Example 1

You are a customer service representative for a software company and you must change the Billing frequency from Quarterly to Monthly for a customer's software subscription plan, mid-cycle when the status of each Billing Schedule is Pending Billing.

Before you change the Billing frequency of the subscription from Quarterly to Monthly, you see the following Billing Schedules.

Schedule

Period Start

Period End

Status

Fee Amount

Superseded

BS1

7/1/2015

9/30/2015

Invoiced

90.00


BS2

10/1/2015

12/31/2015

Invoiced

90.00


BS3

1/1/2016

3/31/2016

Pending Billing

90.00


After you extend 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Superseded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

7/1/2015

9/30/2015

Invoiced

90.00

Yes

BS4

8/1/2015

9/30/2015

Pending Billing

-60.00


BS5

8/1/2015

8/31/2015

Pending Billing

20.00


BS6

9/1/2015

9/30/2015

Pending Billing

20.00


BS2

10/1/2015

12/31/2015

Invoiced

90.00

Yes

BS7

10/1/2015

12/31/2015

Pending Billing

-90.00

     

BS8

10/1/2015

10/31/2015

Pending Billing

20.00

    

BS9

11/1/2015

11/30/2015

Pending Billing

20.00

 

BS10

12/1/2015

12/31/2015

Pending Billing

20.00


BS3

1/1/2016

3/30/2016

Superseded

90.00

Yes

BS11

1/1/2016

1/31/2016

Pending Billing

20.00


BS12

2/1/2016

2/29/2016

Pending Billing

20.00


BS13

3/1/2016

3/31/2016

Pending Billing

20.00


BS14

4/1/2016

4/30/2016

Pending Billing

20.00


The new Term is now 8/1/2015 – 4/30/2016 (9 months) and the new Net Price is 180.00, the Fee amount is 20.00 per month.  When you transition from a less frequent Billing Frequency (like quarterly) to more a frequent Billing Frequency (like monthly), a credit Billing Schedule is created for each whole period Billing Schedule that is invoiced. 

Because the billing frequency change is mid-cycle and the July-September Billing Schedule has been invoiced it will remain as invoiced and will be augmented with the following new Billing Schedules.

  • BS4 reflects the amount for the partial period that is being amended (at the original billing frequency and rate) and will appear as a credit when an Invoice is generated.
  • BS5 reflects the amount to charge for the first month within the amended partial period of the quarter.
  • BS6 reflects the amount to charge for the second month within the amended partial period of the quarter.

Also, the October-December Billing Schedule has been invoiced it will remain as invoiced and will be augmented with the following new Billing Schedules. 

  • BS7  is a credit for the amount that was invoiced.
  • BS8 reflects the amount to charge for the first month within the 2nd quarter.
  • BS9  reflects the amount to charge for the second month within the 2nd quarter.
  • BS10 reflects the amount to charge for the third month within the 2nd quarter.

The January-March Billing Schedule is unbilled and is marked as Superseded and augmented with the following new Billing Schedules.

  • BS11 reflects the amount to charge for the first month within the 3rd quarter.
  • BS12 reflects the amount to charge for the second month within the 3rd quarter.
  • BS13 reflects the amount to charge for the third month within the 3rd quarter.

The End Date of the Asset Line Item is extended by 1 month to 4/30/2016 an additional Billing Schedule, BS14 is created to accommodate the extension.

Example 2

Consider another example where you must change the Billing frequency from Monthly to Quarterly, for a customer's software subscription plan, mid-cycle when the status of some Billing Schedules is Pending Billing and others is Invoiced.

Before you change the Billing frequency of the subscription from Monthly to Quarterly, you see the following Billing Schedules.

Schedule

Period Start

Period End

Status

Fee Amount

Superseded

BS1

3/1/2015

3/31/2015

Invoiced

100.00


BS2

4/1/2015

4/30/2015

Invoiced

100.00


BS3

5/1/2015

5/31/2015

Invoiced

100.00


BS4

6/1/2015

6/30/2015

Invoiced

100.00


BS5

7/1/2015

7/31/2015

Invoiced

100.00


BS6

8/1/2015

8/31/2015

Pending Invoiced

100.00


After you extend 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

3/1/2015

3/31/2015

Invoiced

100.00


BS2

4/1/2015

4/30/2015

Invoiced

100.00

Yes

BS7

4/16/2015

4/30/2015

Pending Billing

-50.00


BS8

4/16/2015

5/31/2015

Pending Billing

50.00


BS3

5/1/2015

5/31/2015

Invoiced

100.00

Yes

BS4

6/1/2015

6/30/2015

Invoiced

100.00

Yes

BS9

6/1/2015

8/31/2015

Pending Billing

100.00


BS5

7/1/2015

7/31/2015

Invoiced

100.00

Yes

BS6

8/1/2015

8/31/2015

Superseded

100.00

Yes

The new Term is now 4/16 – 8/31 (4 ½ months) and the new Net Price is 450.00, the Fee amount is 300.00 every quarter. The amendment was performed on 4/16 with the Billing Cycle Start defined as the Period Start Date and the Calendar Cycle Start is June, the 1st period is from 4/16 to 5/31. After this period the quarters is aligned with 6/1 so the next period is from 6/1 to 8/1.

Because the billing frequency change is mid-cycle and the April Billing Schedule has been invoiced it will remain as invoiced and will be augmented with one new Billing Schedule. The new Billing Schedule reflects the amount for the partial period that is being amended (at the original billing frequency and rate) and will appear as a credit when an Invoice is generated.

Because the billing frequency change goes into effect 4/16 and the 16th does not align with the Start Period Date (3/1) a partial period will be created for the 1st new quarter. The Billing Schedule for May has already been invoiced, remains as invoiced, and is superseded by BS8. BS9 is created with a quarterly billing frequency that is from 6/1/2015 - 8/31/2015. It supersedes the 3 Billing Schedules for the months of June, July, and August. The Fee Amount is 300.00 but, because you Invoiced the schedules for June and July, the Fee amount is reduced to 100.00.