Highlights from a discussion at Help Scout about the benefits to customers of paying annually:

• Finance teams will plan or budget for their teams web apps cost for the year.
• Similarly, most managers prefer to know their budgeted spend and to make that spend upfront. It helps them avoid mid-year “I need more money to pay for our software” surprises.
• This also helps managers secure their budget and get their needs resourced upfront because later on they may find their budget is cut and anything that isn’t already committed can be subject to those cuts.
• During the planning stages for purchasing software, there is often an ambitious vision for the roll out. By securing the resources/budget for an entire year, it helps the manager realize that vision.
• The ideal behavior is letting companies prepay, but then drawing down on that credit based on usage/engagement. It helps companies avoid paying for services they aren’t using and also lets the business earn more for companies that grow during the year. (We do this at Help Scout and I’ll write a detailed post about the mechanics of it in the future.)

Hat-tip David McFarlane for these insights!