Dominique Adriansens, founder of Twikey, and Nick Boucart (Sirris) will offer you practical advice on what to take into account when choosing a payment solution for your SaaS. Interested in our SaaS CTO session? You can find all further information in our agenda