Full-Term Cancellation of Products

Full-term cancellation of a product or a service means canceling the product or service on the start date or one day before the start date (start date − 1) of the contract, depending on whether the setting Same-Day Cancellation is set to True or False. You can make a full-term cancellation of a one-time, recurring, or evergreen product whether the billing periods are invoiced or not.

When the billing periods are not invoiced, it implies that the billing schedule Rrecords (BSRs) and billing schedule details (BSDs) are still in the Pending Billing status. When you initiate the cancellation process, the BSRs and the BSDs are marked as canceled. The adjustments, if any, are also marked as canceled. The Status field on the billing header (BH) is updated to Pending Inactivation and the Pending Invoice Amount field is updated to USD 0.00 since there is no refund.

When the billing periods are invoiced, it implies that at least one or few of the BSRs and the corresponding BSDs are in the Invoiced status. When you initiate the cancellation process of the product or service, new BSRs and BSDs with negative fee amounts are created for the corresponding invoiced BSRs and BSDs. The Status field on the BH is updated to Pending Inactivation, and the Billable Amount from the Current Order Line, Total Invoiced Amount, and Pending Invoice Amount fields are updated as a result of the new BSDs' rolled-up fee amount. The concept is illustrated in the following diagram:

The Conga Platform's Billing architecture allows you to choose between "minimize" or "always supersede" the schedules for an asset-based ordering (ABO) operation.

If the setting Superseding the Schedules during Asset Management is set to "minimize", the application limits the superseding of schedules by creating a billing schedule detail (BSD) with a delta fee under the existing billing schedule record (BSR). if any BSRs are in Pending Billing status and they are in the cancellation period, the engine creates a new counter-BSD under that BSR with a negative fee amount equal to that of the existing BSD.

If the setting Superseding the Schedules during Asset Management is set to "always supersede", the engine supersedes the uninvoiced schedules (BSRs) of the impacted period and creates new BSRs and BSDs with the period's overall fee.

Irrespective of the above settings, the engine's cancellation behavior is not altered, and the calculated amounts in the various fields on the billing header (BH) remain unchanged.

For more on how Billing works on the Conga Platform, see  Understanding the Billing Architecture on Conga Platform.

Based on the pricing source chosen in the Billing Settings, the pricing information is fetched from the order line item (OLI) or asset line item (ALI). When the pricing source is set to OLI, Billing fetches all the information, including the pricing information, from the OLI. If the pricing source is set to ALI, Billing fetches the pricing information from the ALI. For more details on pricing sources, see Managing Pricing Source.

Prerequisite

• Same-day cancellation is set to:
  • True if the cancellation is initiated on the start date.
  • False if the cancellation is initiated one day before the start date (start date − 1).
• The Superseding the Schedules during Asset Management setting is set to Minimize or Always Supersede.

Use Case: Full-Term Cancellation

Making a full-term cancellation API request updates all Pending Billing or Pending Invoiced BSRs to Canceled status. For invoiced BSRs, this creates a new BSR and BSD line with a negative fee amount equal to each BSR's fee amount. If the BSR is in Pending Invoiced status, the corresponding invoice in Draft status is also canceled.

Contact your admin to make this functionality available in your application so that clicking a button calls the billing services API.

At the end of the cancellation process:

• The Line Status field on the current OLI is updated to Canceled.
• The OLI that cancels the asset is updated in the billing header.
• The billing header's Status field is updated to Pending Inactivation.
• The billable amount in the billing header's Current Order Line Item field shows the amount to be refunded.
• For each invoiced BSR, new BSRs and accompanying BSDs are created. The fee amount of the newly created BSRs and BSDs is equal to the negative amount of the canceled BSRs.
• Any adjustments to the BSDs (accompanying the invoiced BSRs) are also refunded.

• All pending BSRs are updated to Canceled. Accompanying BSDs and adjustments on the BSDs are also canceled.

• For evergreen products, no additional auto-renew schedules are created because the OLI is canceled.

Consider the example:

A new sale is initiated for a service with a TCV (Sales) of USD 1,200.00. The billing frequency is quarterly. The start date is 01-January-2024 and the end date is 31-December-2024. You initiated the billing so that the billing header and four BSRs with a fee amount of USD 300.00 each are created. You have created three adjustment BSDs with a fee amount of USD 100.00, USD 100.00, and USD 50.00 for the period starting from 01-January-2024, 01-July-2024, and 01-October-2024 respectively. Due to the adjustments, the fee amounts of BSR-1, BSR-3, and BSR-4 are updated to USD 400.00, USD 400.00, and USD 350.00 respectively. 

Full-Term Cancellation When Schedules are Not Invoiced

When you initiate a full-term cancellation, the BSRs and the BSDs in Pending Billing status are marked as canceled. The BH status is marked as Pending Inactivation and the Pending Invoice Amount field is updated to USD 0.00 since there is nothing to refund. Because setting "Superseding the Schedules during Asset Management" to Minimize or Always Supersede does not affect this flow, no separate example is given here.

Full-Term Cancellation When Few Schedules are Invoiced

After invoicing BSR-1, and BSR-2, the billing header looks like a normal BH showing the following data:

The data of the four BSRs and BSDs along with the adjustment BSDs are shown in the table:

After Cancellation

You canceled the product or service on the start date so the cancellation goes into effect from 01-January-2024. The Current OLI and Current Order Number fields on the BH are updated to the newly activated OLI, which is used to initiate the cancellation process. The End Date field on the BH is updated to the OLI cancellation date. The TCV (Sales) field is updated to show the sum of the Previous TCV (Sales) value and Billable Amount from the Current Order Line. The Billable Amount for Current OLI field shows the amount to be refunded. The Total Adjusted Amount field is updated to USD 0.00 because all the BSDs are canceled. The Status field on the BH is updated to Pending Inactivation.

Scenario 1: Setting "Superseding the Schedules during Asset Management" to Minimize.

After cancellation, various fields on the BH are updated as follows:

At the end of the cancellation process, BSRs and adjustment BSDs are marked as canceled. For the invoiced BSRs, new BSRs are created with the refund amount.

The BSRs and adjustment BSDs in the Pending Billing status after the cancellation date are marked as canceled. Counter-BSDs are created for records  canceled in Pending Billing status. These BSDs can be used to offset the revenue forecast from the previous BSDs during the same period.

BSDs, adjustment BSDs, and counter-BSDs are as follows:

Scenario 2: Setting "Superseding the Schedules during Asset Management" to Always Supersede.

You have canceled the order such that the cancellation goes into effect from 01-January-2024.. After cancellation, various fields on the BH are updated as follows:

At the end of the cancellation process, the BSRs and adjustment BSDs are marked as canceled. For the invoiced BSRs, new BSRs are created with the refund amount. The BSRs and adjustment BSDs in the Pending Billing status after the cancellation date are marked as canceled.