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Billing mechanics

Billing cycle

The recurring period a subscription is invoiced for, and the run that generates those invoices.

A billing cycle is both the period a customer is billed for and the process that produces the invoices for it.

As a period, it is monthly, quarterly or annual, and it fixes what proration divides into. As a process, it is a scheduled run that collects usage, applies discounts and taxes, generates invoices and hands them to collection.

A cycle worth trusting can be run in draft first, held for review, and replayed without issuing anything twice. Billing is the one system where “run it again to see” must be safe, because the alternative is a customer receiving two invoices for the same month.

Whether every customer shares a cycle date or keeps their own is the difference between calendar billing and anniversary billing.

Related terms

  • Anniversary billing Billing each customer on the date they subscribed, so renewal dates are spread across the month.
  • Calendar billing Billing every customer on the same date, usually the first of the month, with a prorated first invoice.
  • Proration Charging or crediting for part of a billing period when a subscription changes mid-cycle.
  • Invoice The document that states what a customer owes for a period, line by line, with tax and totals.