Billing cycles

Ever wonder why there’s such a big gap between when you bill your customers and when you actually see the money? You’re not alone. The Billing Cycles report helps you understand exactly when your charges turn into actual revenue - and why those timelines can vary so dramatically across your customer base.

What makes this report different

While most financial reports focus on how much money you’re making, Billing Cycles shows you something equally important: when you’ll actually get paid. It’s the difference between “Customer A owes me $50” and “Customer A will pay that $50 in exactly 17 days.” This timing insight is crucial for everything from cash flow planning to customer support conversations.

Report components

Your payment timeline at a glance

Right at the top, you’ll see your “Typical days until paid” - the average time between billing and payment across your entire customer base. This number is gold for financial planning, but don’t let it fool you. As you’ll see in the visualization below, individual customers can vary widely around this average.

The timeline visualization

The heart of the report is a detailed view of every customer’s billing pattern:

• The left dot shows when you create a charge through the Shopify Billing API
• The blue line represents the waiting period (your accounts receivable)
• The right dot indicates when the merchant actually pays through their Shopify billing cycle

This visualization often creates an “aha moment” for app partners - it’s the first time they can actually see how billing cycles interact across their entire customer base. Those varying blue lines tell a powerful story about the complexity of Shopify app billing.

Understanding your numbers

Why payment timing varies

The time between billing and payment isn’t random - it’s determined by three key factors:

1. Shopify billing cycle timing
   • Every merchant has their own 30-day Shopify billing cycle
   • Your app charge joins their next available billing cycle
   • A merchant who subscribes the day after their cycle renews will wait nearly 30 days
   • A merchant who subscribes the day before renewal might pay tomorrow
2. Payout windows
   • Shopify processes payouts twice monthly:
     • First window: Payments collected from the 1st through the 15th
     • Second window: Payments collected from the 16th through month’s end
3. Settlement period
   • After each payout window closes, there’s a 5 business day settlement period
   • This means even after a merchant pays, you’ll wait a few more days to see the money

Reading the patterns

The visualization helps you spot important patterns:

• Clusters of right-side dots often indicate merchants on similar Shopify billing cycles
• Very short blue lines represent customers who subscribed just before their billing cycle renewed
• Long blue lines show customers who’ll wait longer for their first payment
• Consistent patterns month over month help predict future payment timing

Making the most of this report

For financial planning

The Billing Cycles report is your crystal ball for cash flow:

• Use the average days-until-paid for rough cash flow modeling
• Look for patterns in payment timing to better predict revenue availability
• Understand how new subscriptions will affect your short-term cash position
• Plan around the bi-monthly payout schedule for more accurate forecasting

For customer support

When merchants have billing questions, this report has answers:

• Quickly look up individual merchants to understand their specific billing timeline
• Explain why charges might appear after cancellation
• Help merchants understand when payments will actually process
• Set clear expectations about billing dates versus payment dates

Pro tips

Get more value from your Billing Cycles report with these strategies:

1. Smart filtering
   • Use segments to analyze payment patterns across different customer groups
   • Sort by app billing date to understand your charge creation patterns
   • Sort by Shopify billing date to see payment clustering
2. Pattern recognition
   • Watch for merchants with unusually long payment delays
   • Identify groups of merchants on similar cycles
   • Use historical patterns to predict future payment timing
3. Cash flow management
   • Consider payment timing when planning major expenses
   • Factor in the payout window and settlement period for accurate forecasting
   • Use the average days-until-paid as a conservative planning metric

Remember: Just because you billed a customer today doesn’t mean you’ll see that money right away. The Billing Cycles report helps you understand exactly when charges turn into cash - making it easier to plan your business and support your customers effectively.

Need help making sense of your billing patterns? Our team is here to help you get the most out of this report.