Recurring invoicing: What are recurring invoices?

A woman uses a tablet to view a customer payment received from a recurring invoice.

Recurring invoices allow you to streamline your invoicing by sending the same invoice to the same client at regular intervals.

When your business offers the same products or services to clients at regular intervals, recurring invoicing is a great way to streamline your invoicing process.

What are recurring invoices?

A recurring invoice is when a customer orders the same products or services on a consistent basis, and you send the same invoice over and over. Usually, that is weekly or monthly, depending on how often they order. There’s no change to the information, products, services, or client information. The invoice is simply sent to the same recipient at those routine intervals.

How does a recurring invoice work?

From the client’s perspective, a recurring invoice is no different than receiving any other invoice. The client will receive the same invoice information that they received previously, but the invoice date will be adjusted to reflect the current invoice date. For example, if a customer orders the same five items from you monthly, you can set up a recurring invoice that goes out every month for those five items. Then, you won’t need to take the time to create a new invoice every month. You can simply copy the same invoice and send it to the client.

How to set up recurring payment processing.

You can choose to send invoices manually if you want, but many accounting programs can automatically send recurring invoices to simplify the process even more. You won’t even need to remember to send invoices; the software does it for you.

Knowing who needs to be billed and when can be a time-consuming process, and recurring invoices remove confusion and simplify your workflows.

To set up a recurring invoice, talk to the customer about a payment schedule and agreed frequency, such as weekly, monthly, quarterly, or annually. The accounting program will create a billing period for the customer and automatically send an invoice accordingly.

What is recurring billing vs recurring invoicing?

Recurring billing is charging a customer’s payment method according to a predetermined time frame. Many businesses that provide ongoing services and require immediate payment, such as subscription-based software, use recurring billing for their customers.

Recurring invoices, however, only distribute an invoice to a customer within a predetermined time frame. Invoices are best used for companies that purchase goods or services on credit and need to manage their receivables. A recurring invoice indicates that payment is due from the customer, and no payment is collected until the customer sends it to you.

Benefits of sending recurring invoicing.

Save time and money. Focus on your business instead of having to remember when to bill your customers.
Speed up payments. Send invoices at the same time every time, which helps your customers create a habit of paying consistently.
Improve your cash flow. Benefit from payments being deposited into your account on a regular basis.
Provide automated payment processing. Allow your customers to pay you automatically by having their credit card charged or bank account debited every time a recurring invoice is sent.

When to send recurring invoices.

The next question is when to invoice a customer with recurring invoices.

Recurring invoices work best when you offer exactly the same goods or services at regular intervals. Here are a few examples of goods and services that can benefit from recurring invoicing:

Equipment rentals
Subscription-based services
Monthly contracts
Maintenance service packages
Memberships

If there’s no change in the products or services your customers regularly need, your business is a good candidate for recurring invoicing.

Sign invoices online.

If your company requires customers to sign invoices, using an online signature can keep the process simple. When customers get their recurring invoices, they can simply use an online signature program like Adobe Acrobat to click the signature block and add their stamp of approval to show the invoice has been accepted.