Accounting Systems vs Billing Systems: What’s the difference for Cloud Solution Providers?

As a Microsoft Partner and CSP, a requirement is to have billing automation and accounting systems in place to keep a record of transactions and send out invoices. While the line between the two different systems has blurred in recent years, billing automation and accounting systems still serve two different purposes and require a software decision.

Today, we’ll review the differences between billing automation and account systems in order to help cloud businesses build efficiency.

The Differences Between Accounting And Billing Systems 

 Accounting Systems

 An accounting system like Quickbooks, NetSuite, Xero, or Freshbooks, is meant to document and classify all of a business’s financial transactions. It is most commonly used to show the following data:

  • Money that comes in and goes out of the business
  • Total revenue
  • Total profit Company budgets and expenses
  • Accounts payable and receivable

Most accounting systems allow users to create manual invoices, which can handle the needs of the typical smaller business. However, a cloud service provider bases its billing and invoicing on more complex information such as customer provisioning, pro-ration, license tiers, and discounts.

While this information can be manually compiled, doing so consumes significant time that could be better spent elsewhere in your business. That’s where a billing automation system comes in.

Billing Systems

A billing system automates much of the manual work required to create an accurate invoice. Billing systems typically track the following:

  • Actual product/service usage 
  • Client provisioning 
  • Discounts 
  • Payment Plans 
  • Subscription tiers 
  • Customized services and pricing 
  • Tax levies
  • Billing automation systems then automatically generate customer invoices, either directly or through integration with an accounting system. This process delivers a more efficient way of invoicing customers. 

Why CSPs Should Use An Automated Billing System?
  • Automated billing systems like Work 365 help CSPs send and track more accurate invoices to they get paid more quickly with less effort. When integrated with an accounting system, Work 365 can help businesses: 
  • Streamline processes by unifying all data collection and tracking into a fully integrated front to back system. 
  • Save time by allowing the creation of things like payment plans, auto-pay services, tax calculations, and automated invoicing and payment reminders that are action triggered and not manual. 
  • Offer better service self-service portals allow customers to view their balance, understand their charges, and pay on their own. This lets your business focus its resources on improving support rather than reconciling accounts 
  • Make fewer mistakes in automated services decrease manual actions that lead to errors.

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