Invoice

An invoice is the financial record of a subscription charge. Each billing cycle, the subscription system generates an invoice that itemizes what the customer owes: the base subscription amount, any usage-based charges, applicable taxes, discounts or credits, and the total due. The invoice serves as both a payment request and an accounting record.

In subscription billing, invoices go through a lifecycle. They start as "draft" when generated, move to "open" when finalized, and then transition to "paid" (successful charge), "past due" (failed charge), or "void" (canceled). Each status triggers different workflows — a "past due" invoice initiates the dunning sequence, while a "void" invoice may require a credit note.

Invoices carry legal and compliance requirements that vary by jurisdiction. Many countries require specific information on invoices: seller and buyer details, tax registration numbers, sequential invoice numbers, currency, and tax breakdowns. The EU's VAT rules, for example, mandate that invoices include the VAT rate and amount for each line item. Failure to comply can result in penalties during tax audits.

For subscription businesses, invoice management at scale requires automation. Manually creating and sending invoices for thousands of recurring charges is not feasible. Payment providers like Stripe handle invoice generation automatically, but businesses often need to customize the invoice layout, add payment links, and configure how failed invoices are retried.

When a payment fails, the invoice becomes the anchor for the recovery process. LostChurn tracks the status of every invoice and coordinates retries and dunning communications to bring past-due invoices to "paid" status. The platform provides visibility into your outstanding invoice amounts so you can quantify the revenue at risk.