The best flexible billing options make life easier for your customers, without wrecking your cash flow in the process. The key is to balance buyer convenience with business sustainability.
Here are some of the most common flexible billing models SaaS companies use, and when they work best.
1. Monthly billing
Best for: Startups, SMBs, or customers testing your product
Simple and predictable for buyers, monthly billing reduces friction and shortens sales cycles. But it comes at a cost: slower cash collection, higher churn risk, and less predictability on your side.
2. Quarterly billing
Best for: Mid-sized customers with some budget flexibility
A middle ground between monthly and annual. It improves your cash flow slightly while still giving customers breathing room.
3. Annual billing (upfront)
Best for: Maximising cash flow and customer commitment
This is ideal for your business: higher LTV, lower churn, better planning. But not all customers can afford to pay 12 months up front, especially smaller teams or early-stage buyers.
4. Usage-based or tiered billing
Best for: Products with variable usage or clear scaling patterns
Great for aligning price to value, but harder to forecast. It works well if your product grows with the customer, but can create uncertainty in cash flow.
5. Customer financing
Best for: Offering monthly payments while still getting paid up front
With Customer Financing (like Lemon), you can offer your customer a monthly instalment plan, while you still get the full annual payment on day one. Lemon handles the financing and repayment, you get the cash and the commitment, without chasing invoices or losing revenue to churn.
It’s a simple way to offer flexibility without giving up the benefits of annual billing.
