# Recurring Billing

> Recurring billing means automatically invoicing and collecting payment from customers at set intervals for goods or services they continue to receive.

- **URL**: https://dodopayments.com/glossary/what-is-recurring-billing

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## What is Recurring Billing

Recurring billing means automatically invoicing and collecting payment from customers at set intervals for goods or services they continue to receive. Instead of a one-time charge, the customer is billed repeatedly according to the plan they picked.

For example, $29/month or $299/year.

## How Recurring Billing works

- The customer chooses a subscription plan and provides payment details (card, bank, UPI, etc.).

- Business defines the billing cadence; monthly, quarterly, annual, or custom.

- On each renewal date the system generates an Automated invoice or charges the payment method automatically.

- A payment gateway or processor authorizes and captures the payment.

- On success the system updates the account, sends a receipt, and grants continued access.

- On failure, dunning rules run and the account status may change if payment isn't recovered.

- Upgrades/downgrades trigger proration (only pay for the used portion); cancellations stop future billing. Integrations keep CRM and accounting in sync.

## Recurring Billing Benefits

- **Predictable revenue:** Easier cash-flow forecasts and growth planning.

- **Lower friction for customers:** No need to re-enter payment info every renewal.

- **Better customer lifetime value (LTV):** Recurring relationships tend to increase retention and revenue per customer.

- **Scalability:** Automation removes manual invoicing work as you grow.

- **Improved analytics:** Track MRR, ARR, churn, and other subscription metrics in near real time.

## Recurring Billing Examples

- **SaaS:** A team collaboration tool charges $12/user/month and bills automatically on the signup anniversary.

- **Media:** A streaming service charges $9.99/month and renews subscriptions automatically.

- **Membership:** A gym bills members quarterly for class access and facilities.