Bill Using Estimated Usage

For a usage-based subscription product, you can bill your customer in advance based on estimated usage.

In the Pricing tab, you can price your usage charge based on:

The estimated amount or estimated quantity along with invoicing rule.
The minimum amount or minimum quantity.

Once you have billed your customer based on estimated usage, you can run the True Up Usage Bill Lines scheduled process, after you get the actual usage, to true up the billed amount. This scheduled process compares the amount that was billed based on estimated usage against actual usage and creates a settlement.

You can also define a minimum committed usage threshold per charge period, either in conjunction with or independent of defining an estimate. If the actual usage for the billing period falls below the defined minimum threshold, the application uses the minimum usage value for billing.

If you set up both the minimum and estimated usage, the estimated usage value must be higher than the minimum usage value. You can set up the minimum or estimated usage for subscriptions in the draft status. Once a subscription is activated, these fields become read-only, but you can amend the subscription to change them.

Add Estimated Usage

Here's how you can define estimated usage values and true up the billed amount:

Navigate to the Subscription details page.
From the Products section, select a usage-based product.
On the Edit Product page, click the Pricing subtab.
1. Optionally, enter a value in the Minimum Amount or Minimum Quantity field.
2. Click the Add icon in the Estimation column to add estimation values.
In the Usage Estimation window:
1. Select the Estimation Method value as Estimated quantity or Estimated amount.
2. Enter a value in the Estimated Quantity or Estimated Amount field.
3. Select Invoicing Rule as Advance Invoice or Arrears Invoice.
4. Click Save and Close.
Note: The application populates the usage charge type only when you're using estimated usage, because: .
- You estimate usage, and a new line is generated with the estimated amount.
- At the end of the month, the application calculates the difference and there will be a third line with a true up value (which can be billed if it was more than the estimated value or credited if it is less).
Usage charge type will have one of the following values: Actual, Estimated, or Trueup.
Click the Billing Summary tab to see the new rows added for the estimated charge and verify the usage quantity and amount.
In the Billing Summary tab page, click Actions and select Generate Billing Schedule Lines to generate the billing schedule lines.
Activate the subscription.
From a row with the usage quantity, click Action and select Update Usage Quantity to make changes in the usage quantity.
Run the Acquire Subscription Usage Data from an External Web Service scheduled process to obtain usage quantity values for actual bill lines.
Run the Fetch Pricing Information for Subscriptions and Generate Billing Schedule scheduled process to obtain the amount for actual bill lines.
Run the Send Subscription Billing Information to Receivables scheduled process to interface bill lines. After running this scheduled process, the application updates the Interfaced value for the estimated bill lines as Y in the Billing Summary tab.
Run the True Up Usage Bill Lines scheduled process to adjust or true up the billed amount.

Bill Lines with the Same Charge ID

For bill lines with the same charge_id, if one of the bill periods doesn’t have any readings, usage readings won't get updated correctly. Say, for example, there are 4 bill lines with same charge_id and all of them have meter readings except line 2. In this case, the application updates meter readings only for bill line 1.

Keep in mind:

Every meter should have an initial reading.
All past bill periods should have at least one reading.
You can run the Acquire Subscription Usage Data from an External Web Service scheduled process only once for a bill period. Any meter reading entered after running the process is computed against the following month.

Update Estimated Usage Quantities

You can update estimated usage quantities of usage-based subscription products over the contract period based on past or projected consumption. You can update the estimated usage quantities on non-interfaced lines only.

Here’s how you can update estimated usage quantities:

Navigate to the Edit Product page of a usage-based subscription product.
Click the Billing Summary tab.
Navigate to a non-interfaced billing line and click the gears icon in the Actions column.
Click Update Usage Quantity.
In the Usage Estimation Window:
- Select the Estimation Method value as Estimated Quantity.
- Enter the updated value of estimated usage quantity in the Estimated Quantity field.
Click Save and Close.

Note: Regenerate Billing Lines once Estimated Quantity is updated at Product Charge level.

Things to Keep in Mind

Here are a few things to keep in mind when using estimated usage:

If billing occurs more frequently than the charge period or if there's a partial period billing, the estimate and minimum usage value are prorated for that bill line accordingly.
You can't interface the Actual bill line to Accounts Receivable and this usage charge type doesn't show any invoice details such as Interface Date, Invoice Text, Invoice Date, Invoice Number, and so on.
When you terminate a subscription before the application obtains actual usage values and the True Up Usage Bill Lines scheduled process completes, the application generates a credit based on the billed amount. This amount is prorated based on the closed or suspended date. Once the actual usage is available, the true up scheduled process makes necessary adjustments based on the billed amounts.
When amending a subscription, the application copies estimation attributes to the new draft subscription line. But, when duplicating a subscription, the charges aren't copied. Therefore, no estimation attributes are copied from the original to the new subscription.
In the Usage Estimation window, when you select the invoicing rule as Advance Invoice:
- The application bills the usage charge in advance based on the estimation method.
- The application creates settlements for the billing period when the actual usage values are obtained.
- The date of the settlement credit memo is tied to the last month's invoice.
In the Usage Estimation window, when you select the invoicing rule as Arrears Invoice:
- The application bills the usage charge based on the actual usage if the usage reading is available.
- The application uses estimated reading when the actual usage reading isn't available. After the actual usage values are obtained, the application creates settlements for the billing period.

You can only update estimated usage quantities and not the estimated usage amount.
You can’t update the estimated usage quantities of interfaced bill lines.