Annual, upfront, and price it so annual is obviously the better deal. Twelve months of cash on day one is the cheapest funding you will ever raise, and annual customers churn far less than monthly ones because they made a real decision instead of a reversible one. The clean way to do it is to set the monthly price 20 to 25 percent above your target and present annual as the discount, so you are never actually below the number you wanted. Then watch the second half of the problem, which is collection rather than billing: an Indian enterprise on net 60 or net 90 can turn an annual contract into a cash flow problem anyway. Invoice the day the contract signs, get GST details right the first time (a wrong invoice restarts their clock), and if you are a registered MSME know that the MSMED Act caps the payment period at 45 days.
3 hand-picked resources, 1 India-specific, 3 link-checked. Pick how you want to dig in.
Why we picked it The half of the cash flow problem that is specific to selling in India: the MSMED Act 45 day ceiling, GST on late payment interest, a collections cadence, and TReDS invoice discounting if you need the cash sooner than your buyer wants to pay.
From Treelife 20 min read
Open treelife.in →Why we picked it A short, clear statement of the four reasons annual wins for a small company: cash today, forecastable revenue, materially lower churn, and one procurement cycle a year instead of twelve chances to reconsider.
From Maxio by Barrow Hamilton 8 min read
Open maxio.com →Why we picked it Connects the billing decision to the number that actually matters, which is how long you survive. Gives you three ratios to track and makes the point that negative cash flow is not automatically bad, so long as you know which kind you have.
From Lighter Capital 14 min read
Open lightercapital.com →How pricing and packaging reads from a different seat.
The same ground, over in Money, pricing & model, our Starting Up track.
The same ground, over in Money, pricing & unit economics, our D2C track.
