Billing Day Alignment During an ABO
There may be a requirement to align the start date of the billing periods to a new Billing Day of Month due to a contract re-alignment. For example, a seven days free trial is given to a customer starting from 1st of the month and the customer requested to convert the trial to an actual sale from 5th of the same month.
Note: A
similar functionality already exist. The core difference between the existing and the
new functionality is that the existing functionality prorates the 1st
billing period while aligning the new billing day of month while the new
functionality keeps the 1st period (after the trial period) as a full billing period and aligns it to
the new billing day of the month.
The settings, Billing Day of Month Criterion Field and Billing Day of Month Criterion Value are introduced on the Billing Preference object to execute this functionality. See Set-up Billing Preference for more.
During an ABO, when the Billing Day of Month Criterion Value is populated with the same value as asset line item's Criterion Field (custom field or any existing field, whose API name is populated in Billing Day of Month Criterion Field on billing preference), the billing app re-determines and updates the contract start date as the new billing day
of month on the billing schedules. For more information, see the example below.
Note: This should not be
confused with the already existing Billing Day of Month field on the billing
preference object. The Billing Day of Month field specifies when you want to
bill the customer. However the newly introduced settings, Billing Day Update
Criterion Field and Billing Day Update Criterion Value are used to overwrite
the exiting Billing Day of Month for specific asset line items. For example, a
new sale has 10 asset line items and the user wants to change the Billing Day of Month only for 3
line items, the user will update the criterion field only on 3 asset line
item where they want to see the changes.
New Sale
Consider a new sale is created for trial of a customer for one year starting from 01 January 2025 has a TCV (sales) of USD 0.00 and Quarterly billing frequency.
Note: A free trial period of 7 days is given to the customer. The customer may request to convert a trial to an actual sale before the end of the trial or after the trial period is over.
The Billing Preference has the following settings:
- Billing Cycle Start = Period Start Date
- Period Start Date = Billing Day of Month
- Billing Day of Month = 01
When billing is initiated, the following billing schedules are created:
| Schedule ID | Period Start Date | Period End Date | Fee Amount | Status | Billing Day of Month |
|---|---|---|---|---|---|
| BS-001 | 01 January 2025 | 31 March 2025 | USD 0.00 | Pending Billing | 1 |
| BS-002 | 01 April 2025 | 30 June 2025 | USD 0.00 | Pending Billing | 1 |
| BS-003 | 01 July 2025 | 30 September 2025 | USD 0.00 | Pending Billing | 1 |
| BS-004 | 01 October 2025 | 31 December 2025 | USD 0.00 | Pending Billing | 1 |
Amendment
Suppose that the customer wants to convert the trial to an actual contract for one year starting from 5 January 2025 with a TCV (sales) of USD 400.00 and Quarterly billing frequency.
Note: The customer wants the Billing Day of Month is aligned to the contract start date i.e 5th.
Copy the API name and value of the following custom field on the asset line item (assuming that the admin has created a custom field Billing Day of Month Overwrite on the ALI object):
- Billing Day of Month Overwrite = BDOM
Make sure that the following fields on the billing preference are populated:
- Billing Cycle Start = Period Start Date
- Period Start Date = Billing Day of Month
- Billing Day of Month Criterion Field = For example, BillingDayOfMonthOverwrite_c (copied API name of the custom field on asset line item, assuming that the admin has created a custom field Billing Day of Month Overwrite on the ALI object).
- Billing Day of Month Criterion Value = For example, BDOM (copied from the asset line item's custom field created by the admin).
When billing is initiated, the following billing schedules are created:
| Schedule ID | Period Start Date | Period End Date | Fee Amount | Status | Billing Day of Month | Remarks |
|---|---|---|---|---|---|---|
| BS-001 | 01 January 2025 | 31 March 2025 | USD 0.00 | Superseded | 1 | |
| BS-002 | 01 April 2025 | 30 June 2025 | USD 0.00 | Superseded | 1 | |
| BS-003 | 01 July 2025 | 30 September 2025 | USD 0.00 | Superseded | 1 | |
| BS-004 | 01 October 2025 | 31 December 2025 | USD 0.00 | Superseded | 1 | |
| BS-005 | 01 January 2025 | 04 January 2025 | USD 0.00 | Pending Billing | 5 | Additional BS to adjust the trial period |
| BS-006 | 05 January 2025 | 04 April 2025 | USD 100.00 | Pending Billing | 5 | Actual BS aligned with the contract start date and new Billing Day of Month |
| BS-007 | 05 April 2025 | 04 July 2025 | USD 100.00 | Pending Billing | 5 | Same as above |
| BS-008 | 05 July 2025 | 04 October 2025 | USD 100.00 | Pending Billing | 5 | |
| BS-009 | 05 October 2025 | 04 January 2026 | USD 100.00 | Pending Billing | 5 |
