billing-best-practices

Billing Best Practices

Guidance for building production SaaS billing systems that handle real-world complexity: failed payments, mid-cycle changes, multiple currencies, tax compliance, and everything in between.

Architecture Overview

[Customer] --> [Checkout] --> [Subscription Created]
                                      |
                    +-----------------+-----------------+
                    |                 |                 |
              [Active]          [Trialing]       [Past Due]
                    |                 |                 |
              [Billing Cycle]   [Trial Ends]     [Retry Logic]
                    |                 |                 |
              [Invoice]         [First Charge]   [Recovered / Canceled]
                    |                 |
              [Payment]         [Active]
                    |
              [Next Cycle]

Quick Reference

Need to...	See
Understand subscription states and transitions	Subscription Lifecycle
Handle failed payments and reduce churn	Failed Payments
Calculate mid-cycle upgrade/downgrade charges	Proration
Support multiple currencies and regional pricing	Multi-Currency
Set up tax collection and compliance	Tax Compliance
Implement plan upgrades and downgrades	Plan Changes
Design invoice structure and billing cycles	Invoicing
Prepare for launch with a billing checklist	Billing Checklist

Start Here

Building billing from scratch? Start with Subscription Lifecycle to understand how subscriptions move through states, then Invoicing to design your billing cycle. Run through the Billing Checklist before going live.

Losing customers to failed payments? Go directly to Failed Payments. Involuntary churn from payment failures is the most preventable source of revenue loss.

Adding plan upgrades/downgrades? Follow this path: Plan Changes (when and how changes apply) then Proration (the math behind mid-cycle charges).

Going international? Start with Multi-Currency (currency detection, regional pricing) then Tax Compliance (automated tax collection, MoR model).