Commerce Glossary

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What is Automating Recurring Revenue?

au - to - mat - ing re - cur - ring rev - e - nue
Is a process by which businesses manage their recurring revenue through a subscription management platform to automate future recurrent charges for their customers. The process involves automated recurring billing combined with payment processing.

Companies embracing a recurring revenue business model, such as SaaS companies, can improve their operating efficiency by automating their recurring revenue streams – as opposed to manual renewals – ultimately leading to an increase in recurring revenue, whether monthly recurring revenue (MRR), annual recurring revenue (ARR), or for any other period of time.

In order to maximize the efficiency of the automatic renewal process, companies should seek out subscription billing or payment providers that are equipped with the right mechanisms to obtain high renewal rates, including tools for combating involuntary and voluntary churn.

In order to make automatic renewals successful, companies also need to have a solid communication strategy with their clients, to avoid not only churn, but also refund and chargeback requests.

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