Monthly vs Daily Billing – Which is Better for Your Business?

monthly vs daily billing

Making the best decision for your small business is often a matter of options. When searching for a card merchant services provider, it is crucial to explore the billing cycle options that are available. Different providers offer different billing frequencies for the collection of their credit card processing fees for small businesses. Choosing the best merchant service for your small business is a crucial step to managing these fees.

Here at PayFrog, we are happy to announce the return of the monthly billing option with PayJunction! If you are new to our card processing services, we will be going over what this change means for all the businesses that utilize PayFrog for payment processing. Our team is dedicated to helping small businesses figure out the best option for them.

Monthly Billing

This billing frequency type is usually what we recommend. Your business will get funded 100% of the gross daily card sales into your checking account. All the fees are accrued and charged as a debit to the checking account at the end of the month (to be more precise…it’s on the 2nd day of the following month, unless that day is a weekend or holiday in which case it is the next business day).

This style of billing is best suited for businesses who can budget for the lump sum at the end of each month and prefer a more hands-off model for their bookkeeping. It’s also essential for attorneys to use this method dealing with funds in trust because the fees need to be debited from their operating account while the sales deposits may go into the trust account. Check out the various pros and cons of monthly billing:


  • Way more convenient bookkeeping. 
  • There is more cash flow available to you throughout the month.
  • Essential for attorneys holding funds in trust


  • All of the combined fees are due at the end of the month, leading to a large charge that you must budget for.
  • This option does not suit merchants whom are constantly overdrawn in their business checking account as this will only lead to ACH rejects and NSF (Non-Sufficient Funds) Fees.

Daily Billing

Daily billing is the model that providers like PayPal, Square, and Stripe will use. However, a savvy merchant services agent will know how to use this billing method in a those rare and appropriate situations. The name for this type of billing for processing fees is a bit of a misnomer. Fees are not taken out daily, but rather the discount rate (%) on the account is withheld form each sales batch. Some businesses have sales every day while others will have more spotty income throughout the month. Even though the discount rate is held back from each batch, some fees may still come due at the end of each month. 

This option is better for businesses that struggle to pay the large, lump-sum that is due at the end of the month on the monthly billing option. However, it does require a lot more time and effort to align bank records to the charges.

Here’s another good example of when to use daily billing… If a business owner has a poor credit score due to not making timely payments, it might be a good idea to apply for the merchant account on a daily billing plan because the underwriter will not be concerned about whether or not they can budget and pay at the end of the month as the processor will retrieve the majority of their fees before the business is paid.

Below are the pros and cons to daily billing:


  • Fees are withheld more frequently, leading to smaller manageable payments withheld.  No large lump sum due at the end of the month.
  • Easier to get approved with poor credit (cause of poor credit being behind on payments)


  • Requires lots of tedious reconciliation to ensure fees and sales deposits match up to bank records and are recorded properly in your accounting software.
  • Less cash flow throughout the month.

Customize Your Options! | PayFrog Merchant Services

Now that we have explored what monthly vs daily billing entails, set up your business’ payment processing service with PayFrog! Whether you run a new business or are simply looking for a new merchant service provider, we have you covered. Our wide range of top-of-the-line hardware and competitive pricing guarantees you will find the perfect solution for your business. Contact us today to get started!

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