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Changing Billing Schedules when you Shorten the End Date of an Asset
You are a customer service representative for a software company and you shorten the End Date of a customer's software subscription plan mid-cycle when the status of each Billing Schedule is Pending Billing.
Before you shorten the End Date of the subscription, you see the following Billing Schedules.
Schedule | Period Start | Period End | Status | Fee Amount | Superseded |
|---|---|---|---|---|---|
BS1 | 4/1/2015 | 4/30/2015 | Pending Invoiced | 100.00 | |
BS2 | 5/1/2015 | 5/31/2015 | Pending Invoiced | 100.00 | |
BS3 | 6/1/2015 | 6/30/2015 | Pending Invoiced | 100.00 | |
BS4 | 7/1/2015 | 7/31/2015 | Pending Billing | 100.00 | |
BS5 | 8/1/2015 | 8/31/2015 | Pending Billing | 100.00 |
After you shorten the End Date of the subscription, the number of and the status of each Billing Schedule changes.
Schedule | Period Start | Period End | Status | Fee Amount | Superseded |
|---|---|---|---|---|---|
BS1 | 4/1/2015 | 4/30/2015 | Superseded | 100.00 | Yes |
BS6 | 4/1/2015 | 4/15/2015 | Pending Billing | 50.00 | |
BS7 | 4/16/2015 | 4/30/2015 | Pending Billing | 112.50 | |
BS2 | 5/1/2015 | 5/31/2015 | Superseded | 100.00 | Yes |
BS8 | 5/1/2015 | 5/31/2015 | Pending Billing | 225.00 | |
BS3 | 6/1/2015 | 6/30/2015 | Superseded | 100.00 | Yes |
BS9 | 6/1/2015 | 6/15/2015 | Pending Billing | 112.50 | |
BS10 | 6/15/2015 | 6/30/2015 | Cancelled | 50.00 | |
BS4 | 7/1/2015 | 7/31/2015 | Cancelled | 100.00 | |
BS5 | 8/1/2015 | 8/31/2015 | Cancelled | 100.00 |
Because the end date of the Asset Line Item was reduced by 2.5 months and the Net Price has been set to 450.00, the monthly fee for the amended Term(4/15 – 6/15) will be increased from 100 per month to 225 per month.
Because the amendment is mid-cycle and the April Billing Schedule is unbilled it will be superseded and replaced with two new Billing Schedules.
- BS1 reflects the amount at the old rate for the partial period prior to the amendment date and will appear as a debit when an Invoice is generated.
- BS2 reflects the new amount for the partial period that was amended and will appear as a debit when an Invoice is generated.
Also, the Billing Schedule for May is unbilled it will be superseded with one new Billing Schedule. This new Billing Schedule will reflect the new monthly rate and will appear on the next Invoice generated for the corresponding Asset. the Billing Schedule for June is unbilled and its period has been shortened, it will be superseded and replaced with the following new Billing Schedules.
- The 1st new Billing Schedule reflects the new amount for the partial period that was amended and will appear as a debit when an Invoice is generated.
- The period in June is shortened and the 2nd new Billing Schedule reflects the amount for the partial period of June that is being dropped (because the End Date is shortened).
The Billing Schedules for July and August are unbilled and they are dropped (because the End Date was shortened) they are marked as Cancelled.
Example 1:
Consider another example where you shorten the End Date of the customer's software subscription plan mid-cycle when the status of some Billing Schedules is Pending Billing and others is Invoiced.
Before you shorten the End Date of the subscription, you see the following Billing Schedules.
Schedule | Period Start | Period End | Status | Fee Amount | Superseded |
|---|---|---|---|---|---|
BS1 | 4/1/2015 | 4/30/2015 | Invoiced | 100.00 | |
BS2 | 5/1/2015 | 5/31/2015 | Invoiced | 100.00 | |
BS3 | 6/1/2015 | 6/30/2015 | Invoiced | 100.00 | |
BS4 | 7/1/2015 | 7/31/2015 | Invoiced | 100.00 | |
BS5 | 8/1/2015 | 8/31/2015 | Pending Invoiced | 100.00 |
After you shorten the End Date of the subscription, the number of and the status of each Billing Schedule changes.
Schedule | Period Start | Period End | Status | Fee Amount | Superseded |
|---|---|---|---|---|---|
BS1 | 4/1/2015 | 4/30/2015 | Invoiced | 100.00 | Yes |
BS6 | 4/16/2015 | 4/30/2015 | Pending Billing | -50.00 | |
BS7 | 4/16/2015 | 4/30/2015 | Pending Billing | 112.50 | |
BS2 | 5/1/2015 | 5/31/2015 | Invoiced | 100.00 | Yes |
BS8 | 5/1/2015 | 5/31/2015 | Pending Billing | 125.00 | |
BS3 | 6/1/2015 | 6/30/2015 | Invoiced | 100.00 | Yes |
BS9 | 6/1/2015 | 6/15/2015 | Pending Billing | -50.00 | |
BS10 | 6/1/2015 | 6/15/2015 | Pending Billing | 112.50 | |
BS11 | 6/15/2015 | 6/30/2015 | Pending Billing | -50.00 | |
BS4 | 7/1/2015 | 7/31/2015 | Invoiced | 100.00 | Yes |
BS12 | 7/1/2015 | 7/31/2015 | Pending Billing | -100.00 | |
BS5 | 8/1/2015 | 8/31/2015 | Cancelled | 100.00 |
Because the amendment is mid-cycle and the April Billing Schedule has been invoiced it will remain as invoiced and will be augmented with the following new Billing Schedules.
- BS1 reflects the amount already paid for the partial period that was amended and will appear as a credit when an Invoice is generated.
- BS2 reflects the new amount for the partial period that was amended and will appear as a debit when an Invoice is generated.
The Billing Schedule for May is invoiced is augmented with one new Billing Schedule. This new Billing Schedule contains the additional amount not covered by the invoiced amount and will appear on the next Invoice generated for the corresponding Asset. The Billing Schedule for June was invoiced, remains as invoiced, and is augmented with the following new Billing Schedules.
- The 1st new Billing Schedule reflects the amount already paid for the partial period that is amended and appears as a credit when an Invoice is generated.
- The 2nd new Billing Schedule reflects the new amount for the partial period that is amended and appears as a debit when an Invoice is generated.
- Because the period in June is shortened, the 3rd new Billing Schedule reflects a credit for the partial period of June after the End Date is shortened.
Example 2:
Consider another example where you shorten the End Date and make it the same as the Start Date of the customer's software subscription plan mid-cycle to the same as the Start Date, when the status of some Billing Schedules is Pending Billing and others is Invoiced.
Before you shorten the End Date and make it the same as the Start Date of the subscription, you see the following Billing Schedules.
Schedule | Period Start | Period End | Status | Fee Amount | Superseded |
|---|---|---|---|---|---|
BS1 | 1/1/2015 | 1/31/2015 | Invoiced | 100.00 | |
BS2 | 2/1/2015 | 2/28/2015 | Invoiced | 100.00 | |
BS3 | 3/1/2015 | 3/31/2015 | Invoiced | 100.00 | |
BS4 | 4/1/2015 | 4/30/2015 | Pending Invoiced | 100.00 |
After you shorten the End Date of the subscription, the number of and the status of each Billing Schedule changes.
Schedule | Period Start | Period End | Status | Fee Amount | Superseded |
|---|---|---|---|---|---|
BS1 | 1/1/2015 | 1/31/2015 | Invoiced | 100.00 | |
BS2 | 2/1/2015 | 2/28/2015 | Invoiced | 100.00 | Yes |
BS5 | 2/8/2015 | 2/21/2015 | Pending Billing | -50.00 | |
BS6 | 2/8/2015 | 2/21/2015 | Pending Billing | 80.00 | |
BS7 | 2/22/2015 | 2/28/2015 | Pending Billing | -25.00 | |
BS3 | 3/1/2015 | 3/31/2015 | Invoiced | 100.00 | Yes |
BS8 | 3/1/2015 | 3/31/2015 | Pending Billing | -100.00 | |
BS4 | 4/1/2015 | 4/30/2015 | Cancelled | 100.00 |
Note
The new Term in this scenario is from 2/8/2015 to 2/21/2015 and the Net Price will be 80.00.
Because the amendment is mid-cycle and the February Billing Schedule has been invoiced it will remain as invoiced and because the end date of the Asset has been reduced to February it will be augmented with the following new Billing Schedules.
- BS1 reflects the amount already paid for the partial period that was amended and will appear as a credit when an Invoice is generated.
- BS2 reflects the new amount for the partial period that was amended and will appear as a debit when an Invoice is generated.
- BS3 is to account for the end of the period that is being dropped and will appear as a credit when an Invoice is generated.
The Billing Schedule for March is invoiced and is removed because the End Date is shortened. A new Billing Schedule is created to credit the amount that was already invoiced. Because the End Date is shortened and the period for August is unbilled, the Billing Schedule is marked as Cancelled.