Health Care SaaS Case Study
Subscription and Usage-Based Billing
Speeding up Collections and Automating Complex Billing
Summary
Order-to-Cash Automation
Paytient selected Ordway to modernize its billing and revenue accounting operations as the company outgrew QuickBooks Online and prepared to migrate to NetSuite. With Ordway, Paytient automated subscription and usage-based billing, revenue recognition, and dunning communications across its customer base.
Ordway’s API integrations with NetSuite and Paytient’s internal admin portal help route billing data automatically, reduce manual work, and support more reliable finance operations. The result is a flexible billing foundation that can handle the unique complexities and evolving requirements of Paytient’s business model.
The client
About Paytient
Paytient is a healthcare technology platform on a mission to build the Better Care Economy by offering a simpler, more affordable way to pay for healthcare expenses. Members have access to a revolving, interest-free line of credit to pay for expenses not covered by health insurance plans. No credit check is required to participate. Individuals gain access to Paytient through their employers, who offer it alongside other company benefits, such as life insurance and healthcare.
Once employees enroll as members, they can use the mobile app or a Paytient card to make purchases at a point of care. Lines of credit range from $2,000 to $5,000 and can be used at a doctor’s office, dentist, hospital or other healthcare provider for routine or emergency care.
There are no processing fees to use Paytient and the member can choose their own repayment schedules which can be as long as 12 months. Paying off the expenses are easy. A small amount is deducted during each payroll cycle until the balance is paid off.
The challenge
Selecting A New Billing System
Migration from QuickBooks to NetSuite
Before adopting Ordway, the Paytient finance team was using QuickBooks Online to generate invoices. However, as the company acquired more customers and grew revenue, it needed a more powerful billing and revenue accounting engine to handle its increasingly diverse and larger contract portfolio. Patient was also planning to switch off Quickbooks and migrate to Netsuite ERP.
Vendor Selection Criteria
Paytient evaluated a number of different billing and revenue platforms. The company had a number of complex invoicing, payments, and accounting use cases that no single vendor could solve for completely. However, Ordway was able to automate more of the complex use cases than the other platforms that were evaluated.
“Ordway offers more flexibility than the other billing platforms we evaluated, which is important as we continue to evolve our pricing and business model.”
Brian Lingam, CPA
Director of Accounting
Paytient
Migration from QuickBooks to Ordway
Billing System Implementation
Ordway assigned a designated project manager to lead the implementation effort and collaborate with Paytient’s accounting, product, and development teams. Each of Paytient’s different products, plans, and price points was modeled in Ordway along with the chart of accounts. In addition, all the existing customer contracts were uploaded, and the associated billing and revenue schedules were generated.
Netsuite ERP Integration
Ordway’s revenue subledger was integrated with Paytient’s general ledger in its NetSuite ERP. Journal entries for invoices, payments, deferred revenue, and recognized revenue are posted to the general ledger in NetSuite for reporting and rolled up into the corporate financial statements.
An integration was also set up between Paytient’s internal “admin portal” and Ordway. Inputs to the billing process, such as payroll deduction amounts, renewal pricing changes, and new customer subscriptions, are routed automatically from the portal into Ordway using real-time API calls.
Customer Invoices
Paytient issues two types of invoices to its corporate customers:
Subscription Billing
The first is a subscription fee for enrolling the company’s employees in one of Paytient’s various plans. Pricing is based on a fixed monthly “platform” fee and a variable fee that is determined by the number of employees covered in the program. These subscription invoices are issued monthly or annually, depending on the payment terms negotiated in the contract.
Usage-Based Billing
The second type of invoice is not a true revenue-generating invoice but rather a list of repayments to be collected from each employee during the next payroll cycle. The amounts vary for each employee each month, depending on the dollar value of expenses they have incurred and the repayment period elected. Paytient’s core application tracks the balances of each member and sends Ordway’s billing engine the details of who to bill on which dates and for what amounts. Ordway then generates the associated customer invoices.
“The billing runs just happen, automatically, on the right dates at the right frequency. It’s so reliable that we have come to take it for granted.”
Jeremy Duvall
Principal Product Manager
Paytient
“We have some tricky use cases such as needing to reverse invoices for payroll deductions and then reissue them. Ordway handles these types of complexities really well.”
Jeremy Duvall
Principal Product Manager
Paytient
Benefits
Collections and Payments
Dunning Communications
As invoice due dates approach, customers are sent email reminders about upcoming deadlines or auto-pay transactions. Billing contacts for delinquent accounts receive automated reminders about outstanding balances and options to remit payment.
Payments via Multiple Channels
The customer community submits payments through a wide variety of channels. Some customers pay by credit card via Stripe’s payment gateway. Other payments are collected via wire transfer, ACH, or a check lockbox directly through Paytient’s banking relationships.
Partial Payments
For example, a large parent organization may pay the subscription fees for each of their subsidiaries. However, each of the subs (child accounts) has their own independent payroll system and therefore needs to manage the payroll deductions. As a result, Paytient might send a single invoice to one company and receive multiple, partial payments from other organizations.
“The dunning communications have provided a big benefit. The ability to configure automated emails with different frequencies and follow-ups ha helped Paytient to improve our collection rates.”
Brian Lingam, CPA
Director of Accounting
Paytient
Complex Billing and Revenue Recognition
Parent Child Hierarchies
Paytient’s business model and customer relationships create some unique challenges for invoicing and payments. Many of the customers are large organizations with multiple subsidiaries that require a parent-child account hierarchy. Different customers choose to fund the Paytient plans in different ways.
Multi-Entity Accounting
Further compounding the challenge is that Paytient’s corporate structure is organized into multiple legal entities. Invoices are sent through one entity. Payments are collected through another. Intracompany transactions are performed on the back end to reconcile the accounting.
