Ok, we're in the middle of implementing a new billing platform, and are going from anniversery billing, over to batch billing on the 1st of each month, with new signups pro-rated up to that date etc.

In the past we've always had anniversery billing, so if a client signed up on the 10th of the month, they would get rebilled 30 days from the 10th, and so on. This was ok, but it meant tracking recurrings that did not process was a huge task in itself, as you have to do that every day, as each client's billing comes around.

Looking at this batch billing on the 1st of the mth, it looks like a much more efficient and simpler method of tracking clients who have issues with their recurring payments. So on the 1st of the mth, you run your batch billing from whatever software you use, and the system gives you a report of what processed and what did not process. You then chase those recurrings that didn't process over the next 14 days (or whatever) and once you have got those sorted out, there's no more tracking until the next billing batch is run, on the 1st of the next mth.

So I was wondering, do you use batch billing or anniversey billing, and why do you use the method that you do?

Seems there's a lot of hosts around these parts moving to a new billing platform, so this could be an interesting discussion. :)

Originally posted by Aussie Bob
This was ok, but it meant tracking recurrings that did not process was a huge task in itself, as you have to do that every day, as each client's billing comes around.

Looking at this batch billing on the 1st of the mth, it looks like a much more efficient and simpler method of tracking clients who have issues with their recurring payments.

Agreed. We seriously looking at that this time around. Chasing those deleted accounts through Paysystems each day for years has really soured me on the idea of anniversary billing. :)

We use anniversary billing for the moment, but are in the planning stage of switching to batch billing over the next few months.

The principal reason for this is because we're switching away from Worldpay and to a full merchant system with our bank, which is a move designed to give us more control over our billing systems. Their systems store all the card details securely, and then once per month we'll simply send through a list of customers and the amounts they need to be billed to their card. This does away with having to have ongoing payment 'agreements' so to speak, and enables us to change the billed amount very easily should the recurring amount need to change for any reason.

A secondary reason is as you've stated - time saving. With anniversary billing it's a lot more time consuming to keep track of any failures that come through, since you'll have money coming in, and thus most likely failures coming in, every day of the month. I'm really looking forward to just having everything processed on one day, and then allocating the next X days to chasing the non payers.

:)

Batch billing sounds like an excellent idea, but it would seem that our new Merchant account does not provide this feature.

For the ones that are using batching, does it work for you as well when you have quarterly, semi, and annual payments?

Originally posted by Website Rob
For the ones that are using batching, does it work for you as well when you have quarterly, semi, and annual payments?

Well we're developing a billing system which will integrate with our bank, and will submit only the clients that will need to get billed at that particular batch session. So it will know when clients are billed monthly, and send them through every month, clients who are billed biannually, send them through every 6th month and so on...

This is where systems like ModernBill can come in quite useful. Unfortunately for us MB doesn't quite fit the bill with regards to how our billing system will need to work, but I'm sure for many it would be a good solution. It certainly has batch processing capabilities, and the ability to cope with variable payment periods.

Originally posted by akashik
Agreed. We seriously looking at that this time around. Chasing those deleted accounts through Paysystems each day for years has really soured me on the idea of anniversary billing. :)
heh. Tell me about it. I had an amazingly simple yet highly complicated and laborsome method of tracking such transactions. :o

Compared to my tracking for anniversery billing, this new batch billing platform looks a breeze. :cool:

Originally posted by Aussie Bob
[b]So I was wondering, do you use batch billing or anniversey billing, and why do you use the method that you do?


Definately batch..

Anniversary billing can turn you into a professional billing company instead of a quality hosting company.

Originally posted by Nettworkz
Definately batch..

Anniversary billing can turn you into a professional billing company instead of a quality hosting company.
And your reasoning for that?

We use anniversary billing. No plans to change to batch billing. If done right, anniv. billing is easy to keep up with. With your own merchant account and built-in automated billing, you run charges each day, have tracking built-in for delinquents, and no messing with pro-rated invoices. Clients know their anniv. date upon signup, which many like. Keeps a constant amount of money flowing in, and avoids the one full day of billing, emailing, sending out invoices (for check payers), etc...

We can bill out thousands of clients accurately and easily in an anniv. system with less than 30 minutes per day of work for 1 billing person.

Batch does make sense for some organizations, but not for us. :)

- John C.

Originally posted by JohnCrowley
We use anniversary billing. No plans to change to batch billing. If done right, anniv. billing is easy to keep up with. With your own merchant account and built-in automated billing, you run charges each day, have tracking built-in for delinquents, and no messing with pro-rated invoices. Clients know their anniv. date upon signup, which many like. Keeps a constant amount of money flowing in, and avoids the one full day of billing, emailing, sending out invoices (for check payers), etc...

We can bill out thousands of clients accurately and easily in an anniv. system with less than 30 minutes per day of work for 1 billing person.

Batch does make sense for some organizations, but not for us. :)

- John C.

Exactly for us too. Aussie Bob brings up an interesting point of view, but honestly with 1000s of customers I'm finding that our one part-time billing person can handle chasing non-payers and suspensions with no problem whatsoever.

We are looking at separating regular hosting accounts, colos/deds and domain registrations/renewals into three separate instances of ModernBill though. I don't like the way everything is kind of mixed together with running them all through one ModernBill. That's probably just my obsessive need to keep everything in its own place. :D

--Tina

My 2 cents. We use billing system integrated with the Verisign/Merchant-e Solutions and by default it is an anniversary billing. Hsphere keeps track of all the past dues and all we have to do is sink up QuckBooks records with Hsphere records which is a little painful but doeable. We don't even care about keeping the track of past dues in Quickbooks. The number of accounts The only problem are prepayments that have to be accounted for manually in Quickbooks. I.e. how much money to transfer from Unearned revenue account in Quickbooks into Sales account.

My biggest concern with the batch billing would be timing of cash flows it requires an extra effort to do the budgeting if you are getting a huge chunk of cash once a month. I'd personally prefer to get cashflows evenly spread over the course of the billing period. Another one is messing around with pro-rated invoices which would mean that customer will be billed twice during first 30 days and we found that a lot of customers have difficulty grasping this concept without further explanation by us.

We moved to a ModernBill/PSiGate merchant account setup just over a year ago now. At the time, all invoices were done on the 1st of each month, so it seemed the logical thing to do was to keep things as they were.

After making this decision, has been been SO much nicer to simply run things on one day of the month and focus in on the delinquents as neccessary. ModernBill has certainly made it easy to continue down this path, as well as invoke this system on all new signups with the pro-rated billing feature/threshold.

I personally like the idea of worrying less about the billing systems and procedures, as with the batch billing, and focusing more and business development and customer service.

We used to use batch bulling. But then with the new clients, we just set them up on the anniversary date. The ones that signed up for automatic renewal - LinkPoint handles.

The others that want a reminder - we send it. If it is not responded to in 7 days, they are billed. Of course this is all in the TOS

Hmm - in theory, batch billing does seem like a more efficient way to do this.

Granted, I don't think that you'd be able to set something like this up with a 3rd party processor, but with a merchant account, it shouldn't be an issue.

However, I am curious as to why most of the larger companies do anniversary billing? There must be some logical reasoning behind that or they would've switched to batch.

Boris

I like anniversary billing myself - keeps a steady stream of cash into the bank account and instead of having to do dozens of accounts at once for failed payments I can do 1 or 2 every couple days and never have more than a handful at once to deal with.

Of course I'm bad about doing batches weekly anyway and then spending 3 hours dealing with suspensions/etc and cussing the whole time :D

Originally posted by JohnCrowley
We use anniversary billing. No plans to change to batch billing. If done right, anniv. billing is easy to keep up with. With your own merchant account and built-in automated billing, you run charges each day, have tracking built-in for delinquents, and no messing with pro-rated invoices. Clients know their anniv. date upon signup, which many like. Keeps a constant amount of money flowing in, and avoids the one full day of billing, emailing, sending out invoices (for check payers), etc...
Yeah, it would come down to having a good automated system of tracking delinquents. I never had such a system, when we used Paysystems, and it was basically all manual (like akashik).

We were a small host (IMO) with around 40 recurrings per day to deal with, so out of those 40 recurrings, you would have maybe 10% that would not process. So those 10% get placed into a tracking system as we make a 2nd attempt on their card a few days later . . . and so on and so on.

Something in me is just drawn to running the billing on the 1st of the mth, and then chasing delinquents over the next 14 days etc, and then billing again on the 1st of the next mth.

I wonder if clients prefer anniversery billing, or being billed on the 1st of the mth? I think being billed on the 1st of the mth is easier to remember, and the anniversery billing was always changing the date, being 30 days from their previous billing date, and 31 days in mths etc, so the actual date is always changing on them.

hmmmm....

but how do you transfer over smoothly in regards to the payments themselves? give the clients a free month? divide the monthly rate by 30 and roll that into the next monthly free as well?

also, how do you handle new accounts? what if they sign up on the 4th?

:confused:

[pretty obvious I am still green behind the ears huh? I'm just learning as I go...]

Originally posted by cnm72
hmmmm....

but how do you transfer over smoothly in regards to the payments themselves? give the clients a free month? divide the monthly rate by 30 and roll that into the next monthly free as well?

also, how do you handle new accounts? what if they sign up on the 4th?

Usually they are pro-rated. Yes, if your hosting is $30 a month, and they start on the 4th, then you would charge them $25.00 or $26.00

I'm struggling with this decision right now, too.

At this point I'm leaning towards anniversary billing because:

1) It is more flexible for the customer. No hassle with pro-rated billing the first month, and the informal "survey" we took with our customers had an overwhelming response to use monthly billing on whatever day they signed up.

2) As long as it is always the same day, the people we surveyed prefered this method.

3) Part of the attraction of using ModernBill is that it can automatically handle the failed payments, emails to clients, and then (after three emails and x attempts) automatically handle the account suspend. I've tested this out now, and it seems to work quite well.

4) At the end of the day, as a consumer I am drawn to anniversary billing. A quick review of the majority of subscriptions I have shows that most are renewed on whatever day I subscribed. Thus, I do not wish to "buck the trend" of how I feel the average consumer would want to be billed.


Aussie Bob, imho, after doing the testing with modernbill.. I encourage you to try it out. It seems to work well, and I'm sure it works with reseller accounts, too. It forces you to send three emails over xyz days, so emails could ask your customer to contact you if they have a problem, etc... but other then that, the whole process can be automated. No need to track anything down since they can update their own card numbers, and MB automatically tries again.

Be careful when relying solely on MB to keep track of things. We have 1000s of customer records in MB and it doesn't always work.

--Tina

Originally posted by AH-Tina
We have 1000s of customer records in MB and it doesn't always work.
:eek:

Eh? What kind of problems have you experienced? Of all things, our billing system must be absolutely reliable. Or course, at year end the figured in the billing system must match the figures in the bank/statements/financials... but still.. what kind of problems have you experienced?

It doesn't always suspend all the accounts it should. Going back over everything and manually auditing the accounts...there were quite a few that should have been suspended, that weren't.

Originally posted by AH-Tina
It doesn't always suspend all the accounts it should. Going back over everything and manually auditing the accounts...there were quite a few that should have been suspended, that weren't. Oh... you had me really worried for a second. I thought you meant financial problems...

OK.. thanks for the heads-up. I doubt we'll be relying on it right away anyway... we'll ease into using it nice and slow and if it's reliable then we'll see.

Thanks!

Well, it is a financial problem when you find a bunch of accounts that should have been suspended...but are happily getting free hosting for severel months. ;)

--Tina