Understanding "Catchup" schedule in the Legacy Billing Period

When you do not invoice a legacy asset line item as per the recurring billing, Conga Billing does not recognize such invoices. In such a scenario, Conga Billing creates fresh billing schedules and introduces a catch-up amount to align the legacy billing with the recurring billing. Conga Billing calculates the catch-up amount by using the following formula and then invokes its logic to decide if catch-up is required or not.

Catch-up amount = remaining billable amount – (net unit price * quantity * billing term)

• If the remaining billable amount = 0, the fee amount of the first billing schedule equals Total Contact Value (TCV), Conga Billing does not create subsequent billing schedules.
• If the remaining billable amount = (net unit price * quantity * billing term), Conga Billing does not create a catch-up amount.

• If the remaining billable amount ≠ (net unit price * quantity * billing term), Conga Billing creates a catch-up amount.

Catch-up amount helps Conga Billing to align the billable amounts with the CPQ Pricing of the asset line. This is imperative to check the massive revenue leakage.

catch-up amount can be positive or negative.

When billing is initiated, Conga Billing creates a waterfall of billing schedules depending on the "Billing Term". The first record is for the legacy period, with the Type field set to "Informational" and the Status field set to "Invoiced". The second billing schedule is for catch-up amount with the Type field set to "Contracted" and the Status field set to "Pending Billing". In subsequent billing schedules, the Type field is set to "Contracted" and the Status field to "Pending Billing".

Example

Suppose you are a billing administrator of a company selling computer hardware with a TCV of $5400 for 36 billing terms. You have already invoiced the customer for $2066.67 over a 16-months billing period and the remaining billable amount is $3333.33, to be billed over 20 months. The legacy contract was started in 2018 but the last known major price or config happened on 7/20/21. So the asset's start date is 7/20/21. The first Billing Date is 11/20/0222. The legacy in Conga should have details as mentioned in the table.

Ideally, you should have invoiced the customer for an amount of ($150 * 16 = $2400), but due to inconsistent billing, the invoiced amount is $2066.67. Hence Billing creates a catch-up amount of $333.33 ($2400 – $2066.67) to align it with the recurring billing. Conga Billing creates 22 billing schedules, BS-001 for the already billed amount in the legacy system with the Type field set to Informational, BS-002 for the catch-up amount with the Type field set to Contracted, and subsequent normal billing schedules for 20 months.

Conga Billing creates a billing schedule for the catch-up amount if the invoicing is not done in a recurring manner in the legacy system.