How to pick a SaaS billing service that supports credits

The right SaaS billing service is crucial — especially when credits are your currency of choice and there’s an AI element to your solution. 

This guide will equip you with the knowledge to make this critical decision and propel your business to sustainable growth.

You'll learn:

• The advantages of usage-based billing for B2B SaaS, particularly in AI
• The pivotal role of credits in enhancing billing flexibility and customer experience
• Key factors to consider when choosing a SaaS billing platform, from usability to security
• How Orb can improve your billing process with its robust credit support and advanced features

Let's start by discussing why SaaS businesses are leaning towards usage-based billing.

Why B2B SaaS companies prefer usage-based billing

In the B2B SaaS industry, particularly in fields like AI, traditional subscription models are often too rigid to capture the true value proposition. 

Enter usage/metered-based billing. This is a pricing strategy that charges customers based on their actual consumption of specific resources. This approach is gaining traction, especially with AI companies, because it aligns costs with value. 

The role of credits in usage-based billing

To make usage-based billing even more seamless, many SaaS companies are turning to credits. Credits (also called tokens) act as a prepaid currency within the platform. Customers purchase a bundle upfront and then draw down on these credits as they consume resources.

An AI API provider might price each API call at a certain number of credits. A customer could then purchase a block of 10,000 credits, allowing them to make a corresponding number of API calls.

Example: An AI-powered chatbot assistant

Imagine developing a customer service chatbot that uses OpenAI’s API. That's money coming out of your pocket for every token used to interpret and reply to customer queries. 

A token is a chunk of text — roughly equivalent to about four characters, including spaces — so longer inputs or outputs require more tokens. For example, if 1,000 tokens cost $0.0015 for input and $0.002 for output, these charges may seem minimal at first.

Now, consider a scenario where a customer sends a 100-character query (about 25 tokens), and your chatbot replies with a 300-character response (about 75 tokens).

In this case, that interaction would use around 100 tokens, costing approximately $0.00015. While the price of this one interaction seems small, if your chatbot handles thousands of queries daily, the costs can add up quickly.

This type of pricing system means you’re always in a balancing act between remaining profitable while charging customers fairly. The solution is in SaaS billing software that can handle billing at a granular level. You want to make sure no decimal earnings or expenses fall through the fine mesh sieve. 

Other AI-powered SaaS businesses are billed for computing power and storage too, like AWS. 

Why do B2B SaaS companies choose usage-based billing?

The pay-as-you-go approach is a win-win. Customers only pay for what they need, fostering cost efficiency. Providers can capture revenue that reflects the true value their service delivers as usage scales.

This credit system brings an added layer of flexibility. It allows for bundling of different services or resources under a single credit system. That’s why the system helps with complex pricing structures. 

Advantages of SaaS billing platforms that support credits

A SaaS billing service with robust credit support can offer lots of advantages for scaling businesses. Let's dive into some of these key benefits:

• Simplified pricing for complex offerings: Convoluted pricing structures are no more. Credits allow you to bundle multiple services or resources under a single currency. 
  
  Credits are especially beneficial for AI companies or those with intricate product catalogs. It streamlines the billing process and it’s much clearer for customers to understand.

• Flexibility and experimentation: With credits, users can try out different features. They can also scale their usage up or down, and switch between services. All this can be done without renegotiating contracts or worrying about surprise overage fees. 
  
  If your SaaS solution allows customers to use credits for different tasks, you foster a culture of innovation. Product adoption becomes easier because credit can be allocated to what customers actually use. 

• Improved trials and onboarding: Credits provide a more engaging way to structure free trials. Instead of time-bound access, you can offer a set number of credits. You want to encourage users to actively explore your platform's value proposition.
  ‍
• Incentives and rewards made easy: With credits, you can effortlessly offer discounts, rewards, or refunds. Of course, you can do this without having to use credits, but a unified currency streamlines the process. 
  ‍
• Clear cost visibility: This means no billing surprises. Credits provide both you and your customers with a transparent view of usage and costs. Having this feature promotes trust and helps customers budget effectively.
  ‍
• Adaptability to market changes: Credit-based billing allows you to adjust pricing. You can also introduce new services without disrupting existing contracts. This agility is crucial for SaaS businesses navigating evolving market conditions.
  ‍
• Granular billing engines: Advanced SaaS billing platforms allow you to create billing engines with fine-grained credit support. 
  
  Having such a level of granularity means you can define credit values for specific actions, usage metrics, or time periods. The right billing platform should give you unparalleled control over your pricing strategy.

• Upsells and cross-sells: Credits make it easy to introduce new features or premium services. Customers can simply purchase additional credits to access these offerings. This client agency helps create a smooth upsell or cross-sell experience.

Remember, a well-implemented credit system can transform your SaaS billing engine into a powerful tool for growth. You can unlock these advantages by choosing a SaaS billing service that supports credit functionality. What to look out for? That’s what we’ll discuss next. 

7 things to consider when picking a SaaS billing service

Choosing the right SaaS billing service is key, especially if credits are your currency of choice.  Here are the critical factors to weigh when making your decision:

1. Usability

In SaaS billing, simplicity is a must. Seek out a platform that boasts a clean, intuitive design. It’s key to choose one that makes managing subscriptions, tracking credit usage, and generating invoices simple. 

Clear reporting and analytics should also be a priority. You need to easily access insights on credit consumption, revenue, and customer behavior. Clear insights help shed light on growth opportunities and allow you to address issues promptly. 

Lastly, offer customers a self-service portal. Preferably, one that lets them manage their subscriptions, view credit balances, and make payments. Self-service portals free up your support team to focus on higher-level tasks.

2. Pricing

Avoid hidden surprises lurking in the fine print. Opt for a provider with a clear pricing model, one that meticulously outlines all fees and charges. Be wary of opaque pricing structures that can lead to surprise costs down the line. These can throw a wrench in your financial planning. 

Scalability is equally important — your billing platform needs to grow alongside your business. It needs to accommodate growing transaction volumes and extra features without a dramatic increase in cost. 

Remember that it's vital to evaluate the overall value proposition. Consider the features offered, the level of support provided, and the platform's potential to fuel your revenue growth.

3. Ease of implementation

A smooth transition is crucial, so ensure the billing platform integrates with your existing tech stack. The integrations suite should include CRM, tax and accounting software, and payment gateways. This harmony prevents data silos and simplifies your billing operations, allowing you to focus on your core business. 

API and developer support are critical for businesses with specific requirements or workflows. These two elements help with customization and building custom integrations if needed.

A smooth onboarding process and training resources are key to a successful implementation too. Choose a provider that offers all-encompassing support to make sure your team can hit the ground running.

4. Integrations

Your billing platform should connect with a wide range of payment gateways. You’ll want to expand your reach so you can accept payments from customers globally and in their preferred currencies. 

Integration with your CRM and accounting software guarantees a harmonious flow of customer and financial information. Integrations like these eliminate manual data entry, help reduce errors, and provide a holistic view of your business. 

Depending on your specific needs, you might also want to integrate your billing platform with other business tools. Think marketing automation platforms, customer support systems, or analytics tools. Tools like these further enhance your workflow and unlock valuable insights.

5. Credit management capabilities

Your SaaS billing service should allow you to define credit values for specific actions, usage metrics, or time periods. You should have unparalleled control over your pricing strategy. 

A robust billing platform lets you tailor credits to your needs. It should also let you offer credit bundling and tiers to cater to different customer segments and encourage upgrades. 

Remember it should also let you define clear policies for credit expiration and rollover to prevent revenue leakage. This clear definition can also incentivize ongoing usage, as customers will want to make use of the credits they have left.

6. Reporting and analytics

Real-time usage tracking is paramount. Stay in the know by monitoring credit consumption as it happens. This 360-degree view helps you gain immediate insights into customer behavior, identify trends, and address any issues. Accurate revenue forecasting, fueled by your billing platform and historical data, is key for planning. 

Finally, customizable dashboards allow you to visualize the metrics that matter most to your business. These dashboards help you stay on top of your KPIs and make decisions backed by concrete data.

7. Security and compliance

Security and compliance are non-negotiable. Make sure your chosen SaaS billing service adheres to the Payment Card Industry Data Security Standard (PCI DSS) to protect your customers' credit card information. 

Look for features like data encryption, tokenization, and fraud detection tools. These features help mitigate risks and safeguard both your business and your customers. 

If you operate in regions subject to the General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA), ensure your billing platform complies with these regulations to avoid legal issues.

Next steps: Use Orb for your billing and credit implementation

Having explored the importance of a SaaS billing service that supports credits, it's time to move from strategy to action. You want to make sure your pricing captures value and also fosters customer trust. 

This is precisely where Orb excels.

Orb is a done-for-you billing platform. It's the bridge between your strategic vision and its practical execution. 

Orb is trusted by product leaders at companies like Perplexity and Vercel. We empower you to build a pricing engine that fuels your growth ambitions and resonates with market expectations.

Orb is the ideal billing service for credits

Orb is purpose-built to elevate your pricing strategy. It does so by handling the mechanics of billing and invoicing so you can focus on the bigger picture. 

It’s a flexible billing engine designed for hybrid and usage-based pricing, catering to both developers and finance teams. By ingesting product usage data at scale, Orb accelerates new product launches and equips you with detailed financial reporting.

Key advantages of Orb for credit-based billing:

• Prepaid commitments, perfected: Orb effortlessly models prepaid commitments. We allow customers to keep a balance in custom credit units or real-world currency.
  ‍
• Auditable ledger: Orb tracks all balance changes, including deductions, expirations, and credit purchases.
  ‍
• Flexible pricing structures: Orb accommodates diverse pricing models. We cover everything from simple per-request deductions to sophisticated contracts with average metrics.
  ‍
• Real-time balance management: Orb reliably tracks customer balances, even with high-volume usage events.
  ‍
• Robustness and adaptability: Orb handles late-arriving data, backdated actions, and usage amendments. These elements guarantee accuracy and flexibility in billing.
  ‍
• Proactive alerts: Orb sends timely notifications when customers approach usage thresholds. This feature enables you to drive upsells and renewals.

Orb empowers you to take control of your revenue engine. We help optimize your pricing, foster customer trust, and achieve steady growth through billing. 

Experience Orb firsthand and schedule a free demo now.