Glossary
Billing in advance
Billing in advance means invoicing a customer at the start of a service period, before the service has been delivered.
Also called advance billing, prepaid billing.
It suits fixed fees, where the amount is known up front, and it improves cash flow by collecting before the cost of service is incurred.
Anything collected in advance is a liability until earned, which is why advance billing and deferred revenue always appear together in the accounts.
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