Recurring Revenue to Cash: manage subscription billing and payment

Use this workflow for an ongoing agreement with repeated billing. It connects the agreed plan and billing dates to each invoice, payment, and the next cycle; a missed or disputed cycle needs an owner before the next billing date.

Where this workflow fits

This workflow is useful for subscription sellers, service businesses, replenishment programs, and firms collecting recurring payments by direct debit. The customer agreement starts this cycle. Invoices and payments feed the regular AR and banking work; changes feed the next billing cycle.

Featured capabilities

• Subscriptions and Recurring Billing: Set up the agreement and review the next billing date.
• Invoicing & Accounts Receivable: Review invoices, credits, and open balances.
• Banking & Reconciliation: Match payments against bank activity.
• Cash Collection: Work open customer balances.

People and preparation

The commercial owner and billing team need the customer agreement, subscription service lines, billing frequency, start and stop dates, price and taxes, payment terms, and any direct-debit authorization. Agree who handles changes and customer communication.

Process areas and stages

1. Define the recurring commitment

   Owner: Sales or billing. Input: Customer agreement.

   Work and decision: Set up the subscription plan, customer agreement, billing frequency, start date, products or services, and payment terms. Confirm what repeats and when, including the service period and any limits. Record the terms in the subscription arrangement and verify the first billable date with the customer.

   Evidence and handoff: Subscription plan or contract order gives billing the agreed schedule.

2. Approve activation

   Owner: Billing and customer account owner. Input: Draft subscription.

   Work and decision: Review the subscription before activation. Confirm pricing, taxes, payment method, and any required direct-debit mandate. Check price, tax, payment terms, and customer consent. For direct debit, obtain and verify the mandate through the supported process before relying on that collection method.

   Evidence and handoff: Approved active subscription and payment arrangement are ready for the cycle.

3. Bill the cycle

   Owner: Billing. Input: Next billing date and active agreement.

   Work and decision: Create the next subscription invoice from the contract order for the billing cycle, then review it before posting or sending it to the customer. Check the invoice against the service actually due. Account for amendments, pauses, or end dates before posting or sending; do not assume a future invoice was created merely because the plan exists.

   Evidence and handoff: Posted or prepared invoice and updated next-invoice date hand off to the customer and AR.

4. Collect and reconcile

   Owner: Accounts receivable and finance. Input: Open invoice and customer remittance.

   Work and decision: Collect and apply payment through the agreed method, then reconcile the bank activity. Follow the agreed payment method, apply the receipt to the correct invoice, and match bank activity. A submitted direct-debit instruction is not proof that cash settled.

   Evidence and handoff: Invoice payment status and reconciliation establish the cash outcome.

5. Resolve a cycle exception

   Owner: Account owner and billing. Input: Failed payment, dispute, amendment, or cancellation.

   Work and decision: Investigate a failed payment, disputed invoice, plan change, pause, or cancellation before the next billing cycle. Contact the customer about the cause and approved next action. Change the subscription and invoice records only for the effective period, and keep disputed balances visible for collections.

   Evidence and handoff: Recorded exception, corrected agreement if appropriate, and follow-up owner return to the next cycle.

6. Review the portfolio

   Owner: Billing and finance. Input: Active plans and open balances.

   Work and decision: Review recurring revenue and open balances to identify customers who need collection follow-up or commercial review. Compare the next billing dates with invoices and unpaid amounts. Escalate missing billing and chronic nonpayment before the following cycle, without conflating scheduled revenue with collected cash.

   Evidence and handoff: Current plan, invoices, and assigned exceptions support the next run.

Variations and exceptions

A plan change, pause, or cancellation is effective according to the customer agreement. Review already issued invoices separately; do not silently revise prior billing history.

Completion and review

Each active subscription has a current billing record, payment status, and next billing date. Exceptions are resolved, deferred, or assigned before the next run.

Related workflows

• Order to Cash: from accepted order to payment
• Weekly AR Cash Management