Are All Billing Cycles Created Equal?

Billing cycles dictate when invoices are sent and when they are due, and impacts your cash flow and the utilisation of network resources. Smile software supports monthly and anniversary billing cycles, but what’s the difference between the two?

If you use a monthly billing cycle, the invoices for all customers are generated on the same day each month. This is a good option for smaller businesses, because you only need to process the billing run once a month. However, a monthly billing cycle means that all invoices have the same due date, causing a monthly peak in your cash flow.

Monthly billing cycles may also cause contention issues, as all customers are unshaped at the same time each month. In general, we do not recommend monthly billing for companies with more than 5,000 end users or ISPs with included usage plans.

pro rata

In contrast, if you use anniversary billing, a customer’s invoice is generated a month after they first sign up. The invoice due dates are spread over a month, streamlining cash flow and network usage. Anniversary billing is more labour-intensive because you should process the billing run at least once a week, but it uses less system resources – monthly billing for 5,000 customers uses the same amount of system resources as anniversary billing for 150,000 customers!

Want more information? Contact Inomial about designing a telco billing solution that’s right for you.