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Billing Schedule overview

Zuora

Billing Schedule overview

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The Billing Schedule feature is in the Early Adopter phase. We are actively soliciting feedback from a small set of early adopters before releasing it as generally available. If you want to join this early adopter program, submit a request at Zuora Global Support.

The Billing Schedule feature provides you the capability and flexibility to generate a series of invoices for subscriptions with various terms by following customized timelines and rules. With this feature, you have the flexibility to leverage a custom invoice schedule to generate either a single invoice or multiple invoices with specified amounts on scheduled dates.

You can leverage this feature to bill subscriptions on customized schedules instead of regular schedules, and then automatically generate invoices for the subscriptions based on configured invoice schedules. 

Prerequisites

To enable the Billing Schedule feature, you must have the following features enabled:

Key concepts

To get an overall understanding of the Billing Schedule feature, keep the following key concepts in mind:

  • Invoice schedule
    An invoice schedule consists of one or more invoice schedule items that can be picked up by ad hoc bill runs, which are hourly scheduled by Zuora. Each invoice schedule item can trigger an invoice generation process. You can specify the triggering date when an invoice is generated, and specify the amount to be billed in each invoice.
  • Invoice schedule item
    An invoice schedule item contains information that is needed for triggering an invoice generation process. Each invoice schedule item is picked up and triggered by an ad hoc bill run on the scheduled date to generate an invoice with the scheduled amount.

For information on how to start using this feature, see Get started with Billing Schedule.

Invoice generation rules in Billing Schedule

You have the flexibility to create invoice schedules involving one single year or spanning multiple years. The invoice generation rules might vary for invoice schedules with different terms.

Invoice amount allocation to invoice items 

During the invoice generation process, the amount allocated to invoice items follows the following rules:

  • The invoice amount is allocated to invoice items based on the annual price.
  • For multiple charges contained in different subscriptions, charges are consumed in sequential order by charge start date. The charges with the same start date are consumed together and are billed proportionally into the scheduled invoices.
    For a specific use case, see Create single-year invoice schedules for charges with different start dates and end dates within one term.
  • The total billed amount sums to the total amount of the selling price for each individual charge.

The amount allocated to each invoice item is calculated based on the following formula:

(Billed invoice amount ÷ Total invoice amount) × Selling price

For a specific use case, see Create single-year invoice schedules on new subscriptions with the same term.

Service period determination on invoice items

During the invoice generation process, the service period of each invoice item is determined by the charge amount that is billed in the invoice, calculated in the following formula:

(Invoice item amount ÷ Selling price) × Number of months in the subscription term 

The calculation of the service period is determined by month first, and then by day. The calculated result rounds the date up because a portion of that day is consumed.

The calculation of days depends on the option selected for the When prorating a month, assume 30 days in a month or use actual days? billing rule. 

  • To use the actual number of days in the month of a proration, select Use actual number of days. 
  • To always use thirty days in a month for a proration, select Assume 30 days in a month.

Assume that the calculated service period is 6.7 months indicating 6 months plus 0.7 months, and the charge start date is 01/01/2022. 

  • If the Use actual number of days option is selected, the number of calculated days is actually 21.7 days, the calculation result of 0.7 * 31 days. A portion of 07/22/2022 is consumed, so the service period is set to be 01/01/2022 to 07/22/2022. 
  • If the Assume 30 days in a month option is selected, the number of calculated days is actually 21 days, the calculation result of 0.7 * 30 days. Then, the service period is set to be 01/01/2022 to 07/21/2022.

Credit memo generation in Billing schedule

After an invoice schedule is created for an order, if you cancel a subscription or remove a charge, credit memos are generated automatically for the change.

  • If a charge is removed or a subscription is canceled, a credit memo is generated automatically on the date when the removal or cancellation takes effect to generate credit memos. If the charge for subscription is associated with an invoice schedule that has pending schedule items, the next invoice schedule item in Pending status is automatically processed on the date when the removal or cancellation takes effect.
  • If multiple charges are removed or multiple subscriptions are canceled, a credit memo is automatically generated on the earliest date when any removal or cancellation takes effect. 
  • If a subscription contains invoice schedule charges and non-scheduled charges, the credit memo is generated along with the next invoice.

Invoice generation approaches in Billing Schedule

The following table lists the approaches to generating invoices and their compatibility with the Billing Schedule feature.

Invoice generation approach Compatibility with the Billing Schedule feature

Billing Schedule

With the Billing Schedule feature, Zuora Scheduler automatically generates invoices with specific amounts on predefined dates, and scans any related change every hour. If the dates or amounts of pending invoice schedule items are updated, Zuora Scheduler can pick up the change in the next scan.

  • If the date of an invoice schedule item is updated to the current date in the tenant timezone, the schedule item will be picked up and processed in the next scan.
  • After an invoice schedule is fully processed, if you remove charges or cancel subscriptions associated with the invoice schedule, Zuora Scheduler will automatically generate credit memos in the next scan.

Execute an invoice schedule API operation

You can use the “Execute an invoice schedule” API operation to generate an invoice for a specific invoice schedule item. 

If you do not specify any invoice schedule item in the request, the next invoice schedule item in Pending status is executed.

UI for invoice schedules

You can use the Zuora UI for invoice schedules to generate an invoice for a specific invoice schedule item. 

If an invoice schedule is fully processed, and has credit to be generated, you can trigger an ad hoc bill run from the Zuora UI. The ad hoc bill run can generate a credit memo. For more information, see Execute invoice schedules.

You can use the Zuora UI and REST API to generate invoices for subscriptions associated with invoice schedules by specifying an account or a batch of accounts. Meanwhile, regular subscriptions are also billed

Generate billing documents by account ID API operation

This API operation can work with invoice schedules.

  • If you only specify the account ID, the API operation generates invoices for all the unbilled subscriptions that belong to the account, regardless of whether the subscriptions are associated with invoice schedules. The invoice schedule items with dates earlier than the specified target date are picked up.
  • If you specify a list of subscription IDs in the request, the API operation generates invoices for all the specified subscriptions, regardless of whether the subscriptions are associated with invoice schedules. The invoice schedule items with dates earlier than the specified target date are picked up.

Invoice and collect API operation

You can use the “Invoice and collect” API operation to generate invoices for all the unbilled subscriptions that belong to the account, regardless of whether the subscriptions are associated with invoice schedules. 

The invoice schedule items with dates earlier than the target date are picked up.

Orders API operations

You can use the following API operations to generate billing documents for the charges that are associated with the corresponding invoice schedule:
Generate action (not recommended)

You can use the "Generate" action to generate invoices for all the unbilled subscriptions that belong to the account, regardless of whether the subscriptions are associated with invoice schedules.

The invoice schedule items with dates earlier than the target date are picked up.

Restrictions and limitations

When using the Billing Schedule feature, keep the following restrictions and limitations in mind:

Item Restrictions and limitations

Charge types

Only one-time or recurring charges are supported.

Zero price charges are not supported to be included in an invoice schedule.

The recurring charge that is included in an invoice schedule cannot be a prepayment charge. 
Charge settings For the charges in orders, you must set Billing Cycle Type to Charge Trigger Day, and set Billing Period Alignment to Align to Charge.

Orders

Only termed subscriptions are supported.

  • Orders with evergreen subscriptions are not supported.
  • Orders with discount charges are not supported.
  • Orders with usage charges and order line items are supported, but usage charges and order line items are automatically excluded from invoice schedules.

Subscriptions

If you use the Flexible Billing feature, subscriptions associated with an invoice schedule must have the same billing attributes including bill-to contacts, payment terms, invoice templates, and sequence sets. For more information about the Flexible Billing feature, see Flexible Billing.

You cannot configure subscriptions associated with an invoice schedule to generate a separate invoice, indicating that you cannot set Invoice the Subscription Separately to Yes.

Billing periods

The billing period of a rate plan charge must be equal to or greater than the term length of the rate plan charge. For example:

  • If the subscription term is 12 months, the billing period of the rate plan charges in the subscription must always be equal to or greater than 12 months. It is not allowed to set the billing period to four months.
  • If the subscription term is 36 months, the billing period of the rate plan charges in the subscription must be equal to or greater than 36 months.

Order actions

Some order actions are not supported in specific scenarios.

  • If the charges in subscriptions created in an order are included in an invoice schedule, the following order actions are not supported for the orders associated with the invoice schedule:
  • If an invoice schedule has been processed, the following order actions are not supported for the orders associated with the invoice schedule:

For detailed information about the order actions supported by invoice schedules in different statuses, see Supported order action types.

Data limits

The following data limits exist for the Billing Schedule feature.

  • One invoice schedule can have at most 50 invoice schedule items.
  • One invoice schedule can be associated with at most 10 orders.

Supported order action types

For orders associated with invoice schedules, which types of order actions are supported depends on the status of the associated invoice schedule.

The following table lists the mapping between the types of supported order actions and the status of invoice schedules.

Order action types Invoice schedule status
Pending Partially Processed Fully Processed

Creating a subscription

✅

✅

✅

Adding a product to a subscription

Note that new products will not be included in the existing invoice schedule.

✅

✅

✅

Removing a product from a subscription

✅

✅

✅

Updating a product from the beginning of a rate plan charge

✅

🚫

🚫

Updating the price, including the unit price and quantity, from the middle of a rate plan charge

🚫

🚫

🚫

Updating custom fields from the middle of a rate plan charge

Note that the contract effective date must fall into the unbilled service period.

✅

✅

🚫

Canceling a subscription

✅

✅

✅

Changing the owner of a subscription

Note that all the subscriptions in an invoice schedule must be transferred together.

✅

✅

✅

Renewing a subscription

Note that you must enable the Splitting Segments setting.

✅

✅

✅

Early renewals, covering the Remove Product, Add Product, and Update Terms and Conditions order actions

✅

✅

✅

Updating the terms and conditions but not extending recurring charges

✅

✅

✅

Extending recurring charges through the Update Terms and Conditions order action

🚫

🚫

🚫

Removing a product before a future-dated removal

✅

🚫

🚫

Cancelling a subscription before a future-dated removal

✅

🚫

🚫

Updating a product before a future-dated removal

Note that you can update a rate plan charge from the beginning.

✅

🚫

🚫

Suspending or resuming a subscription

🚫

🚫

🚫

Additional resources on Billing Schedule

The following resources can also help you better understand and use the Billing Schedule feature: