Some countries require you, the merchant, to provide the customer with advance notice before debiting the customer's account for payment, while other countries may not require it but consider it a best practice. Advance notice is especially important when the recurring fees have changed, for example, the customer purchased an additional product this month.
Using advanced invoicing to notifying your customers provides the following advantages:
Typically, an email notification is sent to the customer a specific number of days in advance of when their next recurring payment is due. The such notification includes the amount and number of dates until payment will be debited. In Zuora, this can be handled by generating an invoice for the direct debit customer in advance with a payment due date a specified number of days in the future.
To create a customer notification:
MD Enterprises purchases a $10 monthly subscription on November 16, 2011 and today is December 1, 2011. The next payment due for MD Enterprises is December 16, 2011.
The merchant is required to provide 15 days notification to MD Enterprises. An invoice will be generated on December 1, 2011 with an Invoice Date of December 1, 2011 and Invoice Target Date of December 16, 2011.
The payment term for MD Enterprises is Net 15 days. Therefore, the payment due date is December 16, 2011.
MD Enterprises receives their invoice and does not contact the merchant with any concerns and does not want to cancel the subscription (in other words, the customer has not reported any concerns regarding the invoice or payment amount). On December 16, 2011, the merchant will attempt payment (via Zuora) and debit the customer's bank account for $10.