Rounding the Decimal Values for Renewals and Amendments

Billing implements a logic that defers the rounding-off of the balances arising from renewals, cancellations, change operations, proration, odd selling terms, partial periods, or amendments in the middle of the period to either the first or last billing period. The implementation of the logic is governed by setting the Fee Amount Rounding Schedule to First or Last.

Use Case: Rounding the Decimal Values for Renewal Operation

When an existing product or service is renewed, the application shifts the rounded decimal values to the first or last billing period.

Upon renewal, the TCV (Sales)  is updated with the sum of the previous TCV (Sales) and the renewed amount. The amount in the Billable Amount from the Current Order Line Item field on the billing header is updated to the sum of the renewed billing schedule records (BSRs) fees. In other words, the sum of fees of all the BSRs (before and after renewal) equals the TCV (Sales) of the subscription.

For example, a new sale is initiated for a product or service with a TCV (Sales) of USD 1,000.00. The billing frequency is quarterly. The contract is for nine months, starting from 01-July-2024 and ending on 31-March-2025. Initiating the billing creates a billing header and three BSRs. The Fee Amount Rounding Schedule is set to Last in the Billing Settings.

New Sale

For a new sale, the billing header has the following data:

The BSRs have the following data. Since the Fee Amount Rounding Schedule is set to Last, the application shifts the rounded decimal values to the last period (here BSR-3).

After Renewal

You wanted to renew the service for its entire term with the same TCV (Sales). While renewing, you changed the setting, Fee Amount Rounding Schedule to First in the Billing Settings, so the application shifts the rounded decimal values to the first period (here BSR-4). Initiating the billing creates a billing header and three more BSRs with the same fee amount because the TCV (Sales) remains unchanged.

The billing start date and end dates are 01-April-2024 and 31-December-2025 respectively. The TCV (Sales) field is updated with the sum of the previous TCV (Sales) and the renewed amount. The Billable Amount for Current OLI field is updated with the current renewed amount. The billing header has the following data:

The BSRs have the following data. Since the Fee Amount Rounding Schedule is set to first, the application shifts the rounded decimal values to the first period after renewal (here BSR-4).

Use Case: Rounding the Decimal Values for Cancellation

Cancellation of a product or service may be a full-term or mid-term cancellation. In both types of cancellations, there may be schedules in Pending Billing or Invoiced statuses. When cancellation is initiated, the schedules in Pending Billing status are canceled and the ones in Invoiced status are refunded after cancellation. So the rounding of decimal values is not applicable for the cancellation operation. For more details on cancellation operation, refer to Full-Term Cancellation of Products and Mid-Term Cancellation of Products.

Consider the example given in the previous use case (Use Case: Rounding the Decimal Values for Renewal Operation). You want to initiate a full-term cancellation for this product or service effective from 01-July-2024. Based on the setting Superseding the Schedules during Asset Management is set to Always Supersede or Minimize, the cancellation BSRs and BSDs are shown below.

Setting "Superseding the Schedules during Asset Management" to Minimize

The BSRs are:

The BSDs are:

Setting "Superseding the Schedules during Asset Management" to Always Supersede

The BSRs are:

Because all the schedules are canceled, so rounding the decimals is not applicable for any type of cancellation.

Use Case: Rounding the Decimal Values for Change Operation

Price changes may occur due to a discount or markup on the fee amount. When there is a rounding-off of the balances due to price change, the application shifts the rounded decimal values to the first or last billing period.

For example, a new sale is initiated for a product or service with a TCV (Sales) of USD 1,200.00. The billing frequency is quarterly. The contract is for nine months, starting from 01-July-2024 and ending on 31-March-2025. Initiating the billing creates a billing header (not shown here for simplicity) and three BSRs. The first BSR is invoiced.

You provided a discount of USD 25.00 (as an absolute value) for the entire term. When this amount is updated on Billable Amount from the Current Order Line field on the billing header, it is distributed based on the setting Superseding the Schedules during Asset Management is set to Always Supersede or Minimize, to the new BSRs and BSDs as shown below.

Setting "Superseding the Schedules during Asset Management" to Always Supersede

The BSRs are:

The schedules for Setting "Superseding the Schedules during Asset Management" to Minimize are not shown here. The end result remains the same as above.