Billing System Architecture vs. Entitlements Explained

The text discusses the distinct roles of billing and entitlement systems in managing SaaS products, highlighting their different functions and the issues that arise when they are conflated. Billing systems handle financial transactions, such as charging, invoicing, and payment processing, but do not manage feature access or usage limits within a product. Entitlement systems, on the other hand, enforce access control and usage restrictions based on a customer's plan in real time. The text explains how early-stage products often use billing data for entitlement purposes, which can lead to scalability issues as products grow more complex. It emphasizes the need for a separate entitlement architecture to handle runtime enforcement effectively, pointing out that platforms like Stigg can help by decoupling entitlement logic from billing systems. These platforms manage product catalogs, enforce access and usage limits, and integrate across the revenue stack, preserving engineering velocity by preventing pricing logic from becoming tightly coupled with application code.

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