Billing Schedules for Cancelled Assets
Business Context
When a customer cancels a subscription or service mid-cycle, the business still needs an accurate financial record of what was actually owed versus what should no longer be billed. Conga Billing addresses this by marking any future, not-yet-billed schedules as Canceled once a product is terminated, so no further invoicing occurs for that period. If a schedule was already invoiced before the cancellation takes effect, Billing doesn't simply delete it; instead, it supersedes the schedule and generates offsetting entries with negative equivalent amounts to accurately credit the customer for the unused portion.
This mid-cycle proration logic (e.g., generating separate schedules for the "still active" versus "canceled" partial periods) ensures revenue recognition stays accurate down to the day, rather than at the billing-period level. Together, this gives billing administrators and finance teams a clean audit trail that reflects exactly what was billed, credited, and canceled whenever a customer ends service partway through a term.
Cancellation of Recurring Subscriptions Mid-Cycle
A telecommunications subscription is billed for 5 months starting from 1st January 2015 with a recurring frequency.Example 1
When you cancel an asset, the cancellation is effective only after one day's time.
Before you cancel the subscription, you see the following Billing Schedules.
|
Billing Schedule |
Period Start |
Period End |
Status |
Fee Amount |
Superseded |
|---|---|---|---|---|---|
|
BS1 |
1/1/2015 |
1/31/2015 |
Pending Billing |
100.00 | |
|
BS2 |
2/1/2015 |
2/28/2015 |
Pending Billing |
100.00 | |
|
BS3 |
3/1/2015 |
3/31/2015 |
Pending Billing |
100.00 | |
|
BS4 |
4/1/2015 |
4/30/2015 |
Pending Billing |
100.00 | |
BS5 | 5/1/2015 | 5/31/2015 | Pending Billing | 100.00 |
After you cancel the subscription, you see that status of schedules changes.
|
Billing Schedule |
Period Start |
Period End |
Status |
Fee Amount |
Superseded |
|---|---|---|---|---|---|
|
BS1 |
1/1/2015 |
1/31/2015 |
Pending Billing |
100.00 | |
|
BS2 |
2/1/2015 |
2/28/2015 |
Superseded |
100.00 |
Yes |
|
BS6 |
2/1/2015 |
2/14/2015 |
Pending Billing |
50.00 | |
|
BS7 |
2/15/2015 |
2/28/2015 |
Cancelled |
50.00 | |
|
BS3 |
3/1/2015 |
3/31/2015 |
Cancelled |
100.00 | |
|
BS4 |
4/1/2015 |
4/30/2015 |
Cancelled |
100.00 | |
BS5 | 5/1/2015 | 5/31/2015 | Cancelled | 100.00 |
In the above example, because you cancelled the subscription mid-cycle, the original Billing Schedule is superseded and replaced by the following new Billing Schedules.
- BS6 is for the partial period that is still active and has not been billed.
- BS7 is for the partial period that has been cancelled.
Also, because the Billing Schedules for March and April are unbilled their status is set to Cancelled.
Example 2
When you cancel an asset, the cancellation is effective only after one day's time.
Before you cancel the subscription, you see the following Billing Schedules.
Billing 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 | |
BS5 | 5/1/2015 | 5/31/2015 | Pending Billing | 100.00 |
After you cancel the subscription, you see that status of schedules changes.
Billing 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 |
BS6 | 2/15/2015 | 2/28/2015 | Cancelled | 50.00 | |
BS7 | 2/15/2015 | 2/28/2015 | Pending Billing | -50.00 | |
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 | |
BS5 | 5/1/2015 | 5/31/2015 | Cancelled | 100.00 |
In the second example, because you cancelled the subscription mid-cycle, the Billing Schedule for February is invoiced and is augmented with two new Billing Schedules.
- BS6 is for the partial period that was cancelled and is used to record that portion of the invoiced amount that was cancelled.
- BS7 is also for the partial period that was cancelled and it is used to generate an Invoice Line Item in order to reflect the credit for the portion of the invoiced amount that was cancelled.
Because the entire period for March is already invoiced it augments a single Billing Schedule that is used to generate an Invoice Line Item that then reflects the credit for the invoiced amount was cancelled. The Billing Schedules for April and March are unbilled their status is changed to Cancelled.
Cancellation of One-Time Subscriptions Mid-Cycle
Example 1:
When you cancel an asset, the cancellation is effective only after one day's time.
Before cancellation, you see the following Billing Schedule.
|
Billing Schedule |
Start Date |
End Date |
Status |
Fee Amount |
Superseded |
|---|---|---|---|---|---|
|
BS1 |
1/1/2016 |
6/30/2016 |
Pending Billing |
200 |
After cancellation, the status of the Billing Schedule will be Pending Billing and no refund amount is credited to the customer.
|
Billing Schedule |
Start Date |
End Date |
Status |
Fee Amount |
Superseded |
|---|---|---|---|---|---|
|
BS1 |
1/1/2016 |
6/30/2016 |
Pending Billing |
200 |
If the product is invoiced and then you terminate it, the status of Billing Schedule will be Invoiced and no refund amount is credited to the customer.
|
Billing Schedule |
Start Date |
End Date |
Status |
Fee Amount |
Superseded |
|---|---|---|---|---|---|
|
BS1 |
1/1/2016 |
6/30/2016 |
Invoiced |
200 |
Cancellation of One-Time Subscriptions on Start Date
Assume that you have to cancel a customer's one-time product 'Installation Device MF9' on start date of the billing cycle.
Example 1
If the status of the billing schedule is "Pending Billing".
Before cancellation, you see the following Billing Schedule.
|
Billing Schedule |
Start Date |
End Date |
Status |
Fee Amount |
Superseded |
|---|---|---|---|---|---|
|
BS1 |
1/1/2016 |
6/30/2016 |
Pending Billing |
200 |
After cancellation, the status of the Billing Schedule will be as follows depending on the same day cancellation criteria being enabled or disabled.
|
Cancellation Criteria |
Billing Schedule |
Start Date |
End Date |
Status |
Fee Amount |
Superseded |
|---|---|---|---|---|---|---|
|
Same day cancellation = True |
BS1 |
1/1/2016 |
6/30/2016 |
Canceled |
200 | |
|
same day cancellation = False |
BS1 |
1/1/2016 |
6/30/2016 |
Pending Billing |
200 |
Example 2
If the status of the billing schedule is "Invoiced".
Before cancellation, you see the following Billing Schedule.
|
Billing Schedule |
Start Date |
End Date |
Status |
Fee Amount |
Superseded |
|---|---|---|---|---|---|
|
BS1 |
1/1/2016 |
6/30/2016 |
Invoiced |
200 |
After cancellation, the status of the Billing Schedule will be as follows depending on the same day cancellation criteria being enabled or disabled.
|
Cancellation Criteria |
Billing Schedule |
Start Date |
End Date |
Status |
Fee Amount |
Superseded |
|---|---|---|---|---|---|---|
|
Same day cancellation = True |
BS1 |
1/1/2016 |
6/30/2016 |
Invoiced |
200 |
Yes |
|
BS2 |
1/1/2016 |
6/30/2016 |
Pending Billing |
-200 | ||
|
same day cancellation = False |
BS1 |
1/1/2016 |
6/30/2016 |
Invoiced |
200 |
- Accurate revenue recognition.
- Lower manual effort and fewer errors.
- Faster finance close and healthier cash flow visibility.