SaaS invoicing: managing subscriptions and recurring payments
Introduction
SaaS businesses operate differently from traditional commerce. No one-off sales, but monthly or annual subscriptions that generate recurring revenue. This particularity completely transforms invoicing management.
Managing recurring payments involves automating invoice creation, tracking renewals, processing upgrades and downgrades, and reducing churn rate. Without a suitable system, you waste time on repetitive tasks and risk errors that impact your cash flow.
SaaS invoicing also raises specific questions: how do you invoice a free trial that converts to a paid subscription? How do you manage Swiss VAT on digital services? Which tools should you use to automate the process whilst remaining compliant?
This guide details subscription models suited to SaaS, the steps to automate your recurring invoicing, and the essential features for tracking your customers. With properly configured recurring invoices, you save time and secure your monthly revenue.
📌 Summary (TL;DR)
SaaS invoicing requires tools adapted to recurring payments and complex customer lifecycles. Automating monthly or annual subscriptions, managing upgrades and downgrades, and rigorous tracking of renewals reduce churn and secure your cash flow.
In Switzerland, VAT compliance and the use of features such as automatic recurring invoices considerably simplify administrative management for SaaS businesses.
📚 Table of contents
The specifics of SaaS invoicing
SaaS invoicing differs radically from traditional invoicing. Instead of one-off transactions, you manage recurring payments that renew automatically each month or year.
The challenges are specific: you must calculate your MRR (Monthly Recurring Revenue) and ARR (Annual Recurring Revenue), track churn rate (customers who leave), manage upgrades and downgrades mid-period, and apply proration when plans change.
Free trials also complicate matters. You must orchestrate the transition to paid subscription at the right time, without friction for the customer. Revenue predictability is a major advantage of the SaaS model, but it requires rigorous invoicing management.
Different SaaS subscription models
Several subscription models are available to SaaS businesses, each with its advantages.
Monthly or annual subscription remains the most common model. Simple to understand, it offers a fixed price per period. Annual improves cash flow and reduces churn.
Freemium offers a limited free version and paid plans. Ideal for acquisition, but complex to balance between free value and incentive to pay.
Pay-as-you-go charges according to actual usage (API calls, storage). Flexible for the customer, but less predictable revenue.
Per-user pricing (per-seat) grows naturally with the client's team. Feature-based pricing offers different tiers according to activated features.
BePaid uses a hybrid model: limited free version and Premium at 20 CHF/month. Discover our recurring invoices to automate your subscriptions.
Monthly vs annual: impact on cash flow
The choice between monthly and annual invoicing directly influences your cash flow.
Annual subscription generates immediate cash. You collect 12 months upfront, which secures your cash flow and finances your growth. The customer commits for a longer period, reducing your churn.
To encourage annual commitment, offer an attractive discount: 2 months free (like BePaid: 200 CHF/year instead of 240 CHF) or 15-20% discount.
Monthly subscription reduces the barrier to entry. More psychologically accessible, it facilitates acquisition of new customers. But it increases the risk of cancellation and complicates revenue forecasting.
Most SaaS offer both options, letting the customer choose according to their preference.
Hybrid models and customisation options
Hybrid models combine a base subscription and usage-based billing. For example: 50 CHF/month + 0.10 CHF per transaction beyond 100.
This approach offers predictability (fixed base) whilst adapting to customer growth (variable according to usage). It particularly suits SaaS with variable consumption: API, storage, email sends.
Add-ons allow you to customise the offer without multiplying pricing plans. A customer can add specific features (priority support, advanced integrations) to their base plan.
This flexibility improves customer satisfaction and increases your average revenue per user (ARPU). Invoicing complexity increases, hence the importance of an automated system to manage these variations.
Automating recurring invoicing
Automating recurring invoicing is essential for any SaaS. Creating and sending dozens or hundreds of invoices manually each month is impossible at scale.
An automated system generates invoices according to the defined frequency (monthly, quarterly, annual), sends them automatically by email, and maintains compliant sequential numbering. You eliminate human errors and save hours each month.
Predictability improves: you know exactly which invoices will be issued and when. Your team focuses on growth rather than administration.
BePaid offers automatic recurring invoices compliant with Swiss standards. The system manages the creation, sending and tracking of your subscriptions. This automation also improves your customer relationships by ensuring regular and reliable communication.
Managing customer lifecycles
A SaaS customer's journey goes through several stages, each with its implications for invoicing.
From the initial free trial to possible account suspension, you must manage smooth transitions. Each status change triggers specific actions: creation of a first invoice, price adjustment, application of credits, or service suspension.
Rigorous management of these cycles improves customer experience and reduces friction. Transparency is essential: the customer must always understand what they're paying and why.
The three critical moments are conversion after free trial, mid-period plan changes, and management of suspended accounts.
Free trials and onboarding
The transition from free trial to paid subscription is a delicate moment. Communicate clearly the trial end date and the amount that will be charged.
Send a reminder 3-5 days before the trial ends. Explain what will happen: automatic payment, first invoice, continued access to the service.
The first invoice must be issued on the conversion day, with a clear payment date. Some SaaS charge immediately, others allow 7-14 days' grace.
Facilitate the process: bank card registration during trial, simple confirmation, immediate access to premium features. The less friction, the better your conversion rate.
Upgrades and downgrades
When a customer changes plan mid-period, proration ensures fair billing.
For an upgrade (moving to a higher plan), calculate the remaining amount of the current plan and the prorated cost of the new plan until the next renewal date. The customer pays the difference immediately.
Example: a customer on 50 CHF/month moves to the 100 CHF/month plan mid-period. They've already paid 50 CHF. You invoice (100-50) × 0.5 = 25 CHF additional.
For a downgrade, apply a credit on the next invoice rather than a refund. Communicate these adjustments clearly to maintain trust.
Suspension and reactivation
An account may be suspended for non-payment after several reminders. Define a clear policy: suspension after 7-14 days' delay, with prior warning.
During suspension, service access is blocked but data is retained. Communicate the reactivation conditions: payment of overdue invoices, possible reactivation fees.
Reactivation must be simple once payment is made. Restore access quickly and confirm by email. Avoid charging for the suspension period, unless your contract explicitly provides for it.
Tracking payments and reducing churn
Payment tracking is crucial for a SaaS's financial health. A high payment failure rate directly impacts your MRR and increases involuntary churn.
Monitor three indicators: on-time payment rate, payment failure rate (expired card, insufficient funds), and average payment delay.
To reduce failures, send automatic reminders 3-5 days before the due date. Remind the amount, the payment date, and invite to update payment methods if necessary.
After a failure, follow up immediately with a clear message and instructions to regularise. Offer several automatic payment retry attempts (at D+2, D+5, D+7).
Facilitate bank card updates via a secure link. This automation improves your customer relationships by avoiding service interruptions.
Compliance and VAT for SaaS in Switzerland
SaaS established in Switzerland must comply with legal invoicing obligations.
Your invoices must include: unique sequential number, issue date, complete identification of your business (company name, address, UID number), customer identification, detailed description of services, amount excluding VAT, VAT rate and amount, amount including VAT, and QR-code for payment.
Regarding VAT, SaaS services are subject to the standard rate of 8.1% in Switzerland. If your turnover exceeds 100,000 CHF, you must register for VAT.
For international customers, the destination principle applies. B2B sales outside Switzerland are generally exempt (reverse charge). B2C sales follow the customer's country rules.
BePaid automatically generates compliant invoices with QR-codes and Swiss VAT management, ensuring you meet all legal obligations.
Essential tools and features
A SaaS invoicing software must offer specific features to effectively manage subscriptions.
Automatic recurring invoices are the foundation. The system must create and send invoices according to the defined frequency, without manual intervention.
Multi-currency management is essential for international SaaS. Invoice in CHF, EUR, USD according to the market.
MRR/ARR dashboard gives you a clear view of your recurring revenue and its evolution. Track your growth in real time.
Accounting exports facilitate data transmission to your fiduciary. Standard format, compatible with Swiss accounting software.
Bank reconciliation automates the matching between invoices and payments received.
Customer management with history centralises all information: current subscription, past invoices, payments, communications.
BePaid offers all these features with automatic recurring invoices from 20 CHF/month. Check our pricing and discover how to choose your invoicing software properly.
Practical examples of SaaS invoicing
Three concrete scenarios illustrate SaaS invoicing management.
Case 1: B2B SaaS with upgrade
Business customer with monthly subscription at 99 CHF excluding VAT (107.02 CHF including VAT at 8.1%). On the 15th of the month, they move to the 199 CHF plan. Proration calculation: (199-99) × 0.5 = 50 CHF excluding VAT to invoice immediately. From the following month, monthly invoicing of 199 CHF excluding VAT.
Case 2: Freemium to annual Premium
User on free version moves to annual Premium plan at 500 CHF excluding VAT (540.50 CHF including VAT). Immediate invoicing of the annual amount. Set up of an annual recurring invoice for automatic renewal in 12 months. Saving of 100 CHF compared to monthly (12 × 50 CHF).
Case 3: Per-user invoicing
SaaS at 20 CHF excluding VAT per user/month. Customer with 5 users: 100 CHF excluding VAT/month. Addition of 2 users on the 10th of the month: immediate invoicing of 2 × 20 × 0.67 = 26.80 CHF excluding VAT for the remaining period. Following month: 7 × 20 = 140 CHF excluding VAT.
SaaS invoicing presents specific challenges that require a structured approach. Between managing recurring subscriptions, complex customer lifecycles and VAT compliance requirements in Switzerland, every detail counts to maintain healthy cash flow and reduce churn.
Automation quickly becomes essential as soon as you exceed a few customers. It eliminates manual errors, guarantees payment regularity and frees up time to focus on your product's growth. Essential features include automatic recurring invoicing, flexible management of subscription changes and precise payment tracking.
BePaid simplifies this complexity with its automatic recurring invoices, compliant with Swiss standards and including mandatory QR-codes. Create your subscription templates, automate your invoicing cycles and track your payments in real time. Test for free with up to 10 invoices per month, no commitment.
