We recently announced a new partnership and integration with Invoiced. The integration was created by the Invoiced team because they wanted to find a way to integrate their billing data with ChartMogul. We talked to CEO Jared King to understand why he believes this is a better approach than trying to build for every need internally.
What is Invoiced?
Invoiced is an account receivable automation solution used by companies that receive most or all of their revenue from credit sales or invoices paid by bank wire.
The Invoiced team helps customers automate and optimize the entire lifecycle of sending an invoice, following up, getting it paid, and doing accounting and reconciliation for each invoice on the backend.
Customers love using Invoiced because it helps them get paid faster and saves them time invoicing and collecting their revenue. At the same time, the product also allows them to provide a modern payment experience to their customers.
Invoiced is not just a customer but also a partner of ChartMogul. They recently launched an integration that allows Invoiced customers to bring their billing data into the ChartMogul Subscription Data Platform.
We spoke to Invoiced’s CEO Jared King to understand what led his team to start using ChartMogul, how they built an integration to connect their billing product, and what life has been like after they started using the subscription data platform.
The Challenge: Invoiced needed revenue analytics; building internally didn’t make sense
Invoiced offers a billing management system as part of their product. It supports subscription and metered billing, as well as managing contracts and other commonly used ways of billing.
Jared points out that Invoiced’s platform is tailored to serve companies that sell to larger customers — typically enterprise ones. In such cases, both the contracts and the process for invoicing, billing, and getting paid are usually more complex than in a typical SaaS business selling to SMBs.
Enterprise companies do not pay by inputting a credit card that you can pull the money from. You have to send an invoice to your customer’s “Accounts Payable” department and wait to get paid.
Naturally, the Invoiced team uses their platform to bill customers and they are very familiar with how billing larger customers can get challenging quickly.
We have 3 main types of customers (or “motions” as we call them): self-service (SMBs that pay month-by-month by credit card), sales-assisted (larger customers who sign custom deals and pay per invoice — usually for a full year), and affiliate sales.
With affiliates, for example, we have one plan and we adjust the price based on how much usage their customers have in a given month. Thus, the amount on their invoice varies from month to month.
Jared and his team realized they needed to add a revenue analytics layer on top of their data to understand how their customers are using the product and what features drive their growth.
While powerful subscription analytics is important, it’s not something that’s central to our overall mission of automating accounts receivable, so we needed to find a best of breed partner that could integrate and perform well.
Initially, they tried to do it by generating a set of Python scripts to pull the data from their database with customers and transactions, but they quickly realized that system is unsustainable.
The data had to be constantly managed, it was taking a lot of time each month just to figure out our basic metrics.
That’s how Jared concluded that they needed a dedicated tool to analyze the data their customers were generating. The choice he had to make was whether to build that internally — potentially as an extension to the Invoiced billing platform — or to buy an expert solution.
Before I started Invoiced, I built at least 2-3 very similar tools — it was pretty clear that the market need was there. But exactly because I come from the Build side, I’ve seen how a lot of the time it can be really bad — it can suck out a lot of time from the business that could be spent elsewhere.
At some point, Jared also considered collecting all data in an Amazon Redshift instance and using a business intelligence tool to derive insight out of it. He says he’s glad he didn’t go down that route because he realizes how expensive — and cumbersome — that would have been.
ChartMogul quickly emerged as the natural choice
Jared shared that his team went through an evaluation of all the major tools available on the market.
We quickly realized that ChartMogul is the only product that would work for our business case.
One of the most important requirements was to identify a solution that would allow them to unite all 3 motions (self-service, sales-assisted, affiliates) in one subscription data platform.
But the logic that the platform uses was equally important. Because of the complexity of billing described above (as described with Affiliates), Invoiced cannot create a discreet number of plans because in many cases pricing is fully customized and changes even month over month.
That’s why Jared believes the only proper way to approach this is to use a platform that looks at line items in invoices and builds the data from the ground up.
The Solution: Build an integration with ChartMogul
When Jared and his team started evaluating the various revenue analytics products on the market, they realized they needed a way to bring their data from customers and subscriptions into the platforms they were testing.
That’s how the team realized they need to build integrations so they can evaluate all platforms in a meaningful way.
These initial integrations weren’t very sophisticated — Jared refers to them as “prototypes” — but even at this stage it was becoming visible that some of the solutions they were trying out weren’t going to cut it for the needs that Invoiced had.
Some looked promising initially, but once we started putting our data in these other systems, we realized most cannot represent it.
ChartMogul was the only platform that fulfilled their needs because it could handle all the various billing cases they had and because it would allow them to bring all customers and motions into one.ChartMogul handled the reality of our business the best. Click To Tweet
That’s how the integration between Invoiced and ChartMogul came to be. Jared admits that initially, they weren’t planning it as something that could be made public and used by other teams that want to use the two products in conjunction.
However, they realized that it would be fairly easy to package the integration in a way that could be used by other customers. In addition, support for tracking MRR and other subscription metrics was one of the most requested features by Invoiced customers.
Jared points out that the Invoiced team always tries to identify the best product in each category (CRM, subscription analytics, etc.) and build an integration with it for Invoiced customers to use. ChartMogul’s Subscription Data Platform came out as the best in its category.
We were very happy to close that gap [MRR and subscription analytics] in our billing product by building the integration with ChartMogul and making it available to all customers to use.
The Result: Invoiced is shifting its thinking around understanding and using data
The big shift in the first 1-2 months was that gathering the data and using it to find out the current MRR and other metrics no longer required constant work.
Jared shares that when he and his team started using the Segmentation functionality, he experienced his “Aha!” moment with ChartMogul. This showed him how they can use the platform to make decisions about their business.
The team pulls data from various sources and imports all of it into ChartMogul:
- Customer data comes from their CRM system (HubSpot);
- Product usage is taken straight from their database (this is also done through the integration they built);
- And of course, revenue data, which comes from the billing product.
This allows them to look at specific data points from an MRR perspective and examine questions they weren’t able to answer before.
We can look at which integrations with accounting, ERP, and payment processing systems are most important from us — not just in terms of the core number of customers who use them, but also in terms of the MRR and growth of those customers over time.
Jared says that this insight wasn’t available to his team before they started using ChartMogul because there was a disconnect between the usage and subscription data. They are still in the early days, but he already sees a lot of potential in using their data to drive business decisions.
As we are starting to plan our product roadmap for 2021, we are seeing how ChartMogul can help us make the right decisions for what to focus on.
Building internally is a lot more expensive than buying
In a landscape, where software is becoming more ubiquitous and accessible by the day, Jared believes it doesn’t make sense to spend time building your own solutions — even for mission-critical tasks such as billing, processing payments, and analyzing revenue data.
He admits it made sense when third-party solutions were either extremely limited or prohibitively expensive (think 6-7-figure price tags), but these obstacles don’t exist anymore.
Cloud-enabled software today is extremely versatile. In cases where a specific solution cannot fulfill your specific needs, integrations come as a valuable way to bridge different platforms and alleviate those pains.