diff --git a/erpnext/accounts/doctype/subscription/subscription.json b/erpnext/accounts/doctype/subscription/subscription.json
index 39ad0d4a80..aa29907d06 100644
--- a/erpnext/accounts/doctype/subscription/subscription.json
+++ b/erpnext/accounts/doctype/subscription/subscription.json
@@ -437,6 +437,38 @@
    "translatable": 0, 
    "unique": 0
   }, 
+  {
+   "allow_bulk_edit": 0, 
+   "allow_in_quick_entry": 0, 
+   "allow_on_submit": 0, 
+   "bold": 0, 
+   "collapsible": 0, 
+   "columns": 0, 
+   "fieldname": "generate_invoice_at_period_start", 
+   "fieldtype": "Check", 
+   "hidden": 0, 
+   "ignore_user_permissions": 0, 
+   "ignore_xss_filter": 0, 
+   "in_filter": 0, 
+   "in_global_search": 0, 
+   "in_list_view": 0, 
+   "in_standard_filter": 0, 
+   "label": "Generate Invoice At Beginning Of Period", 
+   "length": 0, 
+   "no_copy": 0, 
+   "permlevel": 0, 
+   "precision": "", 
+   "print_hide": 0, 
+   "print_hide_if_no_value": 0, 
+   "read_only": 0, 
+   "remember_last_selected_value": 0, 
+   "report_hide": 0, 
+   "reqd": 0, 
+   "search_index": 0, 
+   "set_only_once": 0, 
+   "translatable": 0, 
+   "unique": 0
+  }, 
   {
    "allow_bulk_edit": 0, 
    "allow_in_quick_entry": 0, 
@@ -814,7 +846,7 @@
  "issingle": 0, 
  "istable": 0, 
  "max_attachments": 0, 
- "modified": "2018-08-21 16:15:44.533482", 
+ "modified": "2018-10-04 10:29:03.338893", 
  "modified_by": "Administrator", 
  "module": "Accounts", 
  "name": "Subscription", 
diff --git a/erpnext/accounts/doctype/subscription/subscription.py b/erpnext/accounts/doctype/subscription/subscription.py
index fe39161960..7fb6b7a096 100644
--- a/erpnext/accounts/doctype/subscription/subscription.py
+++ b/erpnext/accounts/doctype/subscription/subscription.py
@@ -321,6 +321,23 @@ class Subscription(Document):
 
 		self.save()
 
+	@property
+	def is_postpaid_to_invoice(self):
+		return getdate(nowdate()) > getdate(self.current_invoice_end) or \
+			(getdate(nowdate()) >= getdate(self.current_invoice_end) and getdate(self.current_invoice_end) == getdate(self.current_invoice_start)) and \
+			not self.has_outstanding_invoice()
+
+	@property
+	def is_prepaid_to_invoice(self):
+		if not self.generate_invoice_at_period_start:
+			return False
+
+		if self.is_new_subscription():
+			return True
+
+		# Check invoice dates and make sure it doesn't have outstanding invoices
+		return getdate(nowdate()) >= getdate(self.current_invoice_start) and not self.has_outstanding_invoice()
+
 	def process_for_active(self):
 		"""
 		Called by `process` if the status of the `Subscription` is 'Active'.
@@ -330,7 +347,7 @@ class Subscription(Document):
 		2. Change the `Subscription` status to 'Past Due Date'
 		3. Change the `Subscription` status to 'Cancelled'
 		"""
-		if getdate(nowdate()) > getdate(self.current_invoice_end) or (getdate(nowdate()) >= getdate(self.current_invoice_end) and getdate(self.current_invoice_end) == getdate(self.current_invoice_start)) and not self.has_outstanding_invoice():
+		if self.is_postpaid_to_invoice or self.is_prepaid_to_invoice:
 			self.generate_invoice()
 			if self.current_invoice_is_past_due():
 				self.status = 'Past Due Date'
@@ -338,7 +355,7 @@ class Subscription(Document):
 		if self.current_invoice_is_past_due() and getdate(nowdate()) > getdate(self.current_invoice_end):
 			self.status = 'Past Due Date'
 
-		if self.cancel_at_period_end and getdate(nowdate()) > self.current_invoice_end:
+		if self.cancel_at_period_end and getdate(nowdate()) > getdate(self.current_invoice_end):
 			self.cancel_subscription_at_period_end()
 
 	def cancel_subscription_at_period_end(self):
diff --git a/erpnext/accounts/doctype/subscription/test_subscription.py b/erpnext/accounts/doctype/subscription/test_subscription.py
index c42b8e824b..a5285ea16a 100644
--- a/erpnext/accounts/doctype/subscription/test_subscription.py
+++ b/erpnext/accounts/doctype/subscription/test_subscription.py
@@ -500,3 +500,51 @@ class TestSubscription(unittest.TestCase):
 		self.assertEqual(invoice.apply_discount_on, 'Grand Total')
 
 		subscription.delete()
+
+	def test_prepaid_subscriptions(self):
+		# Create a non pre-billed subscription, processing should not create
+		# invoices.
+		subscription = frappe.new_doc('Subscription')
+		subscription.subscriber = '_Test Customer'
+		subscription.append('plans', {'plan': '_Test Plan Name', 'qty': 1})
+		subscription.save()
+		subscription.process()
+
+		self.assertEqual(len(subscription.invoices), 0)
+
+		# Change the subscription type to prebilled and process it.
+		# Prepaid invoice should be generated
+		subscription.generate_invoice_at_period_start = True
+		subscription.save()
+		subscription.process()
+
+		self.assertEqual(len(subscription.invoices), 1)
+
+	def test_prepaid_subscriptions_with_prorate_true(self):
+		settings = frappe.get_single('Subscription Settings')
+		to_prorate = settings.prorate
+		settings.prorate = 1
+		settings.save()
+
+		subscription = frappe.new_doc('Subscription')
+		subscription.subscriber = '_Test Customer'
+		subscription.generate_invoice_at_period_start = True
+		subscription.append('plans', {'plan': '_Test Plan Name', 'qty': 1})
+		subscription.save()
+		subscription.cancel_subscription()
+
+		self.assertEqual(len(subscription.invoices), 1)
+
+		current_inv = subscription.get_current_invoice()
+		self.assertEqual(current_inv.status, "Unpaid")
+
+		diff = flt(date_diff(nowdate(), subscription.current_invoice_start) + 1)
+		plan_days = flt(date_diff(subscription.current_invoice_end, subscription.current_invoice_start) + 1)
+		prorate_factor = flt(diff / plan_days)
+
+		self.assertEqual(flt(current_inv.grand_total, 2), flt(prorate_factor * 900, 2))
+
+		settings.prorate = to_prorate
+		settings.save()
+
+		subscription.delete()