The property can take payment for the prepaid bookings any time from the point of booking up to and including check-out. Not taking payment prior to check-in is quite commonplace.

Although there's no strict cut-off after which the property just takes payment upon check-out, in my experience (and as you would expect) it happens more frequently when you are booking close to the check-in date such that the property just doesn't get around to it.

The other thing to note is that just because they haven't yet taken payment, it doesn't mean you are free to cancel the booking - they will still have the right to charge you the cancellation fee even if, at the point of cancelling it, they had not charged the cost of the room.