Suppose you'd like to bill your customers on a specific day of the month or week. In that case, you can use Shopify's subscription billing anchors to control exactly when your customers' payments will be processed and when their deliveries (orders) are scheduled.
By default, all subscriptions bill relative to the date customers initially subscribe. For example, if customers subscribe to a monthly plan on the 5th, they will rebill the next month on the 5th. Relative subscription billing is typically better for cash flow, as you'll receive subscription revenue continually. However, in some cases, you may want to bill all your customers on a specific day of the month or week.
Billing customers on a specific day of the week, month, or year
To bill your customers on a specific day of the week or month, you can use the billing anchor settings in PayWhirl on each subscription plan you configure. You can use three related settings to billing anchors to control exactly how customers will be billed.
Please note that Shopify will always charge the customer at checkout for their initial order. The anchor dates affect the fulfillment of that order and determine when the system will charge the customer again.
Anchor Day - The day of the week, month, or year to bill your customers.
First Delivery - When the first delivery (order) should be placed in Shopify. There are two options:
On Checkout will schedule the first order immediately after checkout.
On Anchor will schedule the first order on the next upcoming anchor day. The order will show in Shopify as scheduled until the anchor date is reached.
Monthly Anchor day billing example - no cutoff window
If you'd like to bill your customers on the 15th of each month and have their first delivery (order) created immediately, you can set your billing anchor day to the 15th in your plan settings and select On Checkout for the first delivery.
In the above scenario, your customer's first order will be generated immediately, and their next order will be scheduled for the 15th, on the next anchor day. This can result in a customer receiving two deliveries in a close time frame. For example, if a customer subscribed on the 10th of the month, their first order would be generated immediately, and their next order would be processed five days later on the 15th.
Alternatively, you could set the first delivery setting in your subscription plan to On Anchor, which would mean their first shipment would be on the 15th (the next anchor date), even if they subscribed on the 10th.
However, the above scenario could lead to a customer not receiving their first shipment for several weeks. For example, if the plan were set to On Anchor and a customer subscribed on the 17th, their first order would be scheduled for the 15th of the next month.
Monthly Anchor day billing example, with cutoff window
To help mitigate the issues described above, you can set a cutoff window in your plan settings to help ensure that customers are not double-billed in too close a timeframe.
Cutoff Window - Automatically reschedules the initial order if it's too close to the upcoming anchor date.
When the First Delivery setting is On Checkout and the customer is within the cutoff window, it will prevent two deliveries from being scheduled too close to each other by setting the first delivery to be scheduled on the anchor date. The second order will be billed the following anchor day.
When the First Delivery setting is On Anchor and the customer is within the cutoff window, the system will jump ahead and schedule the first order for the next anchor day to give you enough time to prepare the order.
Using the same example above, where we set our billing anchor day to the 15th and used On Checkout for our first delivery setting, we also specify a cutoff window of 10 days to prevent customers who subscribe close to the billing date from being double-billed in a short timeframe.
In the above scenario, with the added cutoff window, a customer who subscribes on the 10th of the month would fall within the cutoff window of the plan, so the on-checkout settings would not be applied, and the customer's first order would be scheduled five days ahead on the 15th. Conversely, if a customer subscribed on the 4th of the month, it would be outside the 10-day cutoff window, and their first order would be generated immediately. Then they would be billed again on the 15th.
However, if the first delivery is set to on anchor the system will adjust the delivery out further. For example, if the billing anchor day were the 15th, with the first delivery set to on anchor and the same 10-day cutoff window, a customer subscribing on the 10th of the month would be in the cutoff window, so their first order would be pushed ahead to the next anchor on the 15h of the following month. Conversely, if a customer subscribed on the 4th of the month, they would be outside of the 10-day cutoff window, and their first order would be scheduled for the 15th, approximately 11 days later.
When a delivery is set to "on anchor," the system will create the Shopify order in the scheduled status. Once the anchor date is reached, the order will switch automatically to unfulfilled so it can be shipped out. See this Shopify guide for more details on scheduled orders.
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The PayWhirl Team