Example 1

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Superseded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Superseded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Superseded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Superseded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Superseded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 is reduced by 2.5 months and the Net Price is set to 450.00, the monthly fee for the amended Term(4/15 – 6/15) is increased from 100 per month to 225 per month.

Because the amendment is mid-cycle and the April Billing Schedule is unbilled, it is then superseded and replaced with two new Billing Schedules.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 is calculated as a debit when an Invoice is generated.
  • BS2  reflects the new amount for the partial period that was amended and is calculated as a debit when an Invoice is generated.

Also, the Billing Schedule for May is unbilled and is superseded with one new Billing Schedule. This new Billing Schedule reflects the new monthly rate and is calculated in the next Invoice that you generate for the corresponding Asset. The Billing Schedule for June is unbilled and its period is shortened, it is superseded and replaced with the following new Billing Schedules.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 is calculated as a debit when you generate an Invoice.
  • The period in June is shortened and the 2nd new Billing Schedule reflects the amount for the partial period of June that is dropped because the End Date is shortened.

The Billing Schedules for July and August are unbilled and they are dropped because the End Date is shortened they are  marked as Cancelled.

Example 2

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


Note

The End Date of the Asset Line Item is reduced by 2.5 months and the Net Price is set to 450.00, the monthly fee for the amended Term(4/15 – 6/15) is increased from 100 per month to 225 per month.


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.

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 3

Consider another example where you shorten the End Date 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



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.