An essential aspect of running any business, regardless of size, private or public, is billing. Without it, your cash flow would dry up, and the company won’t grow.
That’s why we’re breaking down our billing process; in this blog, Pelcro: Billing 101 Pt.2, we’re going to help you navigate the “Subscriptions” page, as well as guide you through the “Invoices” under “Billing” in the toolbar.
Billing 101 – Subscriptions
A subscription is an object that allows you to set up and control a billing schedule ahead of time-based on the settings configured in the plan you create said subscription with. Each subscription creates one or more invoices based on the plan settings, which, in turn, will let you set up recurring invoices for your customers.
Creating a New Subscription
From the toolbar, go to “Billing” > “Subscriptions.” This will redirect you to the main “subscription” page where, as a user, you can view all existing subscriptions from customers and create new ones.
On the Subscriptions page, click on the “New” button on the page’s top right-hand side. This will prompt you to select an existing customer in order to create a new subscription for them.
Once you select a customer, you will be required to choose the existing product your customer will be subscribing to. Once the product is selected, you can add a coupon to apply a discount and either edit or remove the trial period for this subscription. Once you have chosen the plan/product, you will see the view below.
***Note: If you have the Gift feature and the customer wishes to gift a subscription to another customer, you will need to fill out the fields under the ‘Gift’ section. If the subscription is not a gift, you can disregard this section.
You will then need to fill out the Payment Method, which will allow you to select your preferred payment methods. (ie. Credit card payment, Offline payment, or invoice the customer.)
Finally, you can activate the subscription by clicking on the blue “Start Subscription” button.
Navigating the Subscriptions Page
When you open up your subscription page, you’ll see all your available subscriptions.
“Search” button: The search button lets you search for subscriptions based on the customer’s name, email, or phone number.
“New” button: This allows you to create a new subscription.
“Export” button: Lets you export the data in tables to your email in CSV format.
Updating your Subscription
Update the Subscription Address
To update the details of a subscription, click on the three dots “…” aligned with the subscription you want to modify, then click on “Update Subscription.” You can then update the details you want before clicking on “Update Subscription” to complete the process.
Edit Shipments Remaining
To update the remaining shipments of a subscription, click on the three dots “…” on the same line with the subscription you want to update, followed by “Edit Shipments Remaining.” You can then update the details you wish to modify and then click on “Update Subscription” to complete the process.
Changing your Plan
To change the plan associated with a subscription will first require you to cancel the customer’s current subscription and issue them a pro-rated refund on their subscription (or a full refund, depending on your company policy). By issuing the refund into the customer’s balance, you can use it for the new subscription that they’re switching to.
Subscription Lifecycle
Subscription-Related Notifications
You’ll find that Pelcro has a notification for every activity that happens with a subscription or invoice. The notification that will be sent will depend on the type of subscription associated with it. For example, subscriptions paid automatically via credit card will have different notification settings than those paid manually by sending an invoice to the customer every billing cycle.
Other options, such as creating subscriptions that offer a trial period, will also change the notifications sent.
Some notifications are sent immediately when a subscription is created, while others recur on regular billing intervals.
A “customer.created” notification is sent when a customer record is successfully created.
A “subscription.created” notification is sent to indicate that a subscription has been created.
An invoice is drafted and then finalized before a charge attempt is created. The “invoice.created” notifications are sent when the invoice is issued for the first billing period.
A “charge.succeeded” notification is sent out to let you know when a customer’s payment method is charged successfully.
After this first invoice, the following cycle of notifications repeats every billing period:
When the subscription period elapses, an “invoice.created” notification will be sent out to indicate the creation of a draft invoice.
About an hour after the invoice is created, it is finalized (changes will no longer be permitted). A charge is attempted, and a “charge.succeeded” notification indicates that the payment was successful.
A “charge.succeeded” notification is sent out when an invoice is marked paid.
Cancelling a Subscription
To cancel a subscription, click on the three dots “…” then on “Cancel Subscription.” Confirm your cancelation and finally click on “Cancel Subscription” to complete the cancelation.
Manage Failed Payments
When a credit card payment associated with a subscription invoice fails, Pelcro’s system will automatically attempt to recharge the credit card based on the rules configured on Stripe. This will give you the flexibility to configure the following from Stripe.
The retry payment schedule
Email notifications
Modifying the subscription status when all retries fail (leave subscription as is, cancel it, or mark it as unpaid)
Modifying the invoice status (leave as is, or mark as uncollectible)
Billing 101 – Invoices
An invoice is a statement that defines the amounts due by the customer. An invoice can be a one-off or recurring, generated by a subscription. The invoice typically contains the amount owed, as well as any taxes, credit notes, line items, etc.
Navigating the Invoices Page
The Invoice page should look like the image below.
“Search” button: This button will let you search your database for invoices based on invoice Number and Customer Email.
“Export” button: This button, found on the top right-hand side of the page will export the data in tables to your email.
Here’s a brief description of all the tabs you’ll see at the top of the page.
Invoice Details: If you wish to view the invoice’s details, click on the three dots “…” followed by “View Invoice.” This will lead you to the invoice page, where you can see said details.
Customer Details: If you want to see the customer details for a specific invoice, click on the three dots “…” followed by “View Customer.”
Subscription Details: If you wish to view the subscription, click on the three dots “…” followed by “View Subscription.”
Uncollectible Invoices
Admin account holders can activate the uncollectible feature, which allows them to mark invoices as uncollectible. You can set these based on whether the invoices are past due by a set number of days that you can configure in Pelcro’s settings.
***Note: All related subscriptions will be canceled immediately.
Invoice Lifecycle
Paid Invoices: “Paid” applies to invoices that are paid. Invoices are automatically marked as paid when payments are processed through Stripe, though you can manually mark invoices as paid to reflect out of hand payments.
Voiding invoices: To cancel, delete, or effectively undo an invoice that has already been finalized, you can void it. Voiding is similar to deleting an invoice but maintains a record of when it was created, finalized, then voided. Invoices with a void status are not payable. Voiding an invoice effectively zeros its amounts in any reports, ensuring an accounting paper trail.
Uncollectible invoices: Sometimes customers can’t pay your invoice—for example, perhaps they declare bankruptcy and cannot pay their debts. Uncollectible invoices can be treated as “bad debt” in your accounting books.
Workflow transitions
Online Invoice Lifecycle
Invoices that are automatically paid will have the following lifecycle:
A status=draft invoice is created and an invoice.created notification is sent.
About an hour after creation, the invoice is finalized (changes are no longer permitted) and an invoice.finalized notification is sent. The invoice’s status is open, and Pelcro’s system will automatically attempt to pay it using the default payment method.
Suppose the payment is successful, an invoice.payment_succeeded notification is sent, and the invoice’s status field will show up as paid.
If the payment fails or the customer does not have a valid payment method, an invoice.payment_failed notification will be sent; the subscription becomes past_due if the subscription’s status is not incomplete, and the invoice’s status field remains open.
In this flow, Pelcro’s system won’t notify the billed customer about the invoice. An automatic payment is attempted on the invoice shortly after it is generated. However, the customer receives an email receipt if you have that feature enabled.
Offline Invoice Lifecycle
Manually paid invoices have a slightly different lifecycle:
A status=draft invoice is created with a set due date, and an “invoice.created” notification is sent.
About an hour after creation, the invoice is finalized (changes will no longer be permitted), and the status of the invoice changes to “Open.”
At some later point, the customer pays the invoice by sending an ACH credit transfer or by cheque before the invoice is marked as paid. An “invoice.payment_succeeded” notification is then sent, and the invoice’s status field will change to paid.
If the customer does not pay the invoice before the due date or sends an amount that isn’t automatically reconciled, the subscription will then change to past_due, a customer.subscription.updated notification is sent while the status field remains open.
Food for Thought
At Pelcro, our mission is to provide our clients with all the tools and expertise they need to drive recurring revenue effectively, built with developers in mind for ultimate flexibility.
In Part 1 of this guide, we broke down how to set up products and plans on Pelcro’s platform; while part 2 covered cover setting up subscriptions and Pelcro’s invoicing process. With this, you’re now equipped with the knowledge to get started with your free trial and set up your own products on Pelcro’s platform.