7 Subscription Terms
Subscription terms specify a contract's commitment period, such as 1 month, 1 year, or 2 years.
Terms also specify whether customers:
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Can cancel the contract before the commitment period ends
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Are charged an early termination fee for canceling early
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Have a grace period, during which the early termination fee is waived
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Have their contracts renewed automatically when the commitment period ends
- Have a minimum contract period, after which penalty will be charged upon cancellation
For example, a term might specify a 1-year commitment period, allow early cancellation with a $250 early termination fee, and renew automatically with the same terms.
BRM includes standard terms that you can use for your contracts or use as examples when creating your own terms.
Creating a Subscription Term
To create a subscription term:
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In the Pricing section of the navigation pane, under Terms, click Create Terms.
The Create Terms page appears.
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Enter a name.
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For Commitment Period, click the length of the commitment: Monthly, 12 Months, 24 Months, 36 Months, or Custom.
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For Early Termination of Contract, specify whether to allow early cancellation of the contract and whether to apply an early termination fee:
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Allowed, No Penalty: Contracts can be canceled early, and customers will not be charged an early termination fee.
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Allowed, with Penalty: Contracts can be canceled early, but customers will be charged an early termination fee for doing so. To specify the amount to charge for early termination, see "Configuring Early Termination Fees".
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Not Allowed: Contracts cannot be canceled early.
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From Auto Renew, select whether to automatically renew the contract, and which terms to renew with.
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Click Finish.
The overview page for the subscription term appears.
Related Topics
Configuring Early Termination Fees
You can charge your customers an early termination fee if they cancel their contract early. You can use this fee to recoup the cost of equipment or discounts given to customers at the start of a contract; for example, recoup the cost of a cell phone that was provided for free with a wireless service subscription. You can also charge the early termination fee along with the balance remaining in the customer's contract.
An early termination fee can be one of the following:
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A flat fee, such as 100 US dollars or 75 euros.
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A fee that is reduced in equal amounts over the contract's commitment period. For example, if the early termination fee is $60 and the commitment period is 1 year, the fee would be reduced by $5 each month. A customer canceling after 1 month would pay $55, and a customer canceling after 8 months would pay $20.
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The balance remaining in the customer's contract. For example, in a 1-year commitment period with a $50 monthly charge, you would charge $50 for each month remaining in the contract. A customer canceling with 5 months remaining would pay $250, and a customer canceling with 3 months remaining would pay $150.
- A flat fee or a fee that is reduced in equal amounts over the contract's term, along with the balance remaining in the customer's contract. For example, in a 1-year commitment with a $100 early termination fee and a $20 monthly charge, you would charge a flat fee of 100 US dollars, and $20 for each month remaining in the contract. A customer canceling with 3 months remaining would pay $160.
You can also add a grace period, allowing your customers to cancel a contract within the first few days or weeks after purchase without incurring the early termination fee.
To apply an early termination fee:
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Under Early Termination of Contract, select whether to apply a flat fee, a fee that reduces over time, or the remaining contract balance. You can also apply both an early termination fee and the remaining contract balance.
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To apply a flat fee, select Charge an Early Termination Penalty and then enter the penalty amount such as 200 US Dollars or 75 Euros.
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To apply a fee that reduces over time, select Charge an Early Termination Penalty, enter the penalty amount such as 100 Euros, and then select Reduce penalty in equal amounts, based on time served in the contract.
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To apply the remaining contract balance, select Charge Remaining Balance of contract.
- To set a minimum contract period before allowing your customers to cancel their contract, select Minimum contract period required before cancellation is allowed.
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To add a grace period during which no early termination fee is applied, select No Penalty during a grace period and then enter values for the length of the grace period, such as 10 days or 1 month.
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In Penalty Revenue G/L ID, select the revenue general ledger ID to associate with the early termination fee.
If you do not select a general ledger ID, the early termination fee is distributed across deliverables in the contract only if deliverable-based revenue recognition is enabled.
Create Terms Page Reference
Use the Create Terms page to create a subscription term and define the length of the commitment period, whether to apply an early termination fee for canceling the contract early, and whether to automatically renew the contract at the end of the commitment period.
For a description of the fields, see:
Commitment Period
For Commitment Period, click one of these options to specify the length of the commitment period:
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Monthly
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12 Months
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24 Months
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36 Months
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Custom: Enter the number of days, months or years.
Related Topics
Early Termination of Contract
For Early Termination of Contract, specify whether to allow early cancellation of the contract and whether to apply an early termination fee. Select one of these options:
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Allowed, No Penalty: Contracts can be canceled early, and your customers will not be charged an early termination fee.
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Allowed, with Penalty: Contracts can be canceled early, but your customers will be charged an early termination fee for doing so. When you click this option, the Early Termination of Contract area displays additional fields. See "Allowed, with Penalty Option".
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Not Allowed: Contracts cannot be canceled early.
Allowed, with Penalty Option
Use the fields associated with the Allowed, with Penalty option to configure how much to charge your customers if they cancel their contract early.
| Field | Description |
|---|---|
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Charge an early termination penalty |
Select to apply a flat fee or a fee that is reduced in equal amounts over the contract's term. |
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Charge remaining balance of contract |
Select to apply a fee equal to the balance remaining in the customer's contract. |
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Penalty amount |
Enter the amount and currency of the early termination fee, such as 100 US Dollars or 240 Euros. This field appears only if you selected Charge an early termination penalty. |
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Reduce penalty in equal amounts, based on time served in the contract |
Select to reduce the early termination fee by equal amounts over the contract's term. For example, for a 1-year commitment period with an early termination fee of $120, the fee would be reduced by $10 each month. This field appears only if you selected Charge an early termination penalty. |
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No Penalty during a grace period |
Select to allow your customers to cancel a contract within the first few days or weeks after purchase without incurring the early termination fee. If you select this option, you must also specify the length of the grace period. |
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Penalty Revenue G/L ID |
Select the revenue general ledger ID to associate with the early termination fee. To distribute the fee across the deliverables in the contract, select Use revenue G/L IDs from contract deliverables. |
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Minimum contract period required before cancellation is allowed |
Select to set a minimum contract period before allowing your customers to cancel their contract. |
Related Topics
Auto Renew
Use Auto Renew to specify whether the contract renews automatically at the end of the commitment period. For example, you can create a subscription term that automatically renews with the same 1-year commitment or with a different monthly commitment. Select one of the following:
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No: The contract is not renewed at the end of the commitment period.
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Yes, renew using: At the end of the commitment period, the contract automatically renews using the subscription term you select. You can select the same term or a different term.
Related Topics