Updating the Billing Header Fields on Renewal

The billing header of a product has fields that keep on updating when new billing schedule records (BSRs) are created because of renewal functionality or when new billing schedule details (BSDs) are created to include the adjustments related to miscellaneous charges.

Updating the Total Adjusted Amount Field

The Total Adjusted Amount field on the billing header stores the amount arising due to adjustments done on any of the BSRs. For more information on how to do the adjustments, see Adjusting the Billing Amount with Manual Entries. The adjusted amount is rolled up to the BH and is added to the existing value (if any) in the Total Adjusted Amount field.

Consider the following example:

An Evergreen service is billed for USD 1,200.00 every quarter. The TCV (Sales) field on the BH has a value of USD 1,200.00. Billing is initiated, and four BSRs (BSR-1, BSR-2, BSR-3, and BSR-4) are created with a fee amount of USD 300.00 and invoiced. 

The auto-renewal term is set to 2, hence two new BSRs are created because of auto-renewal functionality.

In the above example, say you have created an adjustment of USD 50.00 on BSR-5. A new BSD-5 is created with a fee amount of USD 50.00.

The adjusted amount of USD 50.00 is rolled up to the BH and the Total Adjusted Amount field on the BH is updated to USD 50.00.

Updating the Total Bill Including Adjustments Field

The total bill including adjustments reflects the total amount as a sum of TCV (Sales) and the total adjusted amount. This is the total bill amount payable by the customer.

Considering the above example, 

Total Bill Including Adjustments = TCV (Sales) + Total Adjusted Amount = USD 1,200.00 + USD 50.00 = USD 1,250.00.

Updating the Billing Preference Field

When the renewal of a product or service is initiated through a renewal OLI, the API creates the renewal BSRs per the values in the new billing preference on that renewal transaction.

Example

For a new sale, the billing start date is 01-Jul-2023, the billing end date is 30-Jun-2024, the billing frequency is quarterly, and TCV (Sales) is USD 1,200.00. You initiated the billing so that four BSRs are generated. The fee amount of the BSRs is USD 300.00 each. Consider the following scenarios:

Updating the Billing Frequency Field

When you change the billing frequency during the renewal operation, the API considers the updated value of the billing frequency on the billing header and creates the renewal BSRs per the renewal term and new billing frequency.

Example

A recurring product has a monthly billing frequency and TCV (Sales) is USD 1,200.00. The billing start date is 01-Jan-2024 and the billing end date is 31-Dec-2024. When the billing was initiated, the application created 12 BSRs under the BH for the year 2024. The product undergoes renewal in the year 2025 where the billing frequency remains unchanged. Consider the scenarios:

Before renewal

You initiated the billing so that twelve BSRs are generated. The fee amount of the BSRs is USD 100.00 each.

BSR-1: 01-Jan-2024 to 31-Jan-2024 with a fee of USD 100.00

BSR-2: 01-Feb-2024 to 29-Feb-2024 with a fee of USD 100.00

........

BSR-11: 01-Nov-2024 to 30-Nov-2024 with a fee of USD 100.00

BSR-12: 01-Dec-2024 to 31-Dec-2024 with a fee of USD 100.00

After renewal

You renewed the contract for one year, and the billing frequency and TCV (Sales) remain unchanged. Billing is initiated so that twelve BSRs are generated. The fee amount of the BSRs is USD 100.00 each.

BSR-1: 01-Jan-2025 to 31-Jan-2025 with a fee of USD 100.00

BSR-2: 01-Feb-2025 to 28-Feb-2025 with a fee of USD 100.00

........

BSR-11: 01-Nov-2025 to 30-Nov-2025 with a fee of USD 100.00

BSR-12: 01-Dec-2025 to 31-Dec-2025 with a fee of USD 100.00

You can see that for a renewal term of one year with a monthly billing frequency, twelve new billing schedules are created. If the billing frequency is changed to Quarterly, then the application creates four BSRs. Similarly, for a half-yearly billing frequency, it creates two BSRs and for a yearly billing frequency, it creates one BSR. Assuming that there are no partial periods, the following table summarizes the changes in billing frequency and the resultant number of BSRs generated:

Updating the Billing Rule

When you update the billing rule on the billing header as a part of the renewal operation, the billing application populates the "new" Ready for Invoice Date field on the renewal BSRs per the new billing rule. If you modify the ready-for-invoice date for a period in an ongoing cycle, the modification is discarded during the renewal operation, and the ready-for-invoice date is populated per the new billing rule and not per your modified dates. Similarly, the application ignores splits on BSRs in an ongoing cycle during renewal.

Example

A recurring product's billing start date is 01-Jan-2024 and its billing end date is 31-Dec-2024. It has a quarterly billing frequency. There are no partial periods but there is a split in one of the quarters. The billing rule is "Bill in Advance". Initiating the billing creates four billing schedules. The application updates the ready-for-invoice date of BSR-002 to 10-Apr-2024 and splits BSR-003 into two new BSRs as the customer requires. All the BSRs are invoiced.

The product is renewed but the billing rule on the billing header remains "Bill in Advance". The effects of renewal on the ready-for-invoice date and the status of BSRs are as follows:

Say, the product is renewed again but the billing rule on the billing header is updated to "Bill in Arrears". This change affects renewal on the ready-for-invoice date as follows:

Assume the product or service is renewed again but the billing rule on the billing header is reverted to "Bill in Advance". This change affects renewal on the ready-for-invoice date as follows: