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Ramp deal processing examples

Zuora

Ramp deal processing examples

Two examples are provided to help you understand how to calculate the ramp allocation amount and validations that are performed during the ramp allocation process. All the data and the involved calculations in the following examples can be downloaded from this spreadsheet.

Example 1

In this example, there is one ramp deal group within the revenue contract, which is indicated by the Ramp Identifier. Three lines are included in this ramp deal group. Both quantity and price are ramping in the three-year period. All the lines are eligible for allocation (CV_ELIGIBLE_FLAG=Y). The AVG_PRICING_MTHD filed for them is set to Volume.

To calculate the relative allocation percentage for these lines, the Ext SSP Price is column is used to calculate the relative allocation percentage. Then, the net revenue from the relative allocation can be derived as follows.

Charge #

Charge Version

Charge Segment

Ext Sell Price

Ext SSP Price

Relative Allocation Percentage

Net Revenue (Relative Allocation)

C-00001

1

1

8,000

8,000

13.20%

8,712.87

C-00001

2

2

18,000

12,600

20.79%

13,722.77

C-00001

3

3

40,000

40,000

66.01%

43,564.36
     

66,000

60,600

100.00%

66,000

The AVG_PRICING_MTHD is volume-based. So the ramp allocation percentage for each ramp deal line is calculated based on the total term in days.

Charge #

Charge Version

Charge Segment

Qty

Term (days)

Total Term Days

Ramp Allocation Percentage

Ext Sell Price

Net Revenue (Ramp Allocation)

C-00001

1

1

10

365

3,650

14.27%

8,000

9,421.20

C-00001

2

2

20

366

7,320

28.63%

18,000

18,894.02

C-00001

3

3

40

365

14,600

57.10%

40,000

37,684.79
     

70

1,096

25,570

100.00%

66,000

66,000

To validate the per unit per day rate, the per day rate is calculated for each line as follows. The per unit per day rate is the same for all the lines. This validation passes.

Charge #

Charge Version

Charge Segment

Term (days)

Net Revenue (Ramp Allocation)

Per Day Rate

Per Unit Per Day Rate

C-00001

1

1

365

9,421.20

25.81149785

2.581149785

C-00001

2

2

366

18,894.02

51.6229957

2.581149785

C-00001

3

3

365

37,684.79

103.2459914

2.581149785

     

1,096

66,000

   

Example 2

In this example, only two ramp deal groups exist within the revenue contract. Each ramp deal group has three lines. Only the quantity is ramping in the three-year period. All the lines are eligible for allocation (CV_ELIGIBLE_FLAG=Y). The AVG_PRICING_MTHD filed for them is set to Term.

To calculate the relative allocation percentage for these lines, the Ext SSP Price is column is used to calculate the relative allocation percentage. Then, the net revenue from the relative allocation can be derived as follows.

Charge #

Charge Version

Charge Segment

Ext Sell Price

Ext SSP Price

Relative Allocation Percentage

Net Revenue (Relative Allocation)

C-00001

1

1

10,000

8,000

5.67%

9,078.01

C-00001

2

2

20,000

14,000

9.93%

15,886.52

C-00001

3

3

40,000

40,000

28.37%

45,390.07

C-00002

1

1

10,000

8,000

5.67%

9,078.01

C-00002

2

2

30,000

21,000

14.89%

23,829.79

C-00002

3

3

50,000

50,000

35.46%

56,737.59

     

160,000

141,000

100.00%

160,000.00

The AVG_PRICING_MTHD is term based. So the ramp allocation percentage for each ramp deal line within the same ramp deal group is calculated based on the total term in days. The ramp allocation percentage for the first group is calculated as follows:

Charge #

Charge Version

Charge Segment

Term (days)

Ramp Allocation Percentage

C-00001

1

1

365

33.30%

C-00001

2

2

366

33.39%

C-00001

3

3

365

33.30%

     

1,096

100.00%

The ramp allocation percentage for the other group is calculated as follows:

Charge #

Charge Version

Charge Segment

Term (days)

Ramp Allocation Percentage

C-00002

1

1

365

33.30%

C-00002

2

2

366

33.39%

C-00002

3

3

365

33.30%

     

1,096

100.00%

The total amount for ramp allocation is based on the total amount of relative allocation within each ramp deal group. Then, the total amount to be allocated for the first group is 70354.61 and the net revenue for ramp allocation can be derived based on the ramp allocation percentage is calculated as follows:

Charge #

Charge Version

Charge Segment

Term (days)

Ramp Allocation Percentage

Net Revenue (Relative Allocation)

Net Revenue (Ramp Allocation)

C-00001

1

1

365

33.30%

9,078.01

23,430.14

C-00001

2

2

366

33.39%

15,886.52

23,494.33

C-00001

3

3

365

33.30%

45,390.07

23,430.14

     

1,096

100.00%

70354.61

70354.61

The total amount to be allocated for the second group is 89,645.39 and the net revenue for ramp allocation can be calculated as follows:

Charge #

Charge Version

Charge Segment

Term (days)

Ramp Allocation Percentage

Net Revenue (Relative Allocation)

Net Revenue (Ramp Allocation)

C-00002

1

1

365

33.30%

9,078.01

29,854.53

C-00002

2

2

366

33.39%

23,829.79

29,936.33

C-00002

3

3

365

33.30%

56,737.59

29,854.53

     

1,096

100.00%

89,645.39

89,645.39

To validate the per unit per day rate, the per day rate is calculated for each line as follows. The per unit per day rate for each line is different within either of the two groups. This validation fails. Hold will be applied to this revenue contract.

Charge #

Charge Version

Charge Segment

Term (days)

Net Revenue (Ramp Allocation)

Per Day Rate

Per Unit Per Day Rate

C-00001

1

1

365

23,430.14

63.86861314

6.386861314

C-00001

2

2

366

23,494.33

63.86861314

3.193430657

C-00001

3

3

365

23,430.14

63.86861314

1.596715328

C-00002

1

1

365

29,854.53

81.79323912

16.35864782

C-00002

2

2

366

29,936.33

81.79323912

8.179323912

C-00002

3

3

365

29,854.53

81.79323912

5.452882608