Advancing the Term of Recurring Products Having Calendar Cycle Start Month

When you request to advance the term of a recurring product guided by calendar cycle start date, to the Change endpoint, Billing modifies the fields on the activated billing header per the change request or displays an error message.

Prerequisites

• The Superseding the Schedules during Asset Management setting is set to Always Supersede or Minimize.
• The current OLI's or ALI's Delta Price field is strictly populated to USD 0.00.

• The selling term remains the same as the previous sale.

• The Calendar Cycle Start field is not null or none.

Calendar Cycle Start Set to January

The calendar cycle start month aligns the billing schedules to a defined calendar month. For example, there is a new sale with a contract term of one year and quarterly billing frequency. The calendar cycle start month is January, and the contract starts from 01-May-2024 to 01-April-2025. Since January is set as the calendar cycle start month, the application creates the quarterly billing periods so that January becomes a period start date and not an intermediate month of a specific quarter. Practically it can be assumed that the application creates the quarters backwards from 01-December-2024 to 01-May-2024 and then forward from 01-January-2025 to 01-April-2025. The quarters would be; the 1st partial quarter from May 2024 to June 2024, 2nd quarter from July 2024 to September 2024, 3rd quarter from October 2024 to December 2024, 4th quarter from January 2025 to March 2025, and the last quarter is a partial quarter of only one month, April 2025.

Hence the billing cycle start date will be 01-May-2024 rather than 01-April-2024.

Use Case: Advancing the Term When Calendar Cycle Start Month is Selected

When you select the calendar cycle start month, it may interfere with the term of the billing schedule records as elaborated in the preceding section. In this scenario, when the quarters align with the calendar cycle start month, several schedules overlap with the previous periods.

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 process:

• For the new periods added due to the advancement of the term, the application creates new billing schedule records (BSRs) and billing schedule details (BSDs) in Pending Billing status. The fee amount is computed per the full or partial term of that BSR.
• For the periods that remain unchanged or overlap with the prior periods in the same date range, the application retains the existing BSRs and BSDs irrespective of their invoice status.
• For the periods that are not a part of the contract after the change, the application cancels the billing schedules depending on their invoice status and the setting, Superseding the Schedules during Asset Management set to Always Supersede or Minimize.
  • When the BSRs outside of the contract period are in Pending Billing status and Superseding the Schedules during Asset Management is set to Minimize: The application creates individual counter-BSDs to offset the previous positive fee amount for all the BSDs in the truncated period and marks them canceled. The fee amount is rolled to the BSRs, making the fee amount equal to USD 0.00 and marking them canceled.
  • When the BSRs outside of the contract period are in Pending Billing status and Superseding the Schedules during Asset Management is set to Always Supersede: The application cancels the BSRs and their accompanying BSDs.
  • When the BSRs outside of the contract period are in Invoiced status and the setting Superseding the Schedules during Asset Management is set to either Minimize or Always Supersede: The application refunds the fee amount by creating new BSRs and BSDS in Pending Billing status.
• On the billing header (BH),
  • The values in the Billing Start Date, Billing End Date, and Billable Amount from the Current Order Line fields are updated to the corresponding values from the current OLI or ALI fields.
  • The values in the Selling Term and TCV (Sales) fields remain unchanged.

For 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-July-2024 and the end date is 30-June-2025. The calendar cycle start month is January. Initiating the billing creates a billing header and four BSRs with a fee of USD 300.00 each. 

New Sale

During the new sale, you invoiced BSRs 1 through 3. The billing header has the following data:

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

After Change

Suppose the term is advanced by one quarter. Per the explanation (Calendar Cycle Start Set to January), the billing start date is 01-May-2024 and the billing end date is 30-April-2025. You want to send this term change to the existing billing header using a new OLI. When the OLI is activated and initiated for billing, the billing engine applies the term changes to the header and adjusts the schedules as shown below

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

The application creates a new BSR-5 in Pending Billing status with a fee of USD 200.00. The period unaffected by the change operation (BSR-1 to BSR-3) remains unchanged. The truncated period (BSR-4) is partially canceled for May 2025 and June 2025 which are not a part of the contract now. The BSR-4 has a fee of USD 100.00 after partial cancellation. Since BSD-4 is in Pending Billing status, counter-BSD, BSD-4.a is created to offset the positive fee amount of BSD-4 for May 2025 and June 2025.

The BSRs are as shown:

The BSDs are as shown:

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

The application creates two new BSRs, BSR-5 in Pending Billing status with a fee of USD 200.00 for May 2024 to June 2024 and BSR-6 with a fee of USD 100.00 for April 2025. The period unaffected by the change operation (BSR-1 to BSR-3) remains unchanged. The truncated period (BSR-4) is marked canceled. No counter-BSDs are created.

The BSRs and BSDs are: