Fill in the form to arrange a demo
Written by Paul Tebbs Account Manager
« Go back
21 Aug 2019  |  Moving Upmarket

How to Bill Larger Companies (and How it’s Different from Selling to Individuals and Smaller Businesses)

8 minute read

Whether you’re used to selling to individuals or to teams in small and medium sized businesses, it’s always a big shift the first time a purchase order lands in your inbox. So far, your customers have been happy to commit to your product on a recurring billing plan paid with a credit or debit card - but billing larger companies and enterprise is a different kettle of fish. It needn’t be an object, however. Let us walk you through how to bill these larger customers with ease.

Most enterprise sales tend to start via the checkout, without the involvement of Sales. Often, professional consumers, or ‘prosumers’, within a large company will buy a licence to a product and claim it back through expenses. It’s when there’s interest from a few people within a large organization that you’re in a strong position to reach out and promote the benefits of having a company plan. This is what we refer to as proactively moving upmarket. Through a sales strategy known as ‘land and expand’, it’s possible to upsell a prosumer, turning a B2C transaction into B2B deal with a large company.

So you’ve taken the journey from selling a single licence to selling a self-serve team licence. Now what? The next step in your move to sell to larger companies will involve a sales-assisted procurement process. Let’s take a look at how this works.

The Procurement Process

Larger companies, especially enterprise companies, have a more formal process where billing is concerned. There are many reasons behind this, from wanting to be transparent around their purchasing procedures, to wanting to keep track of their outgoings, to needing to verify the supplier as genuine and ensure they are correctly taxed for compliance reasons.

When dealing with a larger business’ procurement team, you can expect the following. However, there are 2 important things for you to take into consideration before the process begins:

For your consideration

1. Your customer, or potential customer, may ask for a quote. Depending on the business, they may also ask for a contract so that they have an official exchange of your Terms and Conditions for their records and a written agreement with regards to auto renewal.

2. You may need to be added to your customer or potential customer’s approved supplier list before procurement takes place. This is often the case when selling to enterprise businesses. You’ll be asked to provide your business address, registration number and your tax residency certificate (your W9 form if you’re based in the US). Once your company is an approved vendor in their system, the process can properly begin.

The process

STEP 1 The process starts with the raising of a purchase order (PO). Your customer will send this to you to indicate their intent to purchase your product. At this stage, no money will have changed hands. The customer has set the procurement process into motion.

STEP 2 In return, your customer will expect an invoice from you. They’ll want to tie their PO to the invoice, so ensure you reference their PO number on the invoice.

STEP 3 It’s now your turn to stipulate payment terms. Companies typically specify that they require payment within 30 days. Larger companies will have an Accounts Receivable team to chase unpaid invoices or an automated dunning system to get in touch with customers whose payments are overdue. Now that you’re selling to larger companies you can expect to chase invoices on a pretty regular basis. Cash flow could become an issue if your biggest clients are delayed in paying, so be prepared!

Be ready to accept both card payment and payment via wire transfer. In our unique position of overseeing the checkouts of thousands of SaaS companies, we’ve noticed that orders to the value of $3000 or over will most commonly be paid via wire transfer.

Dealing with resellers

A lot of enterprise companies procure software through a reseller like SHI or SoftwareONE. A reseller procures and deals with invoices for big companies and can be a step in the process if you sell to a company like Amazon. It’s important to bear in mind that, in this instance, you’ll have to bill the reseller and fulfil the order to your customer.

Use a company’s procurement process to upsell

As mentioned before, if you have individuals within a large or enterprise company purchasing your product through self-serve, you’re in a good position to reach out to the company itself and promote the benefits of your team plan. Sometimes individuals within larger companies have to go through the whole procurement process for their individual use of your product, however.

It can often be the case that a company’s IT department don't allow employees to download software from outside a selection of purchased and approved platforms. In these instances, the company has to follow the process above just to secure your product for one person or a small team. This is an ideal time to upsell and promote the benefits of your team plan. The company won’t have to be billed for individuals any longer and can instead enjoy the ease of a plan where new users can be added when the company needs. 

Displaying your pricing

When displaying your pricing on your site, we recommend you have a clear ‘contact us’ button for large and enterprise customers who are interested in team plans. If it’s a company whose IT department keep software under lock and key, you don’t want them turning away because they cannot purchase your self-serve options.

With Paddle on board, you wouldn’t need to fill out a form to be added to your new customer’s approved supplier list. As a Merchant of Record, we handle this for you. Our Create Invoice API also enables to create and send a compliant invoice in one click so you can breeze through the procurement process. 

Take the hassle out of billing so you can focus on winning bigger business. Try Paddle today.

Make It Easy to Run and Grow Your Software Business with Paddle

Everything you need to sell software with checkout, subscriptions, licenses, promotions and reporting bundled in one single platform.

Request a demo Learn more