CFO’s Push Customized Billing at Mid-Sized Firms

The finance chiefs of small and midsize businesses are key drivers in a move to activity-based billing.

To keep costs in check, a growing number of small and midsize businesses may soon be launching a customized approach to billing instead of relying on a subscription-based, flat-fee model, a recently released survey found.

 

Activity-based billing, or pricing based on how customers use a product or service, is gaining more ground as the economic slowdown and sluggish rebound in the United States continues to burden smaller companies looking to compete with larger ones, says market-strategy consultancy iGR, which conducted the survey in March.

 

The survey found that about half of the 400 respondents investigated changing their business model to activity-based billing. The consultants noted that 28% of the SMBs currently use activity-based billing methods to bill their customers.

 

The smallest firms in the study, companies having about 10–49 employees, were more likely to use per-unit pricing with or without volume discounts, activity-based pricing, and subscription models. In contrast, the midsize SMBs, such as those with 50–99 employees, preferred to use a subscription-based flat fee per project.

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