Coworking

As the coworking business model generally relies on offering a wide variety of services across different membership tiers and upselling opportunities, getting your billing and invoicing right is a make-or-break operation. 

However, relying on manual billing and invoicing processes may lead you to run into the following issues: 

• Lost time (and money): Manually processing invoices is a time drain, taking your team away from what truly matters in coworking – creating an exceptional customer experience. In 2023, processing a single invoice manually cost an average of $12.44, versus just $3.06 with automation, which also slashed invoicing processing times by up to 40%.

• Late payments: Human error can always be a risk with manual billing processes. A recent GoCardless report found that 24% of small businesses in the UK receive late payments overdue by up to two months. Late payments can significantly impact cash flow, having a knock-on impact on paying suppliers and employees on time. 

• Financial mismanagement: Manual tracking gets confusing when you can’t remember which services and amenities your members used, or you’re running a hybrid model. Not invoicing for services is a lost revenue opportunity that other coworking spaces capitalise on, plus you set a standard that your members can take advantage of your generosity. 

• Misapplied taxes: When you undercharge for services and omit VAT and other taxes, you might face financial penalties later down the line, eating into profit. 

Billing errors = broken trust: Meanwhile, if you go the other way, and overcharge or make invoicing mistakes, you’re going to have some unhappy members. Coworking is all about relationships, and a business that exploits its customer base is only going to lose members to the more transparent coworking space next door.

Features that matter in a coworking billing system

Embracing automation in your coworking operations saves time, money, and stress. Here are some key features to look for in a coworking billing system to support your day-to-day operational processes.  

Recurring billing, partial payments, and credit tracking

Membership is the lifeblood of coworking, ensuring financial predictability and resilience to maintain a healthy cash flow. However, this stability relies on recurring billing to generate invoices and take automated payments on the same billing date of its cycle, avoiding forgotten or late invoices. 

Enabling partial payments reflects the flexible nature of coworking. For example, members can pay a deposit on a larger space, overcoming vacancies, uncertainties, and payment voids. 

Giving credits for bookable amenities is a common membership perk, but it must be monitored; otherwise, you’re effectively just giving free space away. Credit tracking, a useful feature of coworking billing software, gives control over resource allocation, avoiding revenue loss, and providing transparency for members.

Multi-location pricing rules

Operating multiple coworking spaces works when you tailor membership fees based on location. For example, charging more for your premium central London site than for suburban spaces. However, this pricing strategy breaks down if you can’t keep track of each member’s  ‘home’ location, and members from lower-cost locations use premium spaces. Look for coworking billing software with multi-location pricing rules to charge coworkers appropriately for the spaces they use.  

Localised taxes and currencies

If you run multiple locations in different countries, local taxes and currencies apply. A coworking billing software with accurate and automated conversions simplifies switching between locations.

Integrations with Xero/QuickBooks

To benefit from the functionalities of billing and invoicing tools, coworking billing software ought to integrate specialised platforms and centralise everything in your tech stack. Leading cloud-based accounting platforms, Xero and QuickBooks, simplify financial management and automate bookkeeping, invoicing, and reporting. 

Refunds, pro-rating, revenue categorisation

Although coworking billing software ensures more accuracy in your payment processes, you can’t keep everyone happy. A system that processes refunds helps restore trust with any disgruntled members. 

Pro-rating charges a member only for the portion of a billing period they actually used. For example, if a member joins or leaves mid-month, they can pay only for specific days, ensuring fairer billing.

From memberships to bookable amenities, revenue categorisation segments services, enabling reporting and profitability management.

How top platforms handle billing

The number of coworking software companies entering the market in recent years makes the process of selecting software for your coworking business slightly more challenging. We’ve analysed three top coworking platforms to explore how each handles billing and invoicing processes. 

Nexudus

With Nexudus coworking software, a new member joining your space can enter their payment card details directly into the member portal using our embedded, PCI-compliant payment form. The card information is immediately tokenised, enabling seamless payment processing and automatic charging using the stored payment card on each billing date. 

Depending on your member’s billing cycle, Nexudus automatically generates invoices and collects payments using the stored card. This triggers a notification (even if a payment failed, the system triggers automated retry attempts). Additional service charges, such as meeting rooms or podcast studios, are included in the next invoice, depending on billing cycles, which generate automatic payments. Operators praise Nexudus coworking software for its accounting capabilities.

OfficeRnD

Providing a similar billing flow, where new members enter their card details directly into the secure, PCI-compliant payment form, OfficeRnD coworking software charges on each billing date without manual intervention or external redirects. Members also receive a notification upon successful payments. The member portal upsells on additional services, including day passes or virtual office options. 

Points to consider: 

• Operators have expressed difficulties in syncing QuickBooks with transactions and sales tax capabilities. 
• Taking Stripe payments when members use another workspace has been challenging, affecting scalability across multiple locations.
• Not all billing processes are fully automated, such as refunding. 

Cobot

Cobot billing software differs from Nexudus and OfficeRnD in how it takes payments. Instead of storing payment card details directly into the system, Cobot integrates with payment providers, including Stripe, GoCardless, and PayPal. Members can select their chosen payment provider and add their card details, triggering automated payment processes thereafter. 

Points to consider: 

• Integration providers charge processing fees. This can impact operational margins if absorbed, or may come at a hidden cost if passed onto members without proper transparency. 
• Operators have expressed difficulties scaling to multiple locations. 
• There isn’t a mobile app, so members and teams can’t view payments while on the go, limiting accessibility.  

Avoiding the billing bottleneck as you grow

Scaling to another site adds another level of operational complexity to your coworking business. So, if you’re still relying on spreadsheets, disconnected tools, and an admin-heavy workload, scaling succinctly will be near impossible. 

Meanwhile, a centralised and efficient system can manage multiple customers, billing processes, and reporting systems across multiple locations. Having oversight of up-to-date financial information also supports informed decisions in an evolving economic climate. 

If you’re geared towards scalability, look for the specifics of modern billing systems to support your growth journey:

• APIs: Facilitates integrations, enabling different tools to sync together in a centralised tech stack. 

• Automation: The number one aspect of billing software is to remove the manual legwork, handling recurring invoices, payment collection, and reminders, mitigating against the risk of human error in your processes. 

• Alerts: Reducing payment delays and missed revenue by informing your team and members about any payment issues and overdue invoices. 

• Dashboards: An overview of what’s coming in and out supports financial forecasting. 

Understanding which services in your first space were most popular helps replicate systems across multiple locations.

Which billing software is right for you?

Overall, coworking billing software is a one-way ticket to financial freedom, providing the tools to understand the numbers and scale your operations across multiple locations. Without it, you’ll need more resources and rely on admin-heavy processes, holding you back with late payments, human errors, and lost opportunities.

To improve your bottom line, start by making a checklist of all the things you need from your billing software and begin researching which systems and tools fit the bill. And we’ve got the perfect comparison guide for you…