Billing Schedules for a product (whether one-time or recurring) are a distribution of the net amount of a contract, based on the chosen Billing Frequency. Billing Schedules determine the amount that should be billed to the customer once or over a period of time.


Input Required

From CPQ 

Field NameDescription
Start DateThe date when a customer starts getting billed for the purchase. This field translates to Period Start Date on Billing Schedules. This value is stored as Expected Start Date on the Proposal.
End DateThe date till when a customer is billed for the purchase.This field translates to Period End Date on Billing Schedules. This value is stored as Expected End Date on the Proposal.
PriceThe total amount of purchase.

From Product PLI (Price List Item) 

Field NameDescription
Billing RuleFor every Billing Schedule, the date when invoice should be generated is based on the Billing Rule. The field Ready for Invoice Date on Billing Schedules is processed from the Billing Rule. Following are the options for the Billing Rule:
  • Bill in Advance - To invoice the receivables at the beginning of the schedule.
  • Bill in Arrears - To invoice the receivables at the end of the schedule.
  • Bill on Ready for Billing Date - To bill your customer with a consolidated invoice, on a day of their choice.
Billing Frequency

Billing Frequency is how the product price over a period is distributed and billed to an account. The Billing Frequency for a product can be set to:

  • Monthly - To generate a bill once every month
  • Quarterly - To generate a bill once every three months
  • Half-yearly - To generate a bill once in the middle of a calendar or financial year.
  • Yearly - To generate a bill once every year
  • Weekly - To generate a bill once every week
  • Usage - To generate a bill based on usage or consumption
  • One-Time - To generate a one-time bill.

For example, a product ‘Health App’ priced $3000 has the Billing Frequency set to Monthly. Monthly Billing Schedules will be created and invoiced at a price of $250/month. If Billing Frequency for the same product is changed to Quarterly, quarterly Billing Schedules will be created and invoiced at a price of $750 each quarter.

From Billing Preferences 

Field NameDescription
Bill Cycle Start 

Billing Cycle Start can be any day on which you want to bill customers. Billing Schedules are aligned on the basis of Billing Cycle Start. You can select one of the following options:

  • Billing Day of the Month - value specified in the Billing Day of Month field.
  • Billing Day of the Week - Value specified in Billing Day of Month field. Select this option to generate weekly billing schedules. 
  • Period Start Date - value from Expected start date field on Asset Line Item
  • Order Date - value from Order Date field in the activated order.
  • Account Billing Day of the Month - value from Billing Day of Month field on Accounts. Select this option, if you want to set a common billing day for all orders in an account.
Billing Day of the Month

Day of the month when you want to bill your customer. For example, to set ‘10’ as the Billing Day, select 10th of the month from the picklist.

If you select End of the month, the Billing Day is set to the last day of each month as and when the schedule advances. For example, Billing Day of Month will be ‘31’ for March and ‘30’ for April.

Note: This field holds significance only if you set ‘Billing Cycle Start’ to ‘Billing Day of Month’.

Billing Day of the Week

Day of the week when you want to bill your customer. For example, if you set it to Monday, Billing Schedules will be aligned in a Monday to Sunday weekly cycle.

Note: This field holds significance only if you set Billing Cycle Start to Billing Day of the Week. 

Proration Period Treatment To define how you want to distribute the billing amount proportionally between the first and last Billing Schedules, select Separate Period from the picklist options.
  • Separate Period - To create a separate Billing Schedule for the outstanding amount.

Billing Schedule Alignment

Billing Schedules are aligned on the basis of Billing Cycle Start field on Billing Preferences.

Billing Schedule for an asset takes the Expected Start Date mentioned on the Proposal Line and Order Line as the starting point for generating the schedules. To align rest of the duration, it looks up to the value provided in the Billing Cycle Start. You have the flexibility to choose Billing Day from other objects such as Account, Quote/Proposal, and Order.

The Ready for Invoice Date is calculated based on the Billing Rule as follows,

  • For Bill in Arrears: Ready for Invoice Date= Period End Date + 1
  • For Bill in Advance: Ready for Invoice Date= Period Start Date


Use Case

Standalone Recurring product

Tier1 system sells ‘SecureDevice’ ($100/unit) which is billed monthly for a contract period of one year. The contract is in effect from 04/20/2016. The customer wants an invoice on 15th of every month.

Steps:

  1. Add a product ‘SecureDevice’ with List Price as $100 and Price Type as Recurring.
  2. Under the Tax and Billing tab on PLI, set the Billing Rule as Bill in Advance and Billing Frequency as Monthly.
  3. Create a new Billing Preference and set Billing Cycle Start to Billing Day of month.
  4. Set Billing Day of month to 15th of the month.
  5. Create a Quote/Proposal. Set Start Date as 04/20/2016 and End Date as 04/19/2017.
  6. Add the product to your cart and Finalize.
  7. Present the proposal and Accept it after the reviews.
  8. Order and Asset are created the moment a Proposal is accepted. Activate the order.


 Resulting Billing Schedules

Period Start DatePeriod End DateReady for Invoice DateAmount
4/20/20165/14/20164/20/2016$83.33

5/15/2016

6/14/2016

5/15/2016

$100

6/15/2016

7/14/2016

6/15/2016

$100