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does this sound familiar to some people? if not, how do you handle billing clients when you're a reseller?
I do a bit of reselling and haven't come across that situation under reselling. That's more like a hosting affiliate deal.
For a small number of clients, using PayPal for recurring payments is widely accepted. For clients that don't want to set up like that, I'd encourage you to get them to prepay for 6 or 12 months at a time. Offer a small discount if needed.