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Billing mechanics

Calendar billing

Billing every customer on the same date, usually the first of the month, with a prorated first invoice.

Calendar billing aligns all customers to a single date. Everyone is invoiced on the 1st, whenever they signed up.

Finance generally prefers it: one run, one set of numbers, and a month of revenue that maps cleanly onto a month of the calendar. Customers with several subscriptions get one invoice instead of several on scattered dates.

The trade is the first invoice, which has to be prorated from the signup date to the first cycle date, and the concentration of all payment failures and all retries into the same few days. See anniversary billing for the other approach.

Related terms

  • Anniversary billing Billing each customer on the date they subscribed, so renewal dates are spread across the month.
  • Proration Charging or crediting for part of a billing period when a subscription changes mid-cycle.
  • Billing cycle The recurring period a subscription is invoiced for, and the run that generates those invoices.