May 15, 2014
Written by
James Davis
Written by James Davis
Senior Technical Writer at United Thinkers

Author of the Paylosophy blog, a veteran writer, and a stock analyst with extensive knowledge and experience in the financial services industry that allows me to cover the latest payment industry news, developments, and insights. Read more

Reviewed by
Kathrine Pensatori
Product Specialist at United Thinkers

Product specialist with more than 10 years of experience in the Payment Processing Industry. I help payment facilitators and PSPs solve their various payment processing issues. Read more

Most Suitable Billing System Model

Nowadays it becomes more and more evident that recurring billing goes far beyond simply charging certain amounts of money from customers at regular time intervals. Any recurring billing company wishing to select the most suitable billing system model to implement, must carefully analyze its particular needs and tasks the system is intended to fulfill. These needs can range from payment plan creation and cancellation to various kinds of payment plan adjustments, from revenue forecasting and billing activity analysis to declined credit card transaction recycling and different types of collections.

Some companies represent simple online recurring billing businesses, some use sales personnel and conduct physical sales of products and services, while some others need to implement collections process on top of that. It is obvious, that recurring billing related needs of these companies are going to be different, and, consequently, the features to be implemented in their recurring billing systems will also vary.

Architecture of Billing System

Architecturally, a recurring billing system can be based on one or several fundamental entities. The concept of a payment plan, for example, has to be present in all recurring billing systems. In some systems, where payment plan adjustments are common a concept of invoice is utilized in order to enable the companies to implement these adjustments. Still another category of recurring billing businesses is dealing with customers who can use several payment plans and often introduce adjustments. In order to forecast revenues and analyze billing activity in such an environment, a concept sometimes referred to as charge is introduced into their recurring billing systems to denote payments that must be charged in future.

More detailed information on the classification of companies according to their recurring billing needs and on different conceptual types of recurring billing systems can be found in a respective article on paylosophy.com web-site.

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