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Plan model

The plan model defines when and how much a customer is charged.

Plan interval​

The plan interval corresponds to the billing period and defines when invoices are generated. In most cases, the charges are also calculated according to the plan interval.

There are several plan intervals:

  1. Weekly: subscription fees and charges are billed on a weekly basis (Monday to Sunday);
  2. Monthly: subscription fees and charges are billed on a monthly basis; and
  3. Yearly: subscription fees are billed on a yearly basis and charges can be billed monthly or annually.

The base charge amount and its currency​

You need to define a base amount for each plan (i.e. the subscription fee). This amount is what the customer will pay by subscribing to the plan regardless of their consumption.

This base charge amount is recurring, and billed at the end of each billing interval.

Pay in advance or in arrears​

With Lago, you can define if the base charge of the Plan is paid in advance or in arrears.

  • If the toggle is off (boolean set to FALSE), the Plan is paid for the past period (in arrears).
  • If the toggle is on (boolean set to TRUE), the Plan is paid upfront (in advance) for the period.
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Note that this toggle only affects the base amount of the Plan. Additional charges for per-usage Billable metrics are always paid in arrears because they are linked to a past consumption of your customers.

Trial period (optional)​

You may define a trial period for your plan. A trial period is defined as a number days that are not charged to the customer.

Consider the following example:

You create a monthly plan of $50 that needs to be paid in advance, with a trial period of 5 days.

If the customer's subscription starts on April 1st, then Lago will immediately issue an invoice for the period April 6th to April 30th.

Therefore, on April 1st, the system will issue an invoice of $50 x 25 days due / 30 days in April = $41.67.

The trial period applies to the base amount of the plan. Usage-based charges incurred during the trial period remain payable by the customer.

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The trial period only applies to the first plan associated with the subscription. In case of an upgrade or a downgrade, the trial period of the new plan does not apply.

Pro-ratas based on subscription date​

Obviously, we know that your customers don't necessarily sign up for a Plan at the very begining of each month (or each year). This is why Lago automatically applies a pro-rata for the first and the last subscription period of a Plan.

Here is an example: A Customer X signs up for the Plan Start (base amount of 10€, with no trial period) on April 15, 2022.

  • If the Plan is defined to be paid in arrears, this Customer will be charged 5€ for the first month at the end of the period (May 1, 2022).
  • If the Plan is defined to be paid in advance, this Customer is charged 5€ straight away for the first month (April 15, 2022).
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Note that pro-ratas can also be applied in case of upgrades or downgrades.