How do recurring payments work?

Recurring Payments, also known as auto-billing or auto payments / autopay, allows you to automatically charge a client's credit card, bank transfer (ACH) details, Direct Debit Mandate, or PayPal account on a regular basis through a recurring template invoice or a retainer. Payment is taken automatically, making recurring payments ideal for subscriptions or other recurring services.

To activate recurring payments, follow these steps:

1. If using Direct Debit, collect the payment information with a BACS or SEPA Mandate first
2. Set up a recurring template or retainer
3. Activate one of the online payment options on the recurring template or retainer
4. Send the recurring template or retainer to your client. 

As long as your recurring template or retainer shows Accept Online Payments set to Yes and there is a recurring schedule (or the retainer is active), this will then activate Recurring Payments as an option to your clients.

 

Your clients can choose to activate recurring payments on the invoice they receive from you. For more details on how a client can opt into recurring payments, edit their details and more, review As a client, how do I pay my invoices automatically? here. The primary client will automatically receive a payment notification email after any future generated invoices are automatically paid. 

Deactivate Recurring Payments

If you no longer want the recurring template or retainer to charge your client automatically after they've opted into recurring payments, you can deactivate this with the below steps: 

1. Select the Invoices section
   1. For recurring templates, select the Recurring Templates sub-section
      1. Find the recurring template that is set to auto-paid and select it
   2. For retainers, select the Retainers sub-section
      1. Find the retainer that is set to auto-paid and select it
2. Select the Edit button
3. Under Settings, select Accept Online Payments
4. Hover over the saved payment information and select the trash can icon to delete it - the recurring template or retainer will stop recurring payments immediately
   
5.  If you'd like to turn off Online Payments entirely, ensure None is selected
   
6. Select Done to apply the payment settings
7. Then select Save to finish. The recurring template or retainer will continue to generate invoices (if there are any remaining or it's set to infinite), and your client will need to re-opt into Recurring Payments again or pay each generated invoice individually. If Online Payments has been turned off, your client will not be able to pay through online payments.

 

Advanced Payments

Advanced Payments allow you to use a client's saved card to automatically opt into recurring payments, or add a Subscription to automatically opt into recurring payments when the client pays an invoice from a generated recurring template or retainer.

 

FAQs

What happens if a recurring payment fails?

When a recurring payment fails, an email is sent to the primary client first. Next, it will go into Retry status automatically, where the payment will be attempted again on the original saved payment in the next 24 hours. If it fails after the first Retry, it will retry again for a second time. Upon the second failed retry, the invoice will be updated with a Declined status and will stop retrying automatically.

To manually retry a declined invoice, select the declined invoice, then select the Retry Payment link at the top of the invoice in the history bar.

The invoice will retry again in the next 24 hours. This can be repeated every 24 hours as often as needed. You can also ask your client to update their payment information, which will automatically force the recurring payment to retry on the new payment instead. 

 

Can I edit a recurring template that has an active recurring payment on it? 

If the recurring payment is through a:

• Credit Card or PayPal Account - The recurring template can be edited fully with no disruption to the saved credit card or PayPal account information
• Bank Account (Bank Transfer (ACH) and Direct Debit) - Modifying the invoice's Amount Due or the frequency in the How Many? field will cause the saved bank transfer recurring payment to be removed. The client will then need to re-opt into recurring payments on the next generated invoice to save their information again.

 

What happens if my client's saved credit card has changed?

Credit card information can change regularly with expirations, fraud detection, loss, and upgrades. It's recommended to have your clients update their credit card information as soon as possible to ensure no disruptions to their recurring payments. As a backup, FreshBooks' credit card updater runs automatically in the background to retrieve any updated credit card information from the card issuer. This can help minimize disruptions in recurring payments until your client can update their saved information.