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Create orders containing multiple charges with terms aligned with Specific Months List Price Base

Zuora

Create orders containing multiple charges with terms aligned with Specific Months List Price Base

The Annual List Price 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.

With Annual List Price, you can now sell your products and services based on a term price by using the Specific Months list price base, and bill your customers with a variety of billing periods, such as monthly, quarterly, every four months, semi-annually, or annually. 

For example, if a subscription term is seven months, you can configure the charge with the price as $5,500 per seven months, and the billing period as every four months. You can configure the billing period as every four months to bill the subscription charge to generate two invoices, and the total billed amount of the charge across the two invoices sums to the price of $5,500.

The charges have aligned full billing periods, and the following requirements are met:

  • All rate plan charges have special months price.
  • All rate plan charges have full billing periods.
  • The last billing period is prorated.

In this use case, two subscriptions are created with the same term of seven months, and two invoices are generated based on the billed charges. 

As shown in the following table, two subscriptions are created by creating an order, with a total amount of $11,000.00, the same term of seven months, and the same billing period of four months. You expect to have two invoices generated, and the last invoice is prorated for three months.

Subscription number Term start date Term (Month) Charge number Charge start date Charge end date Selling price Billing period (Month) Billing cycle day Total Invoice amount
S1 01/01/2022 7 C1 01/01/2022 07/31/2022 $5500.00 4 1st $11,000.00
S2 01/01/2022 7 C2 01/01/2022 07/31/2022 $5500.00 4 1st

Each individual charge is prorated based on the special months price and the term. Because you have multiple charges billed, the total price amounts for all charges are evenly or almost evenly distributed across invoices. The rounding difference between invoices with full billing period is less than $0.02 (<= $0.01).

To create such orders, perform the following steps:

  1. Enable the Specific Months List Price settings.
  2. Create two recurring product rate plan charges with the Flat Fee Pricing charge model.
  3. Create and activate an order with two subscriptions to the two charges, with the total amount of $11,000.00 and the same term of seven months.

After the order is activated, you can get two invoices.

The following table lists the allocated amount and service period of each invoice item in the first invoice with invoice number INV001.

Invoice item Service start date Service end date Amount Total amount
Invoice Item 1 01/01/2022 04/30/2022 $3,142.86 $6285.71
Invoice Item 2 01/01/2022 04/30/2022 $3,142.85

The following table lists the allocated amount and service period of each invoice item in the second invoice with invoice number INV002.

Invoice item Service start date Service end date Amount Total amount
Invoice Item 1 05/01/2022 07/31/2022 $2,357.14 $4,714.29
Invoice Item 2 05/01/2022 07/31/2022 $2,357.15

The total billed amount of each individual charge across multiple invoices sums to the total of the selling price, and the rounding difference between invoice items with full billing period is less than $0.02 (<= $0.01).

The amount displayed in the Amount column for each invoice item is calculated based on the following formula:

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

For example, the amount of the first charge line item in the first generated invoice is $3142.86, which is calculated based on the formula 6285.71×(5000÷11000) and rounded based on the default rounding rule specified for the corresponding account.

Because the billing period is four months for the two subscriptions, the second invoice with invoice number INV002 is generated with the service start date of 1 May 2022.