Billing Cycle

AAA

DEFINITION of 'Billing Cycle'

The interval of time during which bills are prepared for goods and services that a company has sold. A billing cycle is recurring and is most often set to repeat on a monthly basis. For example, a company may send bills out on the first day of the month for services provided the previous month.

INVESTOPEDIA EXPLAINS 'Billing Cycle'

Billing cycles guide companies on when to charge customers and help businesses estimate how much revenue they will receive. They also enable internal departments, such as accounts receivable, to monitor how much revenue has yet to be collected. The recurring cycle also lets customers know when they can expect to be charged.

The date at which the billing cycle begins depends on the type of service being offered and the customer’s needs. For example, an apartment complex may send a bill for rent on the first of every month, regardless of when tenants had signed their individual leases. This style of billing cycle can make accounting easier, as well as making the payment due date easier for tenants to remember. Companies may also choose to use a rolling billing cycle. A cable provider may set a customer’s billing cycle to align with when that customer began service.

RELATED TERMS
  1. Architecture Billings Index - ABI

    A leading economic indicator of demand for commercial and industrial ...
  2. Progress Billings

    A series of invoices prepared at different stages in the process ...
  3. Cycle Billing

    The practice of billing different customers based on a scheduled ...
  4. Deferred Billing

    The act of charging buyers for their purchases, without interest, ...
  5. Country Club Billing

    A now-defunct billing system used by credit card companies up ...
  6. Double-Cycle Billing

    A method used by creditors, usually credit card companies, to ...
Related Articles
  1. Credit & Loans

    What's the difference between a grace period and a moratorium period?

    Find out what grace periods and moratorium periods are, what you have to do to get them and how they can benefit your financial situation.
  2. Delivery duty paid (DDP) is a shipping term.
    Investing

    What does DDP Mean?

    Delivery duty paid (DDP) is a shipping term specifying that the seller is responsible for all costs associated with delivery of the goods to the buyer. It is usually used when goods are exported ...
  3. Fundamental Analysis

    What is a good interest coverage ratio?

    Learn the importance of the interest coverage ratio, one of the primary debt ratios analysts use to evaluate a company's financial health.
  4. Fundamental Analysis

    What is a bad interest coverage ratio?

    Understand how interest coverage ratio is calculated and what it signifies, and learn what market analysts consider to be an unacceptably low coverage ratio.
  5. Active Trading Fundamentals

    What is liquidity risk?

    Learn how to distinguish between the two broad types of financial liquidity risk: funding liquidity risk and market liquidity risk.
  6. Technical Indicators

    What is a good gearing ratio?

    Understand the meaning of the gearing ratio, how it is calculated, the definition of high and low gearing, and how they reflect relative financial stability.
  7. Investing Basics

    What is considered to be a bad gearing ratio?

    Understand the basics of gearing, including the net gearing ratio, what constitutes a bad gearing ratio and how this figure reflects financial stability.
  8. Active Trading Fundamentals

    What does the gearing ratio say about risk?

    Find out why lenders and investors pay close attention to a firm's gearing ratios, and why both too much and too little borrowing can be risky.
  9. You may owe money, but you still have rights. There's a long list of things debt collectors are banned from doing to you. Know what's illegal.
    Credit & Loans

    5 Things Debt Collectors Can't Do To You

    You may owe money, but you still have rights. There's a long list of things debt collectors are banned from doing to you. Know what's illegal.
  10. Fundamental Analysis

    What is the difference between a capital gearing ratio and a net gearing ratio?

    Understand the definition of gearing in the finance industry, the difference between net gearing and capital gearing ratios and how they are interpreted.

You May Also Like

Hot Definitions
  1. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  2. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  3. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  4. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  5. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  6. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
Trading Center