Skip to main content

Recurring charge for different initial and renewal terms

Zuora

Recurring charge for different initial and renewal terms

  1. Last updated
  2. Save as PDF

This article explains how to set up a recurring charge using the subscription term as the billing period and a list price based on a month. This recurring charge setup allows you to create subscriptions with different initial and renewal terms.

This scenario explains how to set up a recurring charge to handle subscriptions with a different initial term and renewal term, and a list price based on a month. Suppose you have the following scenario:

  • Your customer subscribes to the service with an initial term of 6 months and a renewal term of 12 months.
  • You want to bill and collect payment for the entire initial term at the start of the term. For example, if the initial term is May 1 through October 31 (6 months), the customer receives an invoice that includes a charge of $600  upon the term start date of May 1.
  • You want to bill and collect payment for the renewal term at the start of the term. For example, if the renewal term is November 1 through October 31 (12 months), the customer receives an invoice that includes a charge of $1200 upon the term start date of November 1.

With full-term pricing options, you can create a recurring charge on your product rate plan with the following settings:

  • A billing period based on the subscription term
  • A list price based on a month

Enable Zuora Billing settings for the billing period and list price base

You must enable full-term pricing by defining your invoice period settings. The following steps show the required settings for full-term pricing. You can specify other invoice period settings as required for your business needs.

  1. Log in to the Zuora application with administrative privileges.
  2. Click your username at the top right corner, click Billing, then Define Billing Periods.
  3. In the Customize Billing Periods section, select Subscription Term. This option allows you to define a billing period as a subscription term.
  4. Select Month from the Customize List Price Base section. This option allows you to set your list price based on a month. 

For more information on all billing period settings, see Define Billing Periods.

Create a product using full-term pricing options

The following steps explain how to set up a product rate plan charge for recurring charges with subscription term as the billing period and a list price based on a month:

  1. Navigate to Products > Product Catalog from the left-hand navigation.
  2. Create a new product in your catalog, then create a new rate plan.
  3. Add a new recurring charge to the rate plan that you created.
  4. Define the charge amount as follows:

    charge-amount-recurring.png

    • Charge Model: Flat Fee Pricing
    • List Price: $100 with the list price base option of Month. For example, if your subscription term is six months, the charge for the full term is $600. If your subscription term is 12 months, the charge for the full term is $1200. 
  5. Specify the charge timing and frequency with the following key settings:
    • Billing Period: Subscription Term
    • Billing Period Alignment: Align to Charge

    timing-frequency-recurring.png

  6. Save the charge.

Create a subscription

Navigate to Customers > Subscription from the left-hand navigation to create a subscription. The following example shows the term settings of the subscription with an initial term set to 6 months and a renewal term set to 12 months. For detailed instructions about how to create a subscription, see Create subscriptions.

sub-term-settings.png

Do the following to see the impact on the invoicing:

  1. Activate and save the subscription. 
  2. Renew the subscription term.
  3. Preview the subscription with a preview date set after the start of the renewal term.