Automate your subscription billing with recurring invoices. Learn best practices for monthly billing and reducing churn.
If you run a subscription-based business or have retainer clients, recurring invoices can save you hours each month while ensuring consistent cash flow.
What Are Recurring Invoices?
Recurring invoices are invoices that are automatically generated and sent at regular intervals (weekly, monthly, quarterly, or annually) for ongoing services or subscriptions.
Perfect For:
- Monthly retainer services
- Subscription software or services
- Membership fees
- Maintenance contracts
- Regular deliveries or services
- Ongoing consulting arrangements
Benefits of Recurring Invoices
1. Time Savings
Set up once, and invoices send automatically. No more manual invoice creation each month.
2. Consistent Cash Flow
Predictable revenue makes financial planning easier and improves business stability.
3. Reduced Errors
Automation eliminates mistakes from manual invoice creation.
4. Better Client Experience
Clients receive invoices at expected times without delays.
5. Improved Payment Rates
Consistent invoicing creates a payment habit with clients.
Setting Up Recurring Invoices
What to Include:
- Billing frequency: Weekly, monthly, quarterly, annual
- Start date: When the first invoice sends
- End date: When recurring stops (or indefinite)
- Auto-send settings: Automatically email to client
- Payment reminders: Automatic follow-ups for unpaid invoices
- Price escalation: Annual increases (if applicable)
Billing Cycle Options:
Anniversary Billing: Bill on the same day each month (e.g., 15th)
Calendar Billing: Bill on the first of each month
Custom Billing: Specific to your business needs
Payment Collection Methods
Manual Payment
Client pays each invoice individually (check, bank transfer, etc.)
- Pros: Client has control, flexible
- Cons: Delayed payments, more follow-up needed
Automatic Payment
Charge saved payment method automatically when invoice is generated
- Pros: Guaranteed on-time payment, less admin work
- Cons: Requires client card/bank details on file
Handling Common Scenarios
Mid-Cycle Cancellations
Options:
- Prorated refund: Return unused portion
- Service through end of period: No refund, access until cycle ends
- No refunds: Stated clearly in terms
Price Increases
Best practices:
- Notify clients 30-60 days in advance
- Explain the value they're receiving
- Grandfather loyal clients at old rates (optional)
- Allow clients to cancel if they disagree
Failed Payments
Create an automatic retry schedule:
- Retry payment after 3 days
- Send payment failed notification
- Retry payment after 7 days
- Final notice and service suspension warning
- Suspend service after 14 days
Legal Considerations
Always ensure:
- Client explicitly agrees to recurring charges
- Terms clearly state cancellation policy
- Client can easily update payment information
- You comply with subscription regulations in your area
- Receipts are sent for each payment
Metrics to Track
For subscription businesses, monitor:
- Monthly Recurring Revenue (MRR): Predictable monthly income
- Churn Rate: Percentage of customers who cancel
- Failed Payment Rate: Percentage of declined transactions
- Average Customer Lifetime Value: Total revenue per customer
- Payment Collection Time: How quickly you're paid
Reducing Churn with Smart Invoicing
- Send invoices 5-7 days before charging
- Remind clients about upcoming renewals
- Make cancellation harder than payment updates
- Offer annual plans with discounts
- Provide multiple payment method options
- Respond immediately to payment failures
Invoice ASAP makes recurring invoicing effortless with automatic generation, flexible billing cycles, payment retry logic, and comprehensive subscription analytics—everything you need to run a successful subscription business.