What does everyone think about pros and cons of billing for service yet to be received (in advance, like the phone company?) versus billing for service already received (in arrears, like your power bill?)

Has anyone made the transition from one to the other?

I would bill in advance, as if the person refuses to pay, you'll have a lot harder time getting the money than if you were a power company!

It would be business suicide to bill for hosting "after the fact". We have a hard enough time keeping on top of the fraudulant orders from spammers. To just hand them over a hosting account, gift-wrapped, would be absolutely ludicrous.

--Tina

For my Italian customers I bill only the first payment in advance then most of my clients pay after 30 days.
Until now no problems, but I'm sure that if I allow it to outside Italy I will get problems.

Oh this is a no brainer. Bill in ADVANCE, people have a harder time paying for services rendered than services required, period. Human nature.

Hard enough to collect all you bill in advance. Billing in arrears would be a sure invitation to those who would defraud you of your rightful earnings.

Just thought I'd followup and let everyone know that we made the switch yesterday after significant re-coding of our custom billing system. This one month of course, we're double billing, and doing our best to roll with the pain of angry customers (despite the change being communicated via multiple channels for weeks).

We decided the switch was necessary after realizing that a customer could sign up on the 2nd and pay nothing, get invoiced on the 1st of the next month and pay nothing, and not get locked until the 20th, which means 50 days of service for exactly zero dollars.

Thanks to everyone who weighed in on this.

... cause client can always demand a refund when he/she is not satisfied but "huntig" people to pay is difficould and ressource/time intensive.

Greetings:

With the sole exception of our monitoring product, we bill all service in advance of them being rendered.

We've found this provides a greater degree of protection.

Thank you.

Of course, in advance.

Although, you should definitely have policies regarding refunds on payments made in advance (I.E., a client cancels 6 months into a 12 month contract, what do you do?). It is a good idea to make those policies clear to the client before they signup.

Also make sure that the client is aware that the service will automatically renew at the end of their term. Believe it or not, some people don't expect the service to renew at the end of their term. :)

Hey, I'm running a business here LOL

Always in advance.

Bill in advance, and refund the unused portion if they leave, anything else will result in bad press, deserved or not.

We don't even try and use anything resembling a contract, if our QOS doesn't keep 'em here, neither will some contract so why even bother?

Originally posted by Simone
For my Italian customers I bill only the first payment in advance then most of my clients pay after 30 days.
Until now no problems, but I'm sure that if I allow it to outside Italy I will get problems.

:eek: odd statement you make, Italians are more forthright than say, Germans? or the French? just curious what sort of wierd prejudice brings about such a comment.