Settlement period
One speaks of a settlement period when any transactions fall within a certain period of time. In this case, these submitted bookings can only be paid out much later, but they are assigned to this settlement period. In most cases, the settlements are posted weekly, fortnightly or monthly.
The accounting periods with credit cards
The billing periods of the numerous credit card providers usually differ. Thus, the billing can run over a calendar month or start on any other day. The length of the billing period is determined by the type of credit card. For example, a billing period lasts one month for charge cards, while debit cards or so-called prepaid cards are debited immediately. The relatively short billing periods have become more and more common, as credit card holders thus retain better control over their payments and cases of misuse can be detected as quickly as possible. Until a few years ago, revolving cardholders, for example, were billed only quarterly, but now they are billed monthly as well.
Weekly or monthly billing period
Employees are usually familiar with the payroll period from their pay slips. In Germany, salaries are usually billed on a monthly basis. If the transaction falls in January, for example, this month is also considered the payroll period. Nevertheless, the employee often does not receive his or her money until mid-February because the payment is not posted until that time. If an employee has a payroll period of one month, he or she will receive a total of 52 payments. This figure plays an important role, for example, in calculating the total annual gross earnings. The shorter the payroll period, the more costs are incurred by the employer as a result of the postings. In Germany, therefore, monthly payroll accounting has become the norm in almost all industries. In connection with the payroll period, the term payment rhythm is sometimes also used to describe the same circumstances.
The accounting period in the wider linguistic usage
In general business language, the payroll period is a part of the plan period and is also usually one month. However, the term is often used specifically in tenancy law. Here, the settlement period means the period of the service charge settlement. The latter is usually settled annually.
