Advanced Billing Invoices
Invoices are financial documents that represent a sale by a seller (merchant) to a buyer (customer). In Advanced Billing, invoices are issued for one of the following billing events: subscription signup, subscription renewal, prorated upgrades for immediate capture, and ad-hoc charges. Our invoices contain the following:
- Details about the merchant (contact and business information)
- Details about the customer (name, contact information and addresses)
- Line items detailing each item being sold (quantity and price)
- Discounts applied to each line item and the invoice as a whole
- Taxes applicable to each line item and the total tax being collected
- Totals and summaries for the entire sale
- An invoice status, including amount due or paid
- Payment history
Advanced Billing invoice example
Anatomy of an Invoice
The most important pieces of information on our invoices are the status, line items, discounts, taxes, and payment details.
The parts of an invoice
- Invoices seen by the customer are usually either Paid or Open (unpaid). The status area provides the current invoice status at-a-glance.
- See Invoice Statuses below.
- Invoices are primarily composed of line items.
- By default, each line item contains a name, description, service dates, quantity, unit price, and subtotal.
- You’ll see one line item on an invoice for each product and component on a subscription.
- Taxes levied on the subscription appear at the bottom of the invoice.
- Payments and other balance adjustments applied to an invoice, including any credits and prepayments, are shown in the Invoice History section.
Discounts on a line item derive from your coupons.
Coupons do not necessarily apply to every line items, as it’s possible to apply a restriction by product or component. Consequently, there is a “Discounts” box that enumerates the coupons applied. Each coupon is numbered, and each line item is denoted with a matching superscript number where the coupon applies.
Service credits will apply to an invoice and detract from the amount due.
Service Credit example
Some actions generate a credit on a subscriber account. A common example is a prorated downgrade.
Credits are captured in Credit Notes. A credit note is like a “reverse invoice” - it contains line items representing the amount credited to specific items (products and components).
When a subscriber has a credit balance at the time of subscription renewal, the available balance gets automatically applied to the renewal invoice. Credits reduce the invoice due amount, like a payment.
Credit notes themselves look similar to invoices, and will reflect whether they have been applied yet.
Credit Note example
In the image above, the top right indicates the credit note’s number and the number of the invoice to which it has been applied. It also shows the reason for the credit in the bottom right, and a breakdown of how much credit is left on this particular note.
See Credit Notes for more information.
Line Item Breakdowns
In certain cases, such as for components with more complex pricing schemes (such as stairstep, volume, and tiered) additional breakdowns may be needed to understand how the component was billed. These overviews will appear on both mid-period and renewal invoices.
Pricing Details of Mid-period Invoice example: Shows a component allocation made for 9 units with a tiered pricing scheme
Prepaid components will also populate a similar gray box titled “Prepaid Usage” that will illustrate how many allocated units were used, how many units are left (if rollover is enabled), and how many were used in overage. Note: this breakdown will only appear on renewal invoices which is when we assess overage amounts. Purchases of allocations will generate a mid-period invoice.
Prepaid Usage example: Shows a subscriber who has used 100 units of their allocated amount, and an additional 50 units at overage
The “Validations” component below has all 3 prepaid settings enabled. A quantity of 100 appears on the invoice to reflect the 100 units re-allocated at renewal.
Prepaid Usage example: Shows an expiration of 2 months per allocation, and has recurring allocations and rollover of units enabled
- A Draft invoice is a temporary status of an invoice in the middle of being composed. Draft status is usually seen on ad hoc invoices, before they are issued.
- A Pending invoice is one generated automatically that is still collecting charges before it is issued at the next normal renewal. An example is an invoice that represents mid-period prorations that are being accrued until the next billing.
- An Open invoice has been issued and is ready for payment, but has not yet been fully paid.
- A Processing invoice has had a payment initiated at the gateway but is still waiting to be verified. This is common in Direct Debit scenarios where payments can take up to 5 days for funds to be collected.
- A Paid invoice has been paid in full.
A Voided invoice has been voided by a merchant by moving it to the Void status. A voided invoice does not expect payment and does not affect revenue.
A Credit Note is created to offset the voided amount.
- A Canceled invoice is one that was open when the Subscription was canceled (whether through dunning or intentional cancellation). Canceled invoices are different from voided invoices in that they represent “uncollected amounts” for revenue purposes. Canceled invoices may be re-opened in the case of a reactivation.
This only applies to Automatic Collection invoices. Remittance Collection invoices remain open even after cancellation.
There are three methods for invoice collection: automatic, remittance, and prepaid.
- Automatic Collection: Advanced Billing attempts to collect payment automatically from a payment method on file (credit card or ACH) when the invoice is issued.
- Remittance Collection: Advanced Billing does not attempt to automatically collect payment. Instead, your customer remits payment on the invoice, often in the form of check or bank draft, in response to receiving the invoice.
- Prepaid Collection: Advanced Billing collects an initial prepayment which is used to fund a usage-based subscription. Further usage will pull from the prepayment balance until it reaches $0 and suspends, or auto-replenishes. The renewal invoice is marked as ‘automatic’.
The default collection method is controlled in your site’s invoice settings. The collection method may also be set on a per-subscription basis from the subscription summary page.
To change an individual subscriptions payment method after signup, please follow the steps below:
- In the subscription summary page, on the line item Payment Method select “Change”
- While viewing Edit Payment Method, you will be prompted to toggle between Automatic and Manual.
The exception to this are prepaid subscriptions. A prepaid subscription cannot have its collection method changed, and subscriptions with other collection methods cannot change to prepaid.
For invoices that are in the open or canceled status, you may shift the payment method from automatic to remittance. When viewing an invoice that falls into one of these categories, select More Options -> Change Collection Method.
Change an invoice's collection method from automatic to remittance
This workflow is not available for invoices that are consolidated, and cannot change a remittance invoice to automatic.
When Invoices Are Generated
Invoices are generated for all billing events in Advanced Billing. There are two classes of generation: automatic and manual.
Automatic Generation of Invoices
Advanced Billing generates invoices for the following billing events:
- Signup: When a new subscription starts.
- Renewal: When an existing subscription periodically renews.
- Prorated upgrades for immediate capture: When a prorated upgrade is made and immediate capture of the due amount is desired, an invoice is generated and issued for the upgrade.
- Prorated upgrades for delayed capture: When a prorated upgrade is made and capture of the due amount is delayed, the upgrade charges added to a pending invoice (either an existing one or a new one as necessary). The pending invoice is issued when normal renewal occurs.
Note that prorated downgrades generate a Credit Note (like a “reverse invoice”) that is applied against subsequent invoices.
Manual Generation of Invoices
You may manually create your own ad hoc invoice.
Issue Date and Due Date
Invoices advertise two main dates, the issue date and the due date.
- Issue date is the date the invoice is made available for payment. This happens after all line items have been added and the invoice is not expected to change after this date.
- Due Date is the date the invoice payment is due.
The due date field may be controlled for renewals through the Net Terms functionality, and optionally for remittance signups. This means payment won’t be attempted until the specified date and dunning will follow if the payment fails. When creating Ad Hoc Invoices, you may set a due date of your choice.
Invoices and Dunning
The important thing to remember is that each invoice has its own payment collection method. As an example, let’s say a subscription is set to remittance billing upon sign up. The first invoice generated, INV-A, is treated as remittance. Then, soon after, the subscription is changed to automatic while INV-A is still not paid.
When the next renewal comes around, if the payment fails for INV-B, the subscription is pushed into dunning. This customer would only be responsible for paying INV-B to return to an active state. This is because invoice A is remittance and is not included in the count of open automatic invoices.
Automatic invoices may be modified to remittance through an option that appears on the invoice. For more information, please review the payment collection section above.