Examples of how you manually handled payments
Hi all! A piece of advice I hear extremely regularly is "don't waste time integrating billing into your app in the early days". I like the idea of this advice, as integrating billing is a real time sink. However - I'm struggling to wrap my head around how to actually implement it.
My best theory is: allow a two week trial and collect at least their email. This gives me two weeks to manually send/schedule them invoices; and if they don't pay, I manually edit their account back to the free plan at the end of this trial (whenever I get the chance). Then I can monitor any failed payments in the future, up until the point I automate billing.
Does this sound about right? Keen to hear how any of you have manually handled subscriptions in your early days.
Hey Daniel, I think you are right to not focus on billing, and instead focus your time on sales and the important stuff of your app. With my Saas we have done over $250k worth of sales, and I still haven't integrated payment into the actual app. My Saas allows funeral directors to webcast their services, and most of them really like writing checks. I used to have them mail the checks to my house, and then every month I'd just go deposit them. 5 years later we still do this, except I worked with my CPA so they could mail checks directly to their office, with my company name on it. In all those years I've never had a single customer not pay one of their invoices.
But I must admit my situation is a bit unique, and you probably don't want to replicate it. Also when I first started Stripe wasn't around. Entrepreneurs have no idea just how much better Stripe has made things!
If I were you I would simply make a checkout page that creates a customer in Stripe. This should not take you long at all. Also make sure you have some sort of way to manually deactivate users. You can then login to Stripe and manually add them to a subscription, and just keep an eye on that subscription in Stripe. If they stop paying in Stripe you can just deactivate them in your app. This is actually what we do, for our customers who want to pay with CC.
I also agree with others, this completely depends on your price point. If you are over $1,000 a month you can probably get away with just using something like Wave and just send invoices every month. If you are at $10 a month, it's probably worth your time just to knock out the auto billing right away.
It really depends on your price point and how well you expect to know your customers. For example:
I billed manually back in 2002 just like that. When the user signed up, he immediately got an email with the bill. I granted a 14-day trial period. If the bill hasn't been payed within the two weeks, I considered the account as cancelled. (I did not have a free tier then.)
As we had no established online payment system then, all payments were done by bank transfer. This resulted in a high cancellation rate of about 30 percent.
But please be aware of the downsides. Depending on your local laws and the countries you want to offer your service, your bills may contain VAT. This was a real headache, especially as the VAT rate changed in Germany. Today I would use a service like Paddle or Fastspring that handle all of those concerns for you for a relatively small fee.