How does automatic billing work in Google Ads?

How Automatic Billing Works in Google Ads
Automatic billing (also known as postpay billing) is the most common payment method for Google Ads. With automatic billing, Google charges your payment method after your ads run, based on the amount of ad spend you've accumulated. Here's a detailed breakdown of how it works:

1. How Charges Accumulate:
Ad Spend: As your ads run and get impressions or clicks, Google tracks the cost of these interactions based on your bidding strategy and budget settings.

No Prepayment Required: Unlike manual payments (prepay), you don't need to add funds upfront. Google will automatically charge you after the ad spend reaches a certain amount.

2. Billing Threshold:
Billing Threshold: When you're on automatic billing, Google Ads uses a billing threshold to determine when you'll be charged. This is the minimum amount that must be accrued before Google automatically charges your payment method.

For example, if your billing threshold is $100, Google Ads will automatically charge you when your account reaches that amount in accumulated ad spend. This threshold may increase over time if your account has a good payment history.

Threshold Increases: Google may increase your billing threshold as your payment history improves. For example, your initial threshold might be $50 or $100, but as you consistently pay on time, Google might increase it to $500 or more. This reduces the frequency of payments.

3. Automatic Payments:
Payment Processing: When your account balance reaches the threshold, Google automatically charges your primary payment method (credit card, debit card, PayPal, etc.).

Postpay: The charges are based on your ad spend, and the payment will happen after the charges are incurred, not before.

Payment Timing: Payments are processed automatically after each billing cycle or when your threshold is reached, depending on your account's activity.

4. Billing Cycle:
Monthly Cycle: Google Ads typically bills on a monthly cycle, but this may vary based on how quickly your ads accumulate charges. Once your account reaches your threshold or the end of the month, Google processes the payment.

Minimum Spend Requirement: If your ad spend doesn't meet the threshold in a month, you might not be charged until your spend reaches the threshold the next month.

5. Payment Methods for Automatic Billing:
You can use various payment methods with automatic billing:

Credit or Debit Cards

Bank Account (ACH)

PayPal (if supported in your region)

Direct debit (depending on the region)

Your payment method is stored in your Google Ads account, and Google will use it to process automatic charges once your billing threshold is met.

6. Invoices and Receipts:
Invoices: After each payment, Google provides you with an invoice that details the charges, including the amount billed, the date of the payment, and your payment method.

You can view and download your invoices directly from the Billing & Payments section in your Google Ads account.

Receipts: After payments are processed, Google will also send you an email receipt confirming the transaction.

7. Billing Issues:
If there's an issue with your payment (e.g., your card is declined or the payment method fails), Google Ads will pause your ads until the issue is resolved. You'll need to update your payment method or resolve the issue before your ads can resume.

How to Monitor Your Automatic Billing:
You can always keep track of your spending and billing in the Billing & Payments section of your Google Ads account. This section provides an overview of your payment history, including:

The amount spent

The date of each charge

Your current balance (if applicable)

Your billing threshold

Key Advantages of Automatic Billing:
No need to prepay: You don't need to manually deposit funds into your Google Ads account.

Convenience: Payments are processed automatically, and Google handles the billing based on your actual ad spend.

Flexible Payment Threshold: The threshold adjusts based on your account's spending and payment history, so you don't need to worry about frequent charges if you're a high spender.

Important Notes:
You can switch between automatic and manual payments: If you want to change to manual payments (prepay), you'll need to contact Google Ads support.

Ads may stop running if payment fails: If your payment fails, your ads will be paused until you update your payment information or resolve any issues.