Enable Periodic Billing for One-Time Charges
Instead of billing one-time charges at the start of a subscription, you can use the Enable periodic billing checkbox to bill the one-time charges throughout the subscription duration, based on the billing frequency.
You can enable this checkbox for one-time charges in the Pricing tab.
Things to Keep in Mind
Here are some things to keep in mind:
-
The application prorates one-time charges for partial periods. In this scenario, the full one-time charge is collected during subscription billing duration. For more information, see the Partial Period Billing topic.
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One-time charges can't be billed periodically for evergreen subscriptions.
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When you select the Enable pricing term checkbox, the one-time charges are billed periodically only over the duration of the initial term even when you enable the Generate billing schedule for full period check box in the Pricing tab.
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The application considers the charge adjustments while periodically billing one-time charges. For example, when you apply a 20 percent discount on a one-time charge, the same is reflected in the billing summary.
The application applies the charge adjustment for the entire duration of a subscription. Any rounding adjustment is added to the last billing period. However, the manual adjustments is applied on individual bill lines and rounding adjustment can be added to selected periods so that it doesn't apply to all periods.
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In case of termination, the application bills one-time charges based on the close credit method.
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Renewed subscriptions and duplicate subscriptions aren't impacted by this feature as one-time charges aren't copied to renewed or duplicated subscriptions.
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Interface date will always be the bill-from date or system date, whichever is later if you have an "in advance" invoice, and bill-to date if you have an "in arrears" invoice. The interface date won't change when you run the Send Subscription Billing Information to Receivables process.
Examples of Enabling Periodic Billing
This example illustrates how the application generates the billing schedule when you enable the Enable periodic billing check box for one-time charges.
Configuration
Let's assume you have configured the application such as:
-
Product
Product
Quantity
Start Date
End Date
Bill Frequency
Invoice Rule
Billing Date
Period Start
Product 1
1
1-Jan-20
31-Dec-23
Year
Advance
Period Start
Calendar Month
-
Charges
Charge
Periodicity
Unit Price
Periodic Billing for the one-time charge
Software Fee
(One-time charge)
N/AA $4000
Enabled
Support Fee
Year
$500
N/A
Scenario 1
In this scenario, here's how the application generates the billing summary:
|
Period |
Charge |
Interface Date |
Bill-from Date |
Bill-to Date |
Amount |
|---|---|---|---|---|---|
|
1 |
Software Fee |
1-Jan-20 |
1-Jan-20 |
31-Dec-20 |
1000 |
|
1 |
Support Fee |
1-Jan-20 |
1-Jan-20 |
31-Dec-20 |
500 |
|
2 |
Software Fee |
1-Jan-21 |
1-Jan-21 |
31-Dec-21 |
1000 |
|
2 |
Support Fee |
1-Jan-21 |
1-Jan-21 |
31-Dec-21 |
500 |
|
3 |
Software Fee |
1-Jan-22 |
1-Jan-22 |
31-Dec-22 |
1000 |
|
3 |
Support Fee |
1-Jan-22 |
1-Jan-22 |
31-Dec-22 |
500 |
|
4 |
Software Fee |
1-Jan-23 |
1-Jan-23 |
31-Dec-23 |
1000 |
|
4 |
Support Fee |
1-Jan-23 |
1-Jan-23 |
31-Dec-23 |
500 |
The one-time charge of $4000 has been distributed over the subscription duration of 4 years and billed as $1000 per year.
Scenario 2
Now, let's look at the same configuration again. In this scenario, let's assume that you have invoiced the subscription from January 2020 to December 2021 and the subscription is terminated on 1st July 2021 with the Close Credit Method set as Prorate with credit. Here's how the application generates the billing summary:
|
Period |
Charge |
Interface Date |
Bill-from Date |
Bill-to Date |
Amount |
|---|---|---|---|---|---|
|
1 |
Software Fee |
1-Jan-20 |
1-Jan-20 |
31-Dec-20 |
1000 |
|
1 |
Support Fee |
1-Jan-20 |
1-Jan-20 |
31-Dec-20 |
500 |
|
2 |
Software Fee |
1-Jan-21 |
1-Jan-21 |
31-Dec-21 |
1000 |
|
2 |
Support Fee |
1-Jan-21 |
1-Jan-21 |
31-Dec-21 |
500 |
|
2 |
Support Fee |
1-July-21 |
1-July-21 |
31-Dec-21 |
-250 |
|
3 |
Software Fee |
1-July-21 |
1-Jan-22 |
31-Dec-22 |
1000 |
|
4 |
Software Fee |
1-July-21 |
1-Jan-23 |
31-Dec-23 |
1000 |
However, the subscription is terminated on 1st July 2021, the application generates period 3 and period 4 lines as the revenue recognition happen immediately for the one-time charge. When you select the Close Credit Method set as Full, the application creates an additional line to refund $2000 charged as the one-time charge. In this case, period 3 and period 4 lines aren't created in the billing summary.