Overview
When creating a customer account, it is necessary to configure the bill cycle day (also known as the BCD or anniversary date) to determine which day of the month a customer’s subscription will be billed on. If changing the BCD in the middle of a billing period is necessary, it is important to understand the effects it will have on billing. As a best practice, we recommend keeping a customer’s BCD the same for the duration of their subscription billing period. When a BCD is changed, it may result in extra charge lines with pro-rated amounts, invoices, and transactions, which may be confusing to your customers. This article shows you exactly what the invoices will look like in the event a BCD is changed.
Solution
The BCD can be changed from the Billing and Payment Term section of an account detail page. If Auto-Set is used for the BCD, the intial setting of the BCD to a specific day of the month is unnecessary. When the BCD of an account is changed in the middle of a billing period, effects vary based on the charge types associated with the subscription.
For one time charges, there is no effect, since these charges bill on the date they are triggered on.
For recurring charges, a prorated charge is generated to pre-pay for the time between the end of the previous billing period and the start of the following billing period. (See example below.)
For usage charges, effects are complex and may vary. For all current usage charge models, save Per Unit Pricing, if you are using the End of Billing Period usage rating option, Zuora will not pro-rate the charge and thus will not bill for the partial month. Billing will resume for the next full billing period. The Per Unit Pricing charge model does support partial billing periods if the Z-Billing Settings for Proration are set to enabled. If using the Per Unit Pricing usage charge model with the on demand usage rating option, changing the BCD will change the open period for a charge. See On Demand Usage Rating for more information on open and closed periods and how these periods are impacted by changing the BCD.
Example
This example will demonstrate the effects of changing the BCD of an account during the billing cycle for a subscription with a recurring charge.
Initially, Account A is set up with a BCD of the 20th of the month. Account A has a subscription that consists of a single recurring monthly charge and the subscription has a term start date of 11/20/2011.
- On 11/20/2011, the customer is charged for one month of service up until 12/19/2011, as expected.
After this charge has been picked up by the billing engine, a user changes the customer’s BCD from the 20th of the month to the 10th of the month. - On 12/20/2011, a charge will be incurred that bridges the gap between the end of the service period that was already charged and the beginning of the next billing cycle (on 1/10/2012), namely from 12/20/2011 to 01/09/2012. The service period for this charge is less than one month (21 days in fact), so the amount of the charge is prorated accordingly.
- On 1/10/2012, the customer is once again charged for one month of service up until 2/09/2012. From this point forward, service periods will begin on the 10th of each month.
Related
- Proration
- You can set proration from the Z-Billing Billing Rules settings. If the trigger date is not aligned to the bill cycle day, the billing behavior depends on whether you have enabled the Prorate partial charges for partial months feature.
- Dates in Zuora
- Understanding how different dates operate in Zuora is key to your success with Z-Billing and Z-Payments. These topics describe the dates in subscriptions and amendments and the date attributes in the product catalog rate plan charge and customer accounts. Dates are an important part of your billing and payments operations, and control which charges are billed and when they are processed for payment. For example, Subscription Dates determine when your charges are ready to be billed. When the charges are actually billed depends on your Bill Cycle Day and other date attributes.
- Date Format and Datetimes in Zuora
- Zuora uses the MM/DD/YYYY date format, and the GMT-08:00 timestamp.
- Subscription and Amendment Dates
- Customer Account Dates: Bill Cycle Day
- The bill cycle day (BCD), located in the Billing and Payment Term section of the customer account page, determines the day of the month that the customer will be billed.
- Product Catalog Dates: Product Rate Plan Charge Date Attributes
- When you define your products, rate plans, and rate plan charges in your product catalog you can also specify certain rate plan charge attributes (in the Timing and Frequency of Charges section) that affect when the charge is billed once it has been added to a subscription. Subscriptions contain the products, rate plans, and rate plan charges that the customer has purchased. You can set the charge to bill based on the customer account’s bill cycle day, or create a schedule for the charge.
- Filter Statements
- Export ZOQL supports multiple filter statements that you can use when building queries.
- How do I bill for recurring charges now and bill for usage later?
- How do I bill in advance?
- How do I redirect the email notifications for our scheduled billing and payment runs to a different email address?
- How do I use batches to optimize my billing and payments?
- How do I use proration in Zuora?
- How do I verify the charges on my invoice are correct?
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