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Author's profile photo Svenja Schnabel

End-of-Month Rule: Charging Subscriptions Starting on the 29th, 30th, or 31st of a Month

In an ideal world, everything would be plannable to a T: Your train would always arrive in the station dead on time, weather forecasts would predict torrential downpours to the minute, and your customers’ subscriptions would never start late in the month. But we don’t live in an ideal world. Real life is unpredictable, but although I can’t prevent you from arriving late or getting soaked in the rain because you’ve been trusting enough to leave your umbrella at home, I can provide you with a solution for subscriptions that start at the end of the month.

With SAP Subscription Billing, you can now define from which period onwards subscriptions are charged if they start at the 29th, 30th, or 31st of a month.

About this Feature

As you probably already know, you can define different billing-related settings like the billing cycle, the billing profile and the currency in rate plan templates. Now, when creating a rate plan template with pricing schemes, you can also use an end-of-month rule to specify from which period onwards anniversary-billed subscriptions starting on the 29th, 30th, or 31st of a month are charged. You can choose between the following options:

  • Bill from next month: Charges only apply from the month following the subscription start. The remaining days of the current cycle are free of charge.
  • Bill from current cycle: Charges apply from the current cycle onwards.

The default setting of the end-of-month rule is Bill from next month. If a subscription starts on the 29th, 30th, or 31st of a month, the start of the first billing cycle is shifted to the first of the following month. Up to now, this was the standard behavior.
If you want to charge for these “remaining” days, set the end-of-month rule to Bill from current cycle. This way, the first billing cycle starts within the current cycle of the subscription start date (either the current month, quarter, half-year, or year, depending on the frequency of billing defined for the subscription). Whether charges are then prorated for the first cycle depends on the Prorate First Cycle option. The first cycle will only be prorated if Prorate First Cycle is selected in the rate plan template of the subscription. If not, the full first cycle will be charged.

But let’s have a look at a few examples to illustrate how this works.

Examples

Bill from Next Month

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End-of-month rule: Bill from next month

In this example, the subscription starts on March 29 and has the end-of-month rule specified as Bill from next month. The first billing cycle is shifted to April 1 and the remaining days of March are then free of charge.

Bill from Current Cycle with Prorate First Cycle

End-of-month%20rule%3A%20Bill%20from%20current%20cycle%20with%20proration

End-of-month rule: Bill from current cycle with proration

Here, the subscription also starts on March 29, but the end-of-month rule is specified as Bill from current cycle and Prorate First Cycle is selected. Thus, the first billing cycle is shifted to March 1 and the charge for the first cycle (March 1 to April 1) is prorated.

Bill from Current Cycle without Prorate First Cycle

End-of-month%20rule%3A%20Bill%20from%20current%20cycle%20without%20proration

End-of-month rule: Bill from current cycle without proration

Again, the subscription starts on March 29 and the end-of-month rule is specified as Bill from current cycle. This time, however, Prorate First Cycle isn’t selected and therefore, the first cycle (March 1 to April 1) is fully charged.

So, with the new setting you have full flexibility to decide how you want those late-in-the-month subscriptions to be charged.

To learn more, see the section End-of-Month Rule in Billing Cycle

That’s it, thanks for your interest!

If you find this post interesting and useful, please like it.

 

Stay tuned for more updates and follow the tag SAP Subscription Billing.

Svenja

 


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