The Billing Cycle is the interval of time between billing statements or payment collections for a subscription. Common cycles are monthly, quarterly, or annually. The cycle determines when the customer is charged and the service period they are paying for.

FAQs:

  • What is proration?
    If a customer switches plans in the middle of a billing cycle, proration calculates the cost difference so they only pay for what they used.
  • Can I change a customer’s billing cycle?
    Yes, you can usually switch a customer from monthly to annual billing, often taking effect immediately or at the end of the current period.
  • What is “anchoring” a billing cycle?
    Setting a specific date (e.g., the 1st of every month) for the bill to occur, regardless of when the customer signed up.

Related Terms: