When this field is No, the system creates contract invoices for periods—determined by the billing cycle—that begin with the contract start date. With this setting, the system bills a year-long contract with a start date of January 15 and a monthly billing cycle on January 15, February 15, March 15, and so on. This example assumes Bill in Arrears is No.

If Period Based Billing is No, the system takes into account the length of the month when the contract start date is at or near the end of a month. For example, the system bills a contract that started on January 31 on January 31, February 28 (except leap years), March 31, and April 30. A contract starting on April 30 would be billed on April 30 and May 31, not May 30, since the system knows that April 30 is the last day of the month for April, corresponding to May 31 in May.

When Period Based Billing is Yes, the system invoices on the first day of the appropriate calendar month (usually the next month), regardless of the actual start date of the contract. In the previous example, invoicing occurs on February 1, March 1, and so on.