Compare classic and flexible billing mode

We recommend using flexible billing mode because it provides improved billing behavior and access to new features. However, moving to flexible billing mode can change your integration’s behavior. Review the following differences to understand the impact on your integration and make an informed decision.

Credit proration calculations

Credit prorations are issued when customers downgrade their subscriptions or cancel subscription items before the end of their billing period. Flexible billing mode calculates credit prorations based on the original amount previously debited to a customer.

For a full overview of credit proration calculations, see Credit prorations.

Classic	Flexible
When an update to a subscription generates a credit proration, the credit proration amounts are calculated based on the value of the subscription item’s current price, tax, quantity, and the last discounts used.	When an update to a subscription generates a credit proration, these prorations use the original debited amount instead of current subscription values.

Proportional discount application for prorations

We apply discounts proportionally to each subscription item during proration calculations instead of distributing them evenly. This results in more prorations, especially when invoicing on a per-item basis or canceling items with unevenly distributed discounts.

Classic	Flexible
We distribute discounts evenly across all subscription items.	We apply discounts proportionally to each subscription item during proration calculations.

Usage-based pricing

Suppress zero-amount line items when adding usage-based items

Flexible billing mode doesn’t create zero-amount line items when you add usage-based items to a subscription. If the invoice is empty as a result, we don’t generate one.

For example, when adding a monthly usage-based item during subscription creation or update:

Classic	Flexible
A 0 USD line item is generated on the invoice for the usage-based item. This also applies when updating a subscription without cycling to add a usage-based item while using `proration_behavior=always_invoice`.	A 0 USD line item isn’t added to the invoice for the usage-based item. If the resulting invoice wouldn’t contain any items, we don’t generate one.

Bill usage-based items based on price at time of reporting

Flexible billing mode charges for usage based on the price that was in effect when the usage was reported, rather than the most recent price.

For example:

Initially, the price is 0.1 USD per 100 API calls (Price A)
Usage on January 5: 1000 API calls
On January 15, the price changes to 0.15 USD per 100 calls (Price B)
Usage on January 20: 500 API calls

Classic	Flexible
Stripe only bills for the usage that was reported since changing to the current price. 500 API calls at Price B (0.15 USD per 100 calls) = 0.75 USD Total invoice amount = 0.75 USD.	Stripe bills for all usage in the current period at the price effective at the time it’s reported. 1000 API calls at Price A (0.1 USD per 100 calls) = 1 USD 500 API calls at Price B (0.15 USD per 100 calls) = 0.75 USD Total invoice amount = 1.75 USD.

Classic

Flexible

Stripe only bills for the usage that was reported since changing to the current price.

500 API calls at Price B (0.15 USD per 100 calls) = 0.75 USD

Total invoice amount = 0.75 USD.

Stripe bills for all usage in the current period at the price effective at the time it’s reported.

1000 API calls at Price A (0.1 USD per 100 calls) = 1 USD
500 API calls at Price B (0.15 USD per 100 calls) = 0.75 USD

Total invoice amount = 1.75 USD.

Bill for unbilled usage when removing usage-based items

Depending on the value of proration_behavior, flexible billing mode might generate an invoice item for unbilled usage when removing a usage-based subscription item. This applies to removals using the API or during schedule phase transitions that occur mid-period. For phase transitions that coincide with any subscription item current_period_end, an invoice gets created with an invoice line item for the removed usage-based subscription item.

Scenario	Classic	Flexible
Update subscription or schedule using the API	No invoice item or invoice is generated for unbilled usage when removing a usage-based subscription item.	An invoice item is generated for unbilled usage when removing a usage-based subscription item.
Schedule phase transition	An invoice (but no invoice item) is generated for unbilled usage when removing a usage-based subscription item.	Depending on the incoming phase’s `proration_behavior`: `create_prorations`: an invoice item is created for unbilled usage when removing a usage-based subscription item. `always_invoice`: an invoice item for unbilled usage is created and immediately invoiced. `none`: no invoice item is created.

Reset the billing cycle anchor

Flexible billing mode only resets your billing cycle anchor on subscription updates when you explicitly set billing_cycle_anchor to a value other than unchanged.

Classic	Flexible
The `billing_cycle_anchor` is automatically reset to the current date when switching a subscription to a different price with a different recurring interval, changing from zero-amount prices to non-zero prices, or moving cancel_at to a date before the next time the subscription renews.	The `billing_cycle_anchor` is never automatically reset.

Consolidated invoicing for subscription schedule phase transitions with usage-based items

Flexible billing mode consistently generates a single invoice when a subscription renews. This change eliminates separate invoices for removed usage-based items and improves billing consistency.

When your subscription with usage-based items transitions between phases:

Classic	Flexible
Two invoices are generated.	A single consolidated invoice is generated. This invoice includes both usage-based and licensed items, applies discounts from the previous phase to usage-based billing, and uses tax rates from the next phase.

Scheduled subscription cancellation

Flexible billing mode lets you disable prorations for a truncated first billing period (when setting cancel_at on creation) using the proration_behavior parameter.

Classic	Flexible
Prorations are applied to the first billing period.	Prorations aren’t applied to the first billing period.

Backdate subscriptions

When backdating is consistent with regular billing, flexible billing mode creates separate invoice line items for each billing period within the backdated range. It also automatically aligns the billing cycle anchor to the backdate_start_date when not explicitly set. Backdating isn’t supported if the resulting invoice has more than 250 line items.

For example, a subscription needs to be backdated due to a missed invoice for the past two billing periods. The customer was invoiced for 2 different backdated periods:

Billing Period 1 (March 1 - March 31):
- Usage reported: 100 GB of storage used.
- Price: 10 USD per 10 GB.

Billing Period 2 (April 1 - April 30):

Usage reported: 150 GB of storage used.
Price: 10 USD per 10 GB.

The service provider decides to backdate the invoice to cover both billing periods: March 1 to April 30.

Classic	Flexible
Charges for the entire backdated period are calculated collectively as a single line item. Total charges: 250 GB = 25 x 10 USD = 250 USD This amount appears as a single line item on the invoice.	Backdated time ranges are split into multiple invoice line items according to billing period boundaries. Total charges: Billing Period 1 (March): 100 GB = 10 x 10 USD = 100 USD (as a separate line item). Billing Period 2 (April): 150 GB = 15 x 10 USD = 150 USD (as a separate line item).

Trials

Update trial start date for subsequent trials

Flexible billing mode uses the most recent trial start date for subscriptions with subsequent trials.

For example, when you have:

Trial period from January 1st to February 1st
Normal billing period from February 1st to March 1st
Trial period from March 1st to April 1st

Classic	Flexible
The `subscription.trial_start` always refers to the first trial a subscription started.	The `subscription.trial_start` refers to the start of the most recent trial of a subscription.

Preserve original trial end date when subscription cancels

Flexible billing mode preserves the trial_end if you modify the cancel_at date.

Classic	Flexible
Setting `cancel_at` to a date earlier than the `trial_end` date automatically changes `trial_end` to match `cancel_at`. However, removing `cancel_at` or changing it to a date later than the `trial_end` date doesn’t automatically change `trial_end`, even if `trial_end` was originally a later date.	Scheduling a subscription cancellation using `cancel_at` no longer alters the `trial_end` date. This ensures that trials run for their intended duration regardless of cancellation date updates.

Standardize trial period line item description

Flexible billing mode uses a consistent description format for both usage-based and licensed items during trial periods.

For example, when you have a monthly coffee subscription (licensed) and an alpaca_ai_tokens subscription (usage-based), the subscription description displays as following:

Classic Flexible

Classic	Flexible
Licensed items use the template `Trial period for {product name}`, while usage-based items use `{quantity} x {product name} (Free trial)`. For licensed items: `Trial period for monthly coffee subscription` For usage-based items: `10 x monthly alpaca_ai_tokens (Free trial)`	The same format, `Free trial for {quantity} x {product name}`, applies to all item types, which provides a more uniform presentation of trial information. These descriptions are also localized. For licensed items: `Free trial for 1 x monthly coffee subscription` For usage-based items: `Free trial for 10 x monthly alpaca_ai_tokens subscription`

Licensed items use the template Trial period for {product name}, while usage-based items use {quantity} x {product name} (Free trial).

For licensed items:
- Trial period for monthly coffee subscription
For usage-based items:
- 10 x monthly alpaca_ai_tokens (Free trial)

The same format, Free trial for {quantity} x {product name}, applies to all item types, which provides a more uniform presentation of trial information. These descriptions are also localized.

For licensed items:
- Free trial for 1 x monthly coffee subscription
For usage-based items:
- Free trial for 10 x monthly alpaca_ai_tokens subscription

Re-bill for trial line items

Flexible billing mode only generates line items for changes made during a trial. Existing items without changes aren’t rebilled.

For example, when you make an update to add another trialing item price_b to a trialing subscription with price_a:

Classic	Flexible
Changes during a trial result either in no invoice or in an invoice that restates the entire state of the subscription.	Changes during a trial consistently result in line items comparable to changes outside of a trial. For example, if a new price is added to a subscription a line item representing that price is also added.

Pending invoice items

Consistently include pending invoice items

Flexible billing mode includes all available pending invoice items in invoices generated by a billing cycle anchor reset where proration_behavior = always_invoice.

Classic	Flexible
Billing cycle anchor reset invoices include pending items only when `proration behavior` isn’t `always_invoice`.	Pending invoice items are always included on all invoices a subscription generates.

Mixed intervals on the same subscription

Flexible billing mode lets you create mixed interval subscriptions, which can bill for multiple recurring prices with different intervals. That allows you to combine different pricing structures within a single subscription.

Classic	Flexible
Not supported. All items in a subscription must have prices with the same interval and interval count.	Items on a mixed interval subscription can have recurring prices with different intervals or interval counts. For example, a monthly price and an annual price can exist on the same subscription.