Multi-Frequency Billing

Overview

Traditional subscription billing models require all recurring items in a subscription to share the same billing frequency. However, in many subscription businesses today, the core product and its associated addons are priced and billed on different billing frequencies. For example, a base plan may be sold on an annual commitment, while addons such as support, usage, or feature upgrades are better suited to monthly or quarterly billing.

Multi-Frequency Billing lets you sell a single subscription with multiple recurring items, each billed on its own billing frequency. With this feature enabled:

• Each recurring addon is billed on its own billing cadence, not based on the plan’s frequency.
• Multi-Frequency Billing introduces multiple billing schedules within a single subscription. However, invoicing, payments, and dunning continue to operate at the subscription level, not at the individual addon or plan level.
• The subscription remains unified, eliminating the need to create multiple subscriptions for each addon.

Why use Multi-Frequency Billing?

You can use Multi-Frequency Billing if your business:

• Sells long-term commitments with flexible addons.
• Charges usages or overages more frequently than the base plan.
• Prefers operational simplicity over subscription sprawl.
• Wants accurate churn metrics.

The following scenarios highlight where this billing model provides the most value:

Sell addons on flexible billing frequencies

Multi-Frequency Billing makes it easy to cross-sell addons that bill more frequently than your core product, without changing or renegotiating the base subscription. This is ideal when:

• Your core product is sold annually.
• Addons are upgradeable, or removable at any time.
• You want to reduce friction for upsells while increasing expansion revenue.

Single Subscription

├── Plan (Annual) ─────────────► Invoiced yearly
├── Addon (Monthly) ──────────► Invoiced monthly
├── Addon (Quarterly) ────────► Invoiced quarterly
└── Metered Addon (Monthly)──► Usage invoiced monthly

Example

Acme Inc. sells a Campaign Management plan, billed annually for $12,000, and an AI Insights addon, billed monthly for $200.

With Multi-Frequency Billing:

• The Campaign Management plan is billed once per year.
• The AI Insights addon is billed every month.
• Customers can add or remove the AI Insights addon anytime, without affecting their annual commitment.

Bill usages in advance without breaking annual contracts

If your base plan is annual but usage-based charges vary month to month, collecting such usage-based charges or overages only during renewal can impact cash flow and create large, unexpected invoices. With Multi-Frequency Billing, you can:

• Keep the base plan annual.
• Attach monthly metered addons for usage or overages.
• Invoice and collect usage charges monthly.

Example

A B2B API platform offers a Base plan that includes 10,000 API units per year billed annually, and Overages are charged based on monthly usage.

Using Multi-Frequency Billing:

• The annual plan renews yearly as usual.
• Monthly API overages are tracked and billed every month via a metered addon.
• Customers get predictable billing, and you avoid large surprise invoices at renewal.

This keeps cash flow steady and makes usage-based pricing much easier to manage.

Keep churn and subscription metrics accurate

A common workaround for mixed billing frequencies is creating multiple subscriptions for the same customer, one annual and the others monthly. This leads to:

• Duplicate operational work.
• Subscriptions cancellations to discontinue addons showing up as customer churn.
• Inflated subscription metrics.

Multi-Frequency Billing avoids this by keeping everything under a single subscription.

Before

Customer
├──Subscription A (Annual Plan)
└──Subscription B (Monthly Addon)

After

Customer
└── Single Subscription
     ├── Annual Plan
     └── Monthly Addon

Removing an addon does not cancel the subscription, keeping churn and retention metrics clean. Churn from addon is not ignored but reclassified.

Understanding Multi-Frequency Billing

Multi-Frequency Billing is designed for businesses that need to combine long-term subscriptions with flexible, independently billed addons or usage charges. The following are some key concepts around Multi-Frequency Billing explained in detail for your understanding:

Billing schedules

Billing dates are driven by each recurring item’s own billing period.

• The plan invoices on its cadence (for example, yearly).
• Each addon invoices on its own cadence. (for example, monthly, or bi-weekly).
• Items due on the same date are bundled into a single invoice.

This differs from plan-based billing, where the plan’s frequency determines the subscription’s billing schedule.

Example 1: Annual plan with a bi-monthly addon

Subscription start date: January 1, 2024.

Here’s how invoices are generated:

Example 2: Annual plan + monthly addon + quarterly addon

Subscription start date: January 1, 2024.

Here’s how invoices are generated:

Addon compatibility with a plan

When creating or updating a subscription, Chargebee validates that addons are compatible with the selected plan. The validations include:

• Currency match: The plan and addons must be priced in the same currency.
• Billing frequency compatibility:
  • An addon’s billing period must be less than or equal to the plan’s billing period.
  • The addon's billing frequency is a divisor of the plan's billing frequency.

The following table illustrates this:

Editing the next billing date

The plan’s next billing date acts as the anchor date for the subscription. When you edit the plan’s next billing date:

• All existing and scheduled recurring addons are realigned to that date, so that the plan and addons renew together.
• Proration charges or credits are generated if proration is enabled.

This ensures a single consolidated invoice at renewal.

When the next billing date is extended

When the plan’s next billing date is extended, for example, from April 1, 2024, to May 15, 2024(about 45 days), the billing terms of all existing addons are recalculated to align with the plan’s updated renewal date.

This alignment will make the invoice consolidated on the Plan Renewal. Otherwise, Plan & each Addon will renew independently on different timestamps.

The above diagram illustrates the add-on terms aligning to the extended Plan’s Term period.

On extending the next billing date, each Addon either needs to stretch/shrink its current Term so that on Subscription Renewal, all the items in the Subscription will renew together and a single consolidated invoice will be raised. The same approach of aligning with the Subscription renewal is followed while adding any new addon to the existing Subscription.

The alignment is calculated by assuming all the Addons end along with the updated Renewal timestamp and backtracking the term until the term overlaps with the current timestamp.

On following the alignment approach, the first bar in the above diagram depicts the calculated Addon Term that falls for the extended period in our case i.e. 15 May 2024. Hence, the current Addon Term is extended till the respective calculated Addon Term-end.

For the extended period, the Proration is applied, if passed in the input and the invoice will reflect the prorated charges.

When the next billing date is reduced

When the plan’s next billing date is moved earlier, for example, from April 1, 2024 to March 10, 2024(about 20 days), the existing addon terms are again adjusted to align with the updated Billing date.

The diagram above illustrates the add-on terms aligning to the reduced Plan’s Term period. 

In our illustration, as a result of reducing the Next Billing date, certain addon’s Terms need to be extended to their current term (Addon 1) and certain addon’s Terms need to be reduced to their current term (Addon 2 & 3).

An invoice will be raised for the extended period, and credit will be provided for the reduced period in the Plan & Addon if Proration is enabled.

Fixed billing cycles

You can set a fixed number of billing cycles at both the plan level and the addon level. Fixed billing cycles are applied based on each item’s own billing frequency.

Examples

• 3 cycles on a yearly plan = 3 years
• 3 cycles on a monthly addon = 3 months

If you’re moving from Plan-based Billing to Multi-Frequency Billing, review existing fixed cycle configurations carefully. The existing addons may end much earlier than expected and the fixed billing cycle counts may need manual recalculation.

Plan-based Billing behavior

• Plan: Yearly, fixed cycles = 5 → subscription ends after 5 years.
• Addon: Monthly, fixed cycles = 3 → addon ends after 3 years (because addon cycles effectively align to plan cadence in the plan-based billing).

Multi-Frequency Billing behavior

• Monthly addon cycles are truly monthly
• To remove a monthly addon after 3 years, you must set the fixed billing cycle to 36(3 years × 12 months).

Calendar Billing

If Calendar Billing is enabled on your Chargebee Billing site, addon renewal dates are automatically aligned to match the plan’s term boundaries. Even if addons have their own frequencies, calendar billing can force renewals to land on the plan-aligned calendar schedule.

Pause and resume behavior

When a subscription with Multi-Frequency Billing is paused and resumed:

• The plan term shifts based on the resume date.
• Addons are realigned to the plan’s new billing anchor.
• If proration is enabled, prorated charges or credits are generated as applicable.

Example

Subscription info:

• If the subscription is resumed on Apr 5, 2025, prorated charges are generated for Apr 5, 2025 → May 1, 2025 (partial month until the next monthly boundary).
• If the subscription is resumed on May 1, 2026, the subscription realigns from that date, the addons continue billing monthly, and the new end date becomes May 1, 2027.

Pause/resume shifts the “anchor” and extends the subscription end date. Addons follow suit and realign to the new anchor.

Coupons and discounts

Discounts may behave differently when subscriptions are backdated.

• If a one-time coupon or limited-period coupon is applied on a backdated date, and the subscription creation generates multiple line items (due to backdating), the discount is applied once on the total invoice, not once per line item.
• Percentage coupon - Will always apply the coupon irrespective of the renewal
• If you backdate subscription creation and apply a limited-period coupon (e.g., 2 months), it behaves like a one-time coupon during that backdated creation invoice.
• Free periods apply only to the plan, and not to addons.

MRR calculation

MRR is calculated by normalizing each recurring item based on its own billing frequency.

Example

• Annual plan: $120/year → $10/month
• Monthly addons: $50 + $20

MRR = $80 [(120 / 12) + 50 + 20]

If addons have fixed billing cycles, MRR adjusts automatically when those cycles end.

If addon B has billing cycles = 1 (exists only for 1 month):

Month 1 MRR = $ 80 [(120/12) + 50 + 20]

Month 2 and later MRR = $60 [(120/12) + 50]

Estimates

• Subscription renewal estimates reflect the plan’s renewal window.
• Use Next Invoice Estimate to preview upcoming addon invoices.

Enabling Multi-Frequency Billing

To enable Multi-Frequency Billing feature on your Chargebee Billing site, follow these steps:

1. Log in to your Chargebee Billing site.
2. Navigate to Settings > Configure Chargebee > Billing LogIQ > Billing & Invoices > Multi-Frequency Billing.

3. Click the toggle button to enable Multi-Frequency Billing.
4. Click Apply.

Limitations

Ensure that you read and understand the following points before enabling the Multi-frequency billing feature on your Chargebee Billing site:

• A single subscription can include only one plan. If you need multiple plans (with the same or different billing frequencies) within a single subscription, contact eap@chargebee.com
• Hosted Checkout and Self-Serve Portal: Individual addon billing frequencies are not displayed on the checkout and portal user interface. Customers see only the plan frequency and total price.
• Dunning: Dunning is currently handled at a subscription level. A failed addon invoice can trigger dunning actions for the entire subscription.
• RevenueStory:
  • CMRR is currently not supported. It may appear in RevenueStory, but it can be inaccurate because scheduled changes are currently interpreted only in the context of the plan’s frequency.
  • Flexible MRR, Report Builder, Report Explorer, and RevenueStory Dashboards are currently not supported.
• Revenue Recognition: Revenue recognition for subscriptions with multi-frequency billing is currently not supported and is under evaluation.
• Quotes and Contracts: Quotes [Legacy] and Contract terms are not currently supported.
• Advance Invoices:
  • If a subscription has an advance invoice, you cannot change its billing mode.
  • Advance invoices are generated at the subscription level and may include:
    • Charges for the subscription plan.
    • Charges for the remaining billing periods of recurring addons within the current plan term (where applicable). Advance invoices are not generated independently for individual addons. Any existing advance invoice must be settled or removed before changing the billing mode.
• Gift subscriptions are currently not supported.