Recurring Billing
Recurring billing is the automatic, repeated invoicing of customers at regular intervals for ongoing services or access – such as subscriptions, maintenance contracts, rentals, or leases.
Billing
Explanation
Recurring charges can be billed monthly, quarterly, annually, or on other cycles, either in advance or in arrears. They may be fixed or combined with usage-based components. Recurring billing must handle:
• start and end dates,
• price changes and indexation,
• upgrades, downgrades, and cancellations,
• proration for partial periods.
In SAP, recurring billing is supported by periodic billing plans in SAP SD, by SAP BRIM, and by SAP Subscription Billing.
Why It Matters
Billing in advance – for example, an annual fee paid upfront – creates a contract liability that is released as the service is delivered. Frequent contract changes require consistent treatment of modifications under ASC 606 and IFRS 15. A reliable link between recurring billing and revenue accounting is essential for accurate deferred revenue and disclosures.
Related Terms
Billing Cycle · Proration · Contract Liability · Deferred Revenue · SAP Subscription Billing · Annual Recurring Revenue (ARR)
Related Articles
• Subscription and Usage-Based Billing: Key Design Decisions
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