A Complete Guide to Recurring Billing

Do you know, "What is recurring billing?" Have you ever tried to figure out "how your business implements a recurring billing strategy or how recurring billing helps your business?"

If you are far away from the recurring billing system, then here is a complete guide to recurring billing, which helps you understand how subscription billing is beneficial.

If we look at the past few years, the recurring billing business model has exploded and become one of the most popular effective sales growth strategies.

What is Recurring Billing?

Recurring billing is an automatic system in which the business company charges for its customers' goods and services on a prearranged schedule.

The recurring billing system gets the customer's information and, on the desired date, automatically charges the payment charges from the customer's account without information of the customers.

What Sort of Businesses is Recurring billing most suited for?

Recurring billing is the most influential business model for those kinds of businesses that offer services regularly.

Here we have listed a few types of businesses that can use recurring billing and drive you the best result.

•     Gym membership
•     Magazines and newspaper subscription
•     Telecom businesses that provide metered or usage-based billing
•     Software as a service-based application like; Dropbox, Slap, Google box

What are the Types of Recurring Billing?

Recurring billing is categorized into two categories:

•     Regular or Fixed Billing
•     Irregular or variable billing
  

Fixed Billing

Fixed billing is that billing in which the same amount of balance will be deducted in every business cycle.

It is well suited for that kind of business which delivers fixed price services or products.

Gym membership and newspaper subscription is the perfect example of fixed billing.

Variable Billing

Variable billing is that billing system which collects the different payments or charges in every payment cycle. Variable billing is now further divided into two categories:

•     Metered Billing
•     Quantity Based – Billing
  

Metered Billing

Metered billing is also known as usage-based billing. This type of billing charges from their consumers on the basis of their usage of services. Utility bills and internet bills are a perfect example of it.

Quantity- based billing

Quantity based billing the customers is charged based on the number of products and services they used.

Generally, subscription-based businesses charge from their customers based on the number of licenses or seats they purchased.

Volume-based cloud storage services are a perfect example of quantity-based billing.

Advantages of Recurring Billing

•     Predictable cash flow into the business
•     Entirely Automated
•     Save time for both customers and business owners
•     Pricing and Packages
•     Reporting and Metrics
  

If you are exploring the subscription-based business model, then here we have mentioned all the important information about recurring billing.

The overall thing is that recurring billing is a mechanism that allows a business to receive ongoing payments; they receive payments from the consumers as they receive information from the customers.  

Payvoice is the perfect and most popular recurring billing system, which is available with various features to handle and manage all billing related jobs