Recurring Billing, the Next Inevitable Big Wave to Consume the Indian Businesses Date:   Wednesday , March 23, 2016 Headquartered in Dallas, BluSynergy provides subscription billing and payment services which free the users from the hassles and complexities associated with installing, managing and securely operating the system in an organizational setup. The Indian economy is undergoing a big change in the way consumers/companies interact with businesses. The internet is driving some of these behaviors and convenience is at the heart of some of the changes. New businesses/models are springing up, some of which were unheard of before, or some of which are an online version of the older business models. Regardless of the business model, during the course of any discussion on the financial health of a company, the topic inevitably goes to the revenue number (or top line) and the bottom line (net profit). While operational efficiencies drive the bottom line figure, the top line is determined by the kind of pricing models utilize. In the context of this article, we will highlight two aspects on the revenue side of a business - billing as a whole and recurring billing as a revenue model. Billing includes the entire process of calculating the amount to be billed, presentment of the bill to the customer, collection of the amount outstanding from the customer, ensuring that the appropriate customer account is credited with the amount collected and reconciliation. The following are the types of transactions/billings: One Time: This is the simplest type of transaction where a customer makes a one-time payment to a business in return for a product or service and both parties don\'t have to worry anymore about the transaction once this is complete. Recurring: These are billing transactions that happen at a fixed frequency - weekly, monthly, quarterly, and so on. These are again of different types - ones that have a fixed fee and those that have a variable component. Benefits of recurring billing to companies: The benefits of a recurring business are tremendous and companies need to realize the value of predictable revenue streams. A business that has a 75 percent of recurring revenue on a Rs.100 crore turnover has a predictable revenue of Rs.75 crore the next year (minus a small churn). But as a company with a Rs.100 crore revenue of one time business needs to make sure that the revenue book has a healthy pipeline to ensure maintenance of those numbers as well as provision for some growth Year-on-Year. Benefits of recurring billing to consumers: Consumers of a particular product get the benefit of having to pay for the product in \'installments\' or \'usage\' instead of having to pay for the product up front. In addition, the consumer feels like he/she doesn\'t have to pay for the whole product/service upfront - just in case they do not like/need the product in the long term. Recurring/subscription billing is quickly moving from the realm of consumer facing businesses (B2C) to B2B, as corporate companies also benefit from converting a capital expenditure to an operational expense. This change is happening in all types of industries including the traditional motor to telecommunications and technology companies. In India today, the kind of businesses that would be early adopters of recurring billing models are not easily predicted, and it takes courage on the part of companies to move from big ticket sales to a recurring model that involves smaller collections (annuity returns). Technology companies like most startups are typically quicker to adopt to the recurring billing models - both for themselves as well as for their customers. However, even traditional organizations like NGO\'s, whose existence depends on collections (donations), are moving to a recurring collection model instead of expecting to collect donations in installments - each time proving themselves to their donors of their performance. With increasing school fees, educational institutions are moving towards accepting fees on a monthly basis to reduce the burden on working parents. While recurring billing is definitely a great way to go forward, and the kind of organizations that can use it are virtually limitless, businesses need to do a reality check and ensure that they have the right mindset and more importantly, the right tools to enable the recurring revenue business model. There is also the constant threat of a competitor taking away the business at the end of a monthly period. So as long as companies have a superior product, and more importantly, provide a superior value proposition to their customers, it is a winning concept whose time has come. Companies need to believe in the concept of a recurring relationship with the customer.