B2B billing guide Effectively connect your B2B customers to the right subscription plans for scalable and manageable growth.
Organization-based billing is a model where a single customer account, representing an entire company or team (the “organization”), is subscribed to a plan. This approach is standard in Business-to-Business (B2B) SaaS, where the purchasing entity is a company, not an individual.
Under this model:
- A single subscription covers multiple users: All members of the organization get access to the product under one billing plan.
- Centralized management: An administrator within the customer’s organization can typically manage the plan, payment details, and user access.
- Scalability: Plans are often tiered based on the number of users, features, or usage metrics, allowing the subscription to grow with the customer’s needs.
Linking an organization to a billing plan involves a few key technical and business logic steps. This process connects a customer’s company profile to a specific subscription tier, granting its members access to a defined set of features.
- Create an organization: When a new company signs up, your system creates an
organizationentity. This record acts as the central hub for that customer, containing their company details, user list, and billing information. - Assign a billing plan: The organization is then subscribed to a specific billing plan. This is often handled via a
subscriptionobject that links theorganization_idwith aplan_id. This subscription object tracks the current plan, status (active, canceled, past due), and billing cycle. - Manage user access: Users are then associated with the organization, often through an invitation system. Your application’s logic checks the user’s
organization_idto determine their access rights based on the organization’s subscription plan. - Handle payments and invoicing: A payment provider (like Stripe or Chargebee) is usually integrated to handle the recurring billing. The subscription information, including the plan details and number of users, is synced with the payment provider to generate accurate invoices. Invoices are sent to the organization’s designated billing contact.
This model allows for a clear separation between the users who access the product and the organization that pays for it, which is fundamental for B2B SaaS.
Properly structuring your billing around organizations is a cornerstone of a successful B2B SaaS strategy. It directly impacts revenue, customer satisfaction, and operational efficiency.
- Simplified customer management: Instead of dealing with dozens or hundreds of individual subscriptions for a single company, you manage one. This simplifies everything from support to sales.
- Scalable pricing: It enables you to implement pricing tiers that scale with your customers’ growth. As they add more users or need more features, they can easily upgrade their plan.
- Predictable revenue: Subscription plans tied to organizations create a stable, predictable recurring revenue stream, which is vital for business planning and valuation.
- Clear ownership: It establishes a clear point of contact within the customer’s organization for all billing-related matters, reducing confusion and payment friction.
While the concept is straightforward, implementation can present a few common hurdles. Thinking through these challenges early can save significant development time and prevent customer frustration.
| Challenge | Solution |
|---|---|
| Proration for upgrades and downgrades | When a customer changes their plan mid-cycle, you need to calculate the correct charge or credit. Use a billing provider that handles proration automatically. The key is to ensure the customer is only billed for what they use. |
| Custom or enterprise plans | Large customers often require bespoke plans with unique features or pricing. Design your system to accommodate custom plans that don’t fit into your standard tiers. This can be as simple as having a flexible data structure (e.g., JSON) for plan features. |
| Failed payments and dunning | Payments can fail for many reasons. Implement a dunning process—a series of automated emails or notifications—to alert the organization’s billing contact and provide an easy way for them to update their payment information. |
| Seat management | In per-user pricing models, what happens when a customer adds or removes users? Your system should detect these changes and adjust the subscription quantity accordingly. This is often done through webhooks from your authentication provider or billing system. |
To create a robust and customer-friendly billing system, consider these best practices from the start.
- Make it self-service: Empower customers to manage their own subscriptions. A customer-facing billing portal where they can change plans, update payment details, and view invoices is essential. This reduces the burden on your support team and gives customers the control they expect.
- Communicate clearly: Be transparent about pricing, billing cycles, and any changes to their subscription. Send automated email notifications for key events like upcoming renewals, successful payments, and failed charges.
- Offer flexible billing options: While monthly billing is common, consider offering an annual plan at a discounted rate. This can improve cash flow and reduce churn.
- Securely separate billing roles: Not every user in an organization should have access to billing information. Implement role-based access control (RBAC) to restrict billing management to designated administrators or billing contacts.
Kinde is designed to simplify the complexities of B2B SaaS, including the critical link between organizations and billing.
Kinde provides the foundational elements to connect your customers to your subscription plans by allowing you to create and manage organizations, invite users to them, and assign roles. This lets you control who in an organization can manage billing and other administrative tasks, ensuring a secure and streamlined process.
Get started now
Boost security, drive conversion and save money — in just a few minutes.