How billing works
A billing system turns a commercial agreement into amounts due. For each customer, the same steps repeat every period:
- Pricing: the plan, quantity, discounts and tax that apply to the account
- Calculation: fixed fees, metered usage and prorated changes for the period
- Document: an invoice or a receipt, numbered and sent to the customer
- Collection: a card charge, a direct debit, or a bank transfer that is awaited
- Recovery: retries and reminders when a payment fails
- Records: entries in the ledger, matched against the money received
Billing and payments are separate jobs
The billing system knows what to charge and when. The payment gateway knows how to charge: the gateway holds the tokenised card or the direct debit mandate, sends the transaction and reports the result.
The two talk through an API. Billing sends a charge request with an amount and a reference, and the gateway answers with an approval, a decline or, later, a refund or a chargeback that billing has to reflect.
Why billing matters to a payments product
Merchants ask a payment provider for more than acceptance: subscriptions, invoices with a payment link, retries. Each is a billing feature built on the same stored credentials and the same ledger.
A charge raised by the billing system while the customer is away is a merchant-initiated transaction, a category with rules of its own on consent and authentication.
Billing, invoicing or payment processing?
- Invoicing
- One step of billing: issuing the document that states what is owed. Billing also covers pricing, collection and recovery.
- Payment processing
- Moves the money once the amount is known. A payment processor does not decide what a customer owes.
- Accounts receivable
- The accounting view of the same amounts: what has been billed and not yet paid.
Where Billing shows up in a platform
Modules that do the work
- CheckoutA hosted checkout for cards, wallets, bank payments and crypto, routed to the best provider.
- Card acquiringCard acceptance on the phone, in store and online, through the acquirer you choose.
- LedgerThe double-entry book of record behind every balance, fee and transfer.
- NotificationsEmail, SMS, push and in-app messages in your brand, through the providers you choose.