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In this article you will learn more about:
2. Recurring Billing in the Client’s Account
- Use a client's credit before processing monthly payment
1. Purchase Date, Billing Day and Effective Date
Subscriptions follow a monthly billing cycle based on their purchase date, Billing Day or in some cases, the subscription's effective date.
Subscriptions are billed a month in advance. If you want to charge clients at the beginning of the month for the current month, your best option is to set the Billing Day on the 31st of the month, not the 1st.
If a Billing Day and/or an effective date is specified, we recommend you prorate subscriptions at checkout so clients are charged based on the remaining occurrences in the month rather than the full price.
👉 Purchase date
If no Billing Day is set, each client is billed recurrently on the same day of the month they bought the subscription. Each invoice covers the period until the next invoice.
Scenario: Buying a subscription on May 15th with no Billing Day specified.
Billing Day: Unset
Purchase date: May 15th (this becomes the monthly billing date)
May 15th (at checkout), client pays for the period between May 15th-June 14th.
June 15th, client is invoiced to cover the period between June 15th-July 14th.
July 15th, client is invoiced to cover the period between July 15th-August 14th.
👉 Billing Day
When specified, all clients with the subscription are billed recurrently on the same day each month, regardless of when it was purchased. Each recurring invoice covers the period from the 1st to the end of the upcoming month. Subscriptions with a Billing Day are invoiced one month in advance.
Scenario: Buying a subscription on May 15th with a Billing Day specified.
Billing Day: The 25th
Purchase date: May 15th
May 15th (at checkout), client pays to cover the period between May 1st-May 31st.
May 25th, client is invoiced to cover the period between June 1st-June 30th.
June 25th, client is invoiced to cover the period between July 1st-July 31st.
If a subscription is bought after the month's Billing Day, clients are charged for two months of services at checkout. The second charge is what would have been invoiced on the missed Billing Day, seeing as subscriptions with a Billing day are invoiced one month in advance.
Scenario: Buying a subscription on May 15th after the specified Billing Day.
Billing Day: The 10th
Purchase date: May 15th
May 15th (at checkout), client pays to cover the period between May 1st-May 31st.
In addition, client pays to cover the period between June 1st-June 30th.
June 10th, client is invoiced to cover the period between July 1st-July 31st.
👉 Effective date
The date a subscription becomes active and can be used to register to activities. A client may purchase a subscription before its effective date. In this case, when no Billing Day is specified, the effective date becomes the monthly billing date.
Scenario: Buying a subscription on May 10th before the subscription is effective.
Billing Day: Unset
Effective date: July 15th (this becomes the monthly billing date)
Purchase date: May 10th
May 10th (at checkout), client pays to cover the period between July 15th-Aug 14th.
In June, no invoice occurs.
In July, no invoice occurs.
August 15th, client is invoiced to cover the period between Aug 15th-Sept 14th.
2. Recurring Billing in the Client's Account
Monthly billing and payments are automated. Clients can access these records in their user account. Here's an admin's view of the recurring billing in a client's account:
Scenario: A 60$ subscription is purchased on February 18th
Billing Day: Unset
Effective date: Unset
Purchase date: February 18th (this becomes the monthly billing date)
Pro Rata: None
February 18th (at checkout), client saves their card with authorization. Client pays to cover the period between February 18th-March 17th.
March 18th, client is invoiced to cover the period between March 18th-April 17th.
The client's credit card is automatically charged and the balance is brought to 0$.
Click on the applicable invoice and/or payment to view its details.
Admins can save a credit card or eCheck for a client if neither is currently on file. However, admins cannot change a client's existing saved payment method for a subscription payment. Only clients can change their payment method.
Use a client's credit before processing monthly payment
By default, if the client has a credit in their account, the credit is taken into consideration before processing an automatic payment. For example, if the recurring subscription amount is 100$ and there's a 30$ credit in the account, a payment of only 70$ is charged. Admins will have to manually reconcile the credit amount to the applicable subscription invoice.
You can toggle the 'Use for subscriptions' feature on and off in the Accounting and Finance>Payments subtab and scrolling down to the Client balances section.
3. Enabling Pro Rata
Rather than charge a subscription in full, the price can be prorated to reflect the number of days/occurrences that remain in the billing cycle. If only a subscription is purchased, the price is prorated based on the number of days left in the billing cycle. If a subscription is purchased with an activity, the price is prorated based on the number of activity occurrences left in the billing cycle.
Pro Rata is recommended when:
A subscription can be purchased before its effective date.
Specifying a Billing Day.
Specifying an expiration date.
If you don't prorate, clients are invoiced the full subscription cost regardless of when it was purchased or if sessions were missed or it expires before the end of the month.
4. Discounts on Subscriptions
All discounts (except Membership required) can be applied to subscriptions at checkout. Most promotions will continue to be applied to the monthly invoices as long as the discount criteria is met by the upcoming billing date.
Important things about discounts on subscriptions:
Discounts are calculated using the base subscription price. If your subscription is prorated, it prorates the subscription after the discount has been deducted.
If a client purchases two subscriptions and becomes eligible for a multi-person or combo discount, the discount only applies during recurring billing if both subscriptions share the same billing date.
If discount requirements are no longer met (e.g. an item was cancelled from the original invoice), no discount will be applied on the recurring billing date. However, if a client buys a subscription for themselves or an account member and is eligible again, the discount is applied to the recurring invoice as of the next billing date.
When applying a new discount to an existing subscription, all new and existing subscribers receive its benefits (if criteria are met). If you don't want existing subscribers to benefit from a new discount, apply the new discount to a new subscription plan.