In the previous section, we described customer accounts. In Zuora, a customer account can have multiple subscriptions that contain information about what that customer has purchased and when those products/services should be billed.
In this section, you will learn how billing for a subscription is different from billing for a one-time charge, and how Zuora helps you manage the full subscription life cycle from initial order creation to renewal.
In a subscription business model, a customer signs up for products or services and pays a subscription fee on a recurring basis for continued access. The fee can be paid monthly, quarterly, or annually. This business model gives subscription businesses a consistent and predictable revenue stream, and helps end-customers take advantage of more flexible price options.
Zuora's product suite helps subscription businesses manage and track the entire life cycle of a customer's subscription from the initial order to renewals and changes in between. A Zuora subscription represents a set of products or services that a customer has purchased. A subscription includes all the information on how a customer is to be charged for use of that subscription. We ensure that the customer is automatically billed for payment on time and in every billing period. We also track changes when customers want to upgrade, renew, or add to their existing orders.
Using Zuora, you can define the subscription models that you want to support. For example, you can charge your customers based on a price per user, or offer volume pricing based on disk space (GB) or CPU usage. In addition, Zuora allows subscriptions to have flexible subscription terms (for example, 1, 3, 6, 12, 24, or 36 months) and flexible billing periods (for example, monthly, quarterly, semi-annually, annually, or another custom period).
Here are the key concepts to understand when working with subscriptions in Zuora:
- Creating Subscriptions: Subscriptions can be created in several ways. You can:
- Use the Zuora Billing user interface.
- Issue a subscribe SOAP API call.
- Use the REST API's Create account or Create subscription calls.
- Perform a quote-to-order-to-renewal using Zuora Quotes, a native Force.com application.
- Subscription Term Setting: A subscription term setting indicates when the subscription ends. A "termed" subscription becomes out of term after a specified duration of time, e.g. 1 month or 1 year. An "evergreen" subscription does not expire, but continues to be billed until the customer cancels the subscription.
- Subscription Products and Charges: A subscription contains products and charges that comprise the customer order. As many products and charges can be added to a subscription as desired, and the information for those products and charges can be modified. For example, you can change the quantities and pricing in a subscription as needed.
- Subscription Preview: You can preview a subscription at any time, before or after a subscription is activated and billed.
Additional Resources and Activities
To learn more about subscriptions:
- See the documentation on Subscriptions.
- Access your company's test account on the Zuora API Sandbox and try to complete the following tasks:
- Create a subscription.
- Preview the subscription you created to see if the future invoiced charges come out as you expected.