Billing Glossary
Subscriptions, invoicing, payments, and revenue-operations terminology
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ACH Payment
An ACH payment is a bank-to-bank electronic transfer routed through the U.S. Automated Clearing House network,
BillingAccount Statement
A summary document showing all billing activity—invoices, payments, credits, and balance—for a customer over a
BillingAdd-On
An add-on is an optional paid feature or service layered onto a base subscription to expand functionality, cap
BillingAnnual Recurring Revenue
Annual Recurring Revenue (ARR) is the normalized yearly value of your active subscription contracts, excluding
BillingAuthorize and Capture
A two-step card payment flow where funds are first reserved (authorized) and later charged (captured), giving
BillingAuto-Renewal
Auto-renewal is the billing mechanism that automatically charges customers and extends their subscription at t
BillingC
CAC Payback Period
The number of months it takes for gross profit from a new customer to repay the sales and marketing cost of ac
BillingChargeback
A chargeback is a forced payment reversal initiated by a cardholder's bank, pulling funds and fees out of your
BillingChargeback Dispute
A chargeback dispute is the formal process of contesting a customer's payment reversal by submitting evidence
BillingCredit Memo
A credit memo is a billing document that reduces what a customer owes, correcting overcharges, returns, or ser
BillingCustomer Churn Rate
The percentage of customers who cancel their subscription or stop buying during a given period, signaling rete
BillingCustomer Vault
A customer vault is a PCI-compliant storage system that holds payment credentials so your team can charge card
BillingD
Decline Recovery
The process of recapturing revenue from failed card charges through retries, updated payment methods, and cust
BillingDunning
Dunning is the structured process of recovering failed or overdue payments through automated reminders, retrie
BillingDunning Management
Dunning management is the structured process of recovering failed subscription payments through automated retr
BillingF
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Invoice
An invoice is a billing document that itemizes what a customer owes, when payment is due, and how to pay it.
BillingInvoice Adjustment
An invoice adjustment is a documented change to an issued invoice — credit, debit, or correction — that update
BillingInvoice Due Date
The date by which a customer is contractually required to pay an invoice in full before it becomes overdue and
BillingInvoice Line Item
A single row on an invoice representing one billable product, service, fee, or adjustment with its own quantit
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Net 30
Net 30 is a payment term giving the customer 30 calendar days from invoice date to pay the full balance with n
BillingNet Dollar Retention
Net Dollar Retention (NDR) measures how much recurring revenue you keep and grow from existing customers over
BillingNet Revenue Retention
Net Revenue Retention measures how much recurring revenue you keep and grow from existing customers over a per
BillingO
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Past Due Reminder
A past due reminder is an automated notice sent to customers whose invoices have crossed the payment deadline
BillingPayment Authorization
Payment authorization is the issuer's approval to hold funds on a customer's card or account before the charge
BillingPayment Capture
Payment capture is the step where an authorized card charge is finalized and funds move from the customer's ac
BillingPayment Gateway
A payment gateway is the service that securely captures card or bank details at checkout and routes them to th
BillingPayment Link
A payment link is a shareable URL that lets customers pay an invoice or purchase a product without logging in
BillingPayment Processor
A payment processor is the service that moves card and ACH transactions between your customer, their bank, and
BillingPayment Terms
Payment terms are the contractual rules dictating when and how your customers must pay an invoice after goods
BillingPayment Token
A payment token is a randomized string that replaces sensitive card data so your systems can charge customers
BillingPayment Void
A payment void cancels an authorized but unsettled card transaction before it posts, removing the charge witho
BillingPlan Downgrade
A plan downgrade is when a subscriber moves to a lower-priced tier with fewer features, seats, or usage limits
BillingPlan Upgrade
A plan upgrade is when a subscriber moves to a higher-tier plan mid-cycle, triggering proration, new entitleme
BillingProration
Proration is the math of charging or crediting a customer for only the portion of a billing period they actual
BillingQ
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Reactivation
Reactivation is the process of restoring a canceled or lapsed subscription so the customer resumes billing and
BillingRecurring Billing
Recurring billing is the automated, scheduled charging of customers on a fixed cadence for ongoing access to a
BillingRecurring Invoice
A recurring invoice is a bill automatically generated and sent to a customer on a fixed schedule for an ongoin
BillingRefund
A refund returns funds to a customer after a payment, reversing all or part of a previously captured transacti
BillingRevenue Churn
Revenue churn is the percentage of recurring revenue your business loses from existing customers over a given
BillingRevenue Contraction
Revenue contraction is the reduction in recurring revenue from existing customers through downgrades, seat red
BillingRevenue Expansion
Revenue expansion is the additional recurring revenue you earn from existing customers through upgrades, cross
BillingRule of 40
SaaS health metric where revenue growth rate + profit margin should equal or exceed 40% — a balanced trade-off
BillingS
Sales Tax
A consumption tax collected from buyers at the point of sale and remitted to state, county, or local tax autho
BillingSeat-Based Billing
Seat-based billing charges customers per user account, so revenue scales with how many people on their team ne
BillingSmart Retry
Smart Retry is logic that re-attempts failed card charges at optimized times to recover revenue lost to soft d
BillingStrong Customer Authentication
EU regulation (PSD2) requiring two-of-three authentication factors for most electronic payments, primarily enf
BillingSubscription Billing
Subscription billing is the automated process of charging customers on a recurring schedule for ongoing access
BillingSubscription Cancellation
The process and policies that govern how a customer ends an active subscription, including timing, refunds, an
BillingSubscription Pause
A temporary hold on an active subscription that stops billing and service delivery without canceling the custo
BillingSubscription Plan
A subscription plan defines the price, billing cadence, features, and limits a customer commits to when buying
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