Recurring Charges Billing: Seat-Based Pricing
When you've used a Counter to set up recurring charges pricing for a Product Plan, attached the priced Plan to an Account that consumes the Product, and created Counter Adjustments on the Account for a billing period, you can generate Bills for the Account.
In this topic, we'll use the seat-based pricing example set up in the previous two topics to run Bills for Accounts to review and check how the recurring charges have been calculated.
To recap on this example, we:
Created the Premium Seats Counter and used it to set up a Tiered pricing for Premium Seats Plan 2: up to 20 seats at $2 per seat; 21 and above seats at $3 per seat. All prorating of charges or credits - for Counter running totals, Counter adjustments debits, and Counter adjustment credits - was disabled.
Attached the priced Plan to Seats Account 2 for a service period June 1st 2024 until June 30th 2025 inclusive. The Plan was configured for monthly billing frequency, no Standing Charge or Minimum Spend amounts were defined, and USD billing currency was used.
Created Counter Adjustments using Premium Seats Counter on Seats Account 2:
For 15 seats on June 1st 2024.
For 18 seats on June 15th 2024.
To illustrate how billing charges are calculated for this seat-based pricing example:
Running Billing - Prorating Disabled First, we'll first leave all prorating disabled and run billing for the June 2024 and July 2024 billing periods.
Running Billing - Prorating Enabled Second, we'll enable prorating for the different Counter charge and credit types and re-run billing to show how prorating is applied for these types at billing.
Important! Before you attempt to work through this topic, please first review the previous topics for Creating Counters and Pricing Plans and Understanding and Creating Counter Adjustments for Accounts.
Running Billing - Prorating Disabled
With prorating disabled for all Counter charge and credit types:
First, we'll generate the Bill for the June 2024 billing period for Seats Account 2.
Second, post some additional Counter Adjustments on Seats Account 2 and run billing for the July 2024 billing period.
To run billing for an Account:
1. Select Accounts. The Accounts created for the Organization are listed.
2. Select the NAME hotlink text for Seats Account 2. The Account page opens with the Overview tab selected.
3. Select the Bills tab.
4. Select Run billing. A Run billing dialog opens.
5. On the dialog:
Invoice date. Use the calendar pop-out to select July 1st 2024.
Bill Frequency. Select Monthly.
Target currency. Select US Dollar.
6. Select Run billing. The modal closes and the Bill job executes. When the Bill job completes the newly generated Bill is listed on the Bills tab.
7. Select the REFERENCE hotlink text for the Bill. The Bill opens in Bill Management:
On review, we can see that:
The two Counter Adjustments we made on the Account appear on this first bill as line item charges of TYPE:
Counter running total charge. For the initial adjustment posted for 15 seats to start the running total on the Account.
Counter adjustment debit. For the second adjustment, which increased the number of seats by 3, and the Bill shows this correctly as an additional charge to give the correct total.
Because prorating is disabled for all Counter charge types, although the second Counter Adjustment was posted on the Account on June 15th and therefore the extra 3 seats were only subscribed to for the remaining days of the 30-day month, the full $2 per seat charge is applied.
Lastly, charges can be expanded to show a breakdown which gives relevant details: Plan, Counter, and Counter Pricing period.
We now extend the example to:
Post two more Counter Adjustments on Seats Account 2 using Premium Seats Counter for the month of July:
On July 1st 2024 for an increase to 22 seats.
On July 20th 2024 for a decrease back down to 20 seats.
8. Re-run billing as Step 6 above but this time set the Invoice Date to August 1st 2024 for the July billing period.
9. When the August 1st 2024 Bill appears on the Bills tab, open it in Bill Management:
On review, we can see that:
The number of seats at the end of the previous billing period - June 2024 - was 18 and the Counter Adjustment posted of July 1st 2024 increased the seats Counter number to 22. This becomes the Counter running total for the start of the next billing period - July 2024. We therefore see the first line item charge is of TYPE - Counter running total charge, and which means on the Tiered pricing we applied to the Account Plan, 20 seats each incur a charge of $2 and 2 seats each incur a charge of $3.
The second Counter Adjustment of July 20th 2024 decreased the seats Counter number from 22 to 20, which means a credit of 2 seats at a rate of $3 is given. This line item is of TYPE - Counter adjustment credit.
Running Billing - Prorating Enabled
You can enable prorating for the Counter adjustment debits or credits due at billing under a unit-based product pricing model. For example, if you are billing Accounts monthly and an end-customer increases their units subscription mid-month, you might want to only charge the customer for the extra units for the remaining days of the month billing period and not as if they had subscribed to them for the entire month:
In a similar way, you can enable prorating for Counter running total charges under a unit-based product pricing model. This is useful in cases where, for example, you are billing monthly but the contract service period on an Account ends mid-month. You might then want the final bill to apply Counter running total charges for only those days of the final month before the contract service period ended and not for the entire month:
Prorating for Counter Adjustment Credits and Debits
For the current seat-based pricing example, we'll:
First, edit the Counter pricing applied to Premium Seats Plan 2 to enable prorating for Counter adjustment credits and Counter adjustment debits.
Second, re-calculate the sample Bills we created in above to review and check that prorating for these Counter charge types has been correctly applied.
To enable prorating for Counter adjustments debits and credits and re-calculate Bills:
1. Open the Pricing Editor and select the Premium Seating Product.
2. Select Add Plans and add Premium Seats Plan 2.
3. In the pricing grid, select Edit. The Counter Pricing>Edit page opens.
4. Under Counter Pricing Settings, select the Pro-rate adjustment credit and Pro-rate adjustment debit switches to enable them.
5. Select Update Counter Pricing. The Edit page closes and you are returned to the Pricing Editor.
6. Open Seats Account 2 and select the Bills tab on the Account page.
7. Select the checkbox for the July 1st 2024 Bill generated earlier and then click Recalculate selected. The Bill job executes and when complete, you'll see the TOTAL amount adjusts.
8. Select the Bill's REFERENCE text hotlink to open it in Bill Management:
On review, we can see the total for the Bill has been reduced:
The Counter running total charge of $30 for the initial 15 seats on Account remains unchanged since the Counter Adjustment posted on the Account was made June 1st and so these seats were subscribed to for the entire month.
However, the Counter adjustment debit charge for the extra 3 seats due the Counter Adjustment for 18 posted to the Account June 15th has been prorated for the 16 days remaining of the 30-day month of June. The prorating is calculated by adjusting the UNIT PRICE charged per seat accordingly - that is, with a base rate of $2 per seat per month: $2/30 x 16 = $1.067, which amounts to a Counter adjustment debit charge of $3.20 (3 x $1.067) for 3 extra seats.
9. Return to the Seats Account 2 page and on the Bills tab, select the checkbox for the August 1st 2024 Bill generated earlier and then click Recalculate selected. The Bill job executes and when complete, you'll see the TOTAL amount adjusts.
10. Select the Bill's REFERENCE text hotlink to open it in Bill Management:
On review, we can see that the total for the Bill has increased:
The Counter running total charge remains the same as when we first generated the Bill.
The Counter adjustment credit amount has now reduced, since the Counter Adjustment posted to the Account of 20 was made on July 20th 2024, and the credit due is prorated for the remaining 12 days of the 31-day month of July instead of for the full month. The prorating is calculated by adjusting the UNIT PRICE credit due per seat accordingly - that is, with a base rate of $3 per seat per month: $3/31 x 12 = $1.161, which amounts to a Counter adjustment credit of -$3.20 (2 x $1.161) for 2 fewer seats.
Prorating for Counter Running Total Charges
In this section, we take our current seat-based pricing example and edit the Counter pricing for the Account Plan such that it ends August 15th 2024, that is, mid-way through the third monthly billing period:
First, edit the pricing to end mid-billing period - August 15th.
Second, with prorating disabled, we'll generate the Bill for the August billing period - dated September 1st 2024.
Third, we'll then edit the pricing again to enable prorating for Counter running total charges.
Fourth, recalculate the September 1st Bill to review and check how the prorating has been applied at billing.
To enable pro-rating for Counter running total and re-calculate Bills:
First, edit the Pricing to end on August 15th 2024:
1. Open the Pricing Editor and select the Premium Seating Product.
2. Select Add Plans and add Premium Seats Plan 2.
3. In the pricing grid, select Edit. The Counter Pricing>Edit page opens.
4. Under Counter Pricing Details, change the End date to August 16th 2024 - End dates for pricing are exclusive so this means the Pricing will apply to the Plan up to midnight on August 15th 2024.
5. Select Update Counter Pricing.
Second, run billing for the August 2024 billing period:
6. From the Accounts page, select to open Seats Account 2. The Account page opens with the Overview tab selected.
7. Select the Bills tab.
8. Select Run billing. A Run billing dialog opens.
9. On the dialog:
Invoice date. Use the calendar pop-out to select September 1st 2024.
Bill Frequency. Select Monthly.
Target currency. Select US Dollar.
10. Select Run billing. The modal closes and the Bill job executes. When the Bill job completes the newly generated Bill is listed on the Bills tab.
11. Select the REFERENCE hotlink text for the Bill. The Bill opens in Bill Management:
On review, we can see that even though the pricing ceases to apply to the Account Plan on August 15th 2024, the Counter running total charge is for the full amount of 20 seats at $2 per seat.
Third, enable prorating for Counter running total charges:
12. Open the Pricing Editor again and select the Premium Seating Product.
13. Select Add Plans and add Premium Seats Plan 2.
14. In the pricing grid, select Edit. The Counter Pricing>Edit page opens.
15. Under Counter Pricing Settings, enable the Pro-rate running total switch.
16. Select Update Counter Pricing.
Fourth, re-calculate the September 1st 2024 Bill:
17. Return to the Bills tab on the Seats Account 2 page
18. Select the checkbox for the September 1st 2024 Bill and click Recalculate selected. The Bill job executes and when complete, you'll see the TOTAL amount adjusts.
19. Select the REFERENCE hotlink text for the Bill. The Bill opens in Bill Management:
On review, with pro-rating enabled, we can see that the Counter running total charge has been reduced. The prorating is calculated by adjusting the UNIT PRICE per seat accordingly - for the 15 days the pricing was active for the Account Plan, with a base rate of $2 per seat per month: $2/31 x 15 = $0.967, which amounts to a Counter running total charge of $19.35 (20 x $0.967) for 20 seats.
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