What is a Good Billing Frequency for your SaaS Business?

By the end of 2019, we expect to see 60 million visitors to subscription sites.

To achieve successs in your Software as a Service (SaaS) or subscription-based business, it is critical make sure that your billing methods do not hinder your growth. Here are the 4 primary billing frequencies that have been successfully used by many leading subscription service businesses. Remember that, eventually, you are responsible for choosing the best plan that works for you and satisfies clients.

4 Most Popular Billing Frequencies

These are the four major billing frequencies used by many successful businesses. As a SAAS businessman, you offer a subscription-based product. You will need a reliable subscription management software that features a viable billing structure. If you don’t work to automate payments with such modern tools, your growth will be hampered. Not only is subscription billing complex but there are various compliance related issues that makes it almost impossible to do manually, or without the right tools, at scale.

Here are 4 highly recommended billing frequencies that are widely used.

Weekly or Bi-Weekly

A weekly billing frequency is ideal for businesses with regular product deliveries like daily newspapers, magazines and food.  Many SAAS businesses are, however, reluctant to deploy this model. This is because some clients often feel they are overcharged in comparison with the monthly and yearly plan.

The advantage to weekly and bi-weekly billing  is the steady cashflow that can provide operational and marketing flexibility.

However, invoicing at a higher frequency, like every two weeks, can make subscription management tedious. The number of weeks in each calendar month may vary, so it can be challenging to implement. Many companies rarely offer bi-weekly payment plans, and whenever they do, few discounts are offered. This disappoints customers.


Monthly billing is more commonly used than weekly and bi-weekly plans. For many long- cycle customers this is deemed as an efficient billing strategy. Many leading businesses use this billing plan. These include software, membership and public corporations. A major downside with monthly billing is that it comes with relatively high costs to clients. Most customers, therefore, tend to prefer the annual billing cycle.

Quarterly or Bi-Monthly

This type of billing plans are popular with utility companies and insurance companies that choose to bill customers every 2 or 3 months. The reason for this choice may lie in the fact that usage surges when customers are invoiced less frequently. So this type of billing is prevalent in companies that charge on a usage based structure.


Millions of businesses around the world favor the annual billing cycle. It reduces customer churn since customers have locked in the pricing for a year under their annual contracts. Transactional costs can also be lower since there is just a single transaction per year. The only issue with this billing frequency is that some clients may default on payment once the subscription is over. To prevent this, it is advisable to inform the clients before their upcoming renewal schedule.

Finding a Suitable Billing Model

You need a billing frequency that strikes a balance between your business interests and the customers’ needs. Remember, good subscription management and automation is the backbone of any successful SaaS business. Finding the right billing frequency will help to grow your business and boost subscriptions to your product, increasing your customer base.  What is more, it also caters for your clients’ basic requirements.

That said, it is best to implement a monthly or yearly billing cycle for your SAAS business. This way, your client gets value for his money, and you retain her longer. You could also deploy a hybrid version of these plans–a monthly cycle could be the trial period; it gives your client time to evaluate your service and decide whether it works for him. If they find your service suitable, they are likely to renew subscription with the annual plan.  A win-win situation for both you and the customer.