Are Yearly Subscriptions Hard?

Question

I'm currently working with a large SaaS that wants to implement yearly subscriptions well. We have overages (think: you have N users as part of your subscription, but if you go over, we bill them at $X/user).Monthly plans are "easy" as they map to Stripe's model. Stripe has "usage records". Plan changes are all handled with prorations, etc. It's great.Yearly seems a lot more complicated. There doesn't seem to be a Stripe-native way to have invoices for overages being sent at the month end. We have to do a ton of billing date/math, keep track of the overages, of when we billed for them, and create invoices manually. It's a mess. We're trying to write valid, tested, solid code for this... but it feels like we're slowly rebuilding parts of Stripe :-)Has anyone else gone through this? What's stopping Stripe from handling yearly subscriptions with monthly overage invoices? Are we an edge case [0]? Cheers[0] I'm being facetious - there are clearly many companies whose business model includes yearly plans + overages-billed monthly. Slack, Zapier, etc.

ezekg · Accepted Answer

Could you have a separate monthly subscription on the customer that handles overages? For example, all yearly customers would have 2 subscriptions: the base yearly subscription for up to N users, but also a monthly subscription for overages > N (so an invoice will only be sent if overages > 0).Doing it this way, Stripe should handle the bulk of the logic; yearly and monthly subscriptions would be more or less the same from your end.

caydenm · Answer

Are you charging yearly in advance or charging monthly but on a yearly contract?To answer your question, yes they are hard, but they make sense from a retention and overall revenue perspective.

p0d · Answer

I do a yearly subscription. An issue to watch out for asides billing is monitoring that your customers aren't leaving you, but you don't know about it.

mytailorisrich · Answer

First thing that popped up on my mind: do NOT think in terms of what a payment processor can do.
It should be irrelevant what Stripe can do as long as they can process payments for you.
Whether you want to offer yearly subscription should only be a matter of your commercial strategy, ie. does it make sense to offer it for your business?