Billing Basics
5 min read

Building an SLA With Your Billing Vendor

Why SaaS businesses need a billing SLA

Recurring billing is the financial backbone of any subscription-based business. Delays in invoicing, failed payment retries, or unexpected downtime can disrupt revenue, erode trust with customers, and overwhelm your support team. Yet many SaaS teams use third-party billing systems without formal agreements in place.

An SLA protects your business by setting baseline expectations for system performance and vendor accountability. It also serves as a shared document between finance, operations, and engineering when evaluating billing performance or resolving issues.

Key elements of a billing-focused SLA

While standard vendor SLAs cover items like server uptime and general support response times, billing operations require more specificity. A billing SLA template should include at minimum:

  • Uptime Guarantees: Define expected availability of the billing system. This includes API endpoints used for subscription creation, invoice generation, and payment processing.
  • Payment Processing Windows: Specify the expected time to process ACH and credit card transactions.
  • Invoice Delivery SLAs: Confirm how long after an event (e.g. subscription renewal) invoices are expected to be generated and sent.
  • Retry Logic Documentation: Ensure the vendor outlines their retry cadence for failed payments and how these retries are communicated or logged.
  • Support SLAs: Establish expected response and resolution times for different issue severities—especially if the issue affects revenue collection.

If your billing platform supports configurable retry schedules or automated dunning management, this can often be built into the SLA as a service-level configuration.

Aligning vendor SLAs with your internal ops

It’s not enough for the vendor to commit to performance. You also need to align their SLAs with your internal business processes. For example:

  • If your finance team reconciles payments daily, a 24-hour delay in payment confirmation may cause problems.
  • If your CS team sends manual reminders for failed renewals, they need to be alerted in near real-time when those failures occur.

Ensure your SLA maps to your internal expectations. This is particularly important for time-sensitive flows like subscription renewals and card expiration reminders where delays create churn risk.

Negotiating a fair and useful SLA

Not all vendors offer the same level of SLA customization. Some billing providers have prewritten SLA terms, while others are open to discussion during onboarding or contract renewal.

During negotiations, ask the following:

  • What happens when the vendor fails to meet the SLA? Are there penalties, service credits, or escalation paths?
  • Is SLA monitoring provided by the vendor, or does your team need to set up observability tools?
  • Can the SLA be revised as your business scales or moves into new markets with different needs?

The more mission-critical your billing stack becomes, the more important these questions are. SaaS companies processing high volume or dealing with regulated industries should prioritize formalizing SLAs over informal support assurances.

SLA enforcement and visibility

Once agreed upon, SLAs should not live in a drawer. Make the document accessible to your operations, finance, and engineering leads. Add relevant metrics to your vendor management dashboards. If your billing system offers real-time webhook alerts or integrations with tools like Slack or email, these can help surface SLA failures faster.

Use quarterly business reviews or vendor check-ins to revisit SLA performance. Highlight missed targets and whether compensating actions were taken. Over time, this builds trust and ensures your billing system remains a stable part of your revenue engine.

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