Fix revenue leakage: Stop losing money to billing errors and usage gaps
Software companies with complex pricing typically lose 2-3% of revenue to under-billing, and sometimes much more. m3ter ensures every bill is reliably accurate and complete.
What revenue leakage looks like in your business
Revenue leakage is about under-billing - fees which you’re entitled to don’t appear on invoices, and so they’re never collected. What it means for your business:
Lower revenues: if the charges were on invoices, you’d make 2-3% more revenue, and sometimes much more.
Suppressed profits: if this revenue was recovered there would be zero COGS and it would drop straight to the bottom line.
Misaligned incentives: if usage isn’t charged for, customer consumption is unconstrained.
Audit challenges: under-billing suggests a weak control environment, encouraging auditor scrutiny that costs you time and money.
Where revenue leakage happens (and why it’s hard to see)
Gaps in usage data
You can only charge for usage if you capture it AND make it available to billing processes. Companies have gaps if usage is not recorded at all, or is inaccessible to billing teams. A classic example is governance around usage allowances - if the billing team don’t have access to the usage, they’ll never charge overages.
Out-of-date pricing
Without an automated connection between the source of truth for pricing and the bill calculation mechanism, there is a risk of under-billing due to errors when pasting pricing across or (more commonly) because pricing isn’t updated after renewals.Â
Bill calculation errors
It’s challenging to maintain a resilient calculation mechanism that can accommodate the variety and complexity of pricing terms agreed by Sales. This is particularly the case in spreadsheet-based systems, and under-billing occurs due to errors or simplifications.
Customers on wrong plans
A lack of automation in business processes can mean customers are on the wrong pricing plans. A classic example is failure to convert a trial user to a paid plan after a set period of time or the depletion of an initial credit balance.
Plug the gaps with m3ter’s smart billing infrastructure
Flexible usage data platform
m3ter captures and stores ALL your usage data so it’s ready for billing.
- Fits flexibly into your architecture
- Low/no need for pre-processing
- Designed for scale - high volumes and velocity
- Enriched and attached to customers, meaning all usage can be accounted for
Automated connections to pricing source of truth
m3ter automates the connection between order capture and billing, ensuring that the right pricing is always used to calculate invoices. Â
- designed to connect easily with CRM, CPQ, ERP, billing, and other Q2C tools
- API-first, events-based architecture with pre-built object mappings
- native integrations for key systems such as Salesforce
Configure any pricing, calculate any bill
m3ter supports even the most advanced charging models, with automated error-free bill calculations:
- Define how you measure usageÂ
- Flexibly configure pricing and billing for complex scenarios such as prepayments, credit systems, multi-attribute rating, and parent/child hierarchies.Â
- Handle high levels of unique pricing plans.
Ready to upgrade your monetization stack?
Modernise your revenue stack and eliminate under-billing.
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Frequently asked questions
How big can revenue leakage be?
Software companies with complex pricing typically lose 2-3% of revenue to under-billing, and sometimes much more. Leakage is principally caused by missing usage data (meaning usage happened but isn’t included in bill calculation), out-of-date pricing, bill calculation errors, and entitlement errors.
How do I know if I have revenue leakage?
It’s tricky, because it’s a known unknown. To get a confident estimate you need to do an audit, but there are indicators that strongly suggest a problem. For example, some companies don’t have governance around usage allowances - that means revenue leakage is very likely. Or there is usage that is recorded in production systems that can’t be attributed to customers - ditto. m3ter itself can be used as a tool to size leakage - just wire us up in parallel to your existing billing systems.
How does m3ter eliminate revenue leakage?
m3ter’s eliminates revenue leakage by i) ensuring all usage data is captured and prepared for billing, ii) automating the connection between the source of truth for pricing and bill calculation, iii) by offering a highly configurable automated solution for complex bill calculation (no more error-prone spreadsheets!).
Why should I care about a strong control environment?
m3ter helps you establish a strong control environment, meaning you have a high degree of confidence about your usage and billing data. This helps you run your business more effectively - no revenue leakage, better reporting, more pricing agility etc. It also helps limit the costs and disruption of audits - if your auditors have confidence in your systems, they need to ask few questions.
Is m3ter a permanent fix for revenue leakage?
Broadly yes. m3ter establishes a strong control environment - that means you identify and eliminate revenue leakage upfront, and are also alert to new problems as they arise in future.
