A billing cycle is the regular interval between invoicing periods. Common cycles include weekly, fortnightly, monthly and milestone-based billing.
Your billing cycle determines how often you invoice customers for goods or services. Choosing the right billing cycle affects your cash flow, administrative workload and customer relationships. Common billing cycles include: weekly or fortnightly (common for hourly workers and casual services), monthly (the most common for ongoing services and subscriptions), quarterly (for some professional services and retainers), milestone-based (for projects, invoicing at agreed progress points) and on-completion (invoicing when the work is finished). Shorter billing cycles improve cash flow by getting invoices to customers sooner. Longer cycles reduce administrative overhead but delay cash collection. For subscription businesses, billing cycles are often monthly or annual (with a discount for annual prepayment). SortBooks works with your billing cycle by tracking invoiced amounts, matching incoming payments and providing visibility into your billing schedule and outstanding receivables.
SortBooks helps with the bookkeeping behind billing cycle by connecting to your Xero account and using AI to suggest the right account for transactions sitting in catch-all accounts, learning from your own past coding. Instead of fixing billing cycle by hand, you review each suggestion, approve it, and SortBooks updates Xero, GST code included. Then ask the AI CFO about your numbers, using live Xero data.
An invoice is a document sent to a customer requesting payment for goods or services provided. It includes details of the transaction, payment terms and the amount due.
Accounts receivable (AR) is the money owed to your business by customers who have purchased goods or services on credit. It is a current asset on your balance sheet.
Cash flow is the movement of money in and out of your business. Positive cash flow means more money coming in than going out. It is often considered more important than profit for business survival.
Payment terms specify when payment is expected from a customer. Common terms include payment on receipt, net 7, net 14 and net 30 (meaning payment due within that many days).
Revenue (also called sales, income or turnover) is the total amount earned from selling goods or services before any expenses are deducted. It is the top line of the P&L.
Connect Xero, check the AI's suggestions and approve the changes. SortBooks updates Xero for you.