One-Time Charges Based on Quantities
With SAP Subscription Billing, you can now define quantities for one-time charges using subscription parameters. This means that not only can you create subscriptions with recurring charges based on the number of licenses, for example, but you can also configure quantity-based initial fees that apply for setting up the required hardware per license.
In this blog post, I’m going to take you through the process of setting up a subscription model with this new feature using an example use case.
Example Use Case: Renting a Printer
For our example use case, imagine you’re a hardware provider who offers printing machines for rent. You want to set up a subscription model with a recurring charge for the license to use a printer, as well as a one-time charge for the initial hardware setup.
In the Rate Elements settings of the Manage Business Configuration app, you create the following two rate elements:
|Rate Element Type||ID||Data Source|
In a rate element, the Data Source field specifies the source of the quantity that is later used in the rate plan to calculate the charges for the bill. You choose the data source Subscription to ensure that the quantity can be provided by a subscription parameter.
Rate Plan Template
Once you’ve saved the two rate elements, you continue in the Manage Rate Plan Templates app. You create a rate plan template with a pricing scheme with two charges:
- A one-time charge for the initial setup fee using the rate element INITIAL.
- A recurring charge to cover the rental fees (licenses) using the rate element LICENSE.
You then move on to the Manage Products app to create the product for which you want to sell licenses. You create a product with the following details:
- Product Name: Rent a Printer
- ID: RENTAL
- Description: The product used in a subscription for rental printer example.
Then you configure a rate plan based on the rate plan template created before and add the two subscription parameters INITIAL and LICENSE (the rate element ID is displayed later in the subscription as the subscription parameter name).
Lookup Table Data
For this use case, you decide to use a single, linear price, although you could also use other quantity-based pricing models.
Therefore, in the Manage Lookup Table Data app, you maintain the lookup table data for the one-time charge and the recurring charge specifying the price condition as single with a linear price type.
Changing Subscription Parameters:
One-time charges are always generated once at the start of the subscription. Afterwards, changes to subscription parameters for one-time charges have no effect on the billed one-time charge, even though the calculation is visible in the snapshot. Only the quantity for the one-time charge defined in the initial subscription snapshot determines the billed amount.
For the recurring charges on the other hand, you can edit the number of licenses at any time. This change creates a snapshot with a new effective period and triggers a rerating process.
You then open the bill for the subscription in the Manage Billing Data app. In the bill item, you can see that two charges have been created, a one-time and a recurring charge. The Charged Quantity is based on the quantity configured in the subscription item earlier on.
So, with this new setting, you can now define one-time charges based on the quantity of a product purchased.
To learn more, see License-Based Subscriptions.
That’s it, thanks for your interest!
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