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How do I set up a subscription with charges whose billing period is based on the Subscription Term?

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Community Manager

How do I set up a subscription with charges whose billing period is based on the Subscription Term?

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Community Manager

Re: How do I set up a subscription with charges whose billing period is based on the Subscription Term?

Problem

Customer would like to set up a subscription in a way so its charges are invoiced for the whole subscription term.  For example, a subscription has Initial Term = 6 months and Renewal Term = 12 months and customer would like to invoice it for the full term each time (ie., first invoice is for 6 months and second one is for 12 months).  Some options to do so are

  • To use annual charges.  This first term can be prorated and the renewal term can be billed in full.
  • To use semi-annual charges.  This first term can be billed in full and the renewal term can be billed in two different invoices of 6 months each.  Or user can manually adjust the invoice's Target Date so Zuora will bill for two billing periods in one invoice for the renewal term.

These options work but it requires user to plan in advance how the rate plan charges should be set up or manually manipulate the invoice's target date to generate the desired invoice.  In addition, it does not provide the flexibility if more changes are made to the subscription later.  For example, at the end of the Renewal Term end-customer would like to renew their subscription for another 3 months only instead of 12 months.  More amendments will be needed in order to accommodate this change.

 

Solution

In May 2015 R188 Release, we introduce Subscription Term billing period and List Price Base option to make it easier for customers to set up subscriptions that have charges invoiced based on the subscription terms.  Customers just need to set the charges' billing period as Subscription Term and provide their price per month and Zuora will do the rest.

Here are the steps to set this up.

 

1.  Enable the features for your tenant

  • Reach out to Zuora Support and ask to enable Subscription Term Billing Period and List Price Base features on your tenant
  • Once these features have been enabled, in your tenant go to Settings > Z-Billing Settings > Define Invoice Periods
  • Under Customize Billing Period section, enable Subscription Term
  • Under Customize List Price Base section, enable Per Month

2.  Set up your Product Catalog

  • Create a new Product Rate Plan for your product
  • Create a new Product Rate Plan Charge for your rate plan with the following properties
    • List Price Base Per Month
    • List Price = <the amount per month> (e.g., if your product worths $12,000 / year, enter $1,000 which is the equivalent amount for one month)
    • Billing Period Subscription Term

Once the new product rate plan has been set up in your Product Catalog, you can start using it for new and existing subscriptions (e.g., add it via amendment).

Please note that this feature is Salesforce ready which means that you can use it in Salesforce as well without upgrading your Zuora Quotes package. 



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Honor Student

Re: How do I set up a subscription with charges whose billing period is based on the Subscription Te

Subscription Term billing period and List Price Base options have made it easier for customers to set up subscriptions that have charges invoiced based on the subscription terms. Customers just need to set the charges' billing period as Subscription Term and provide their price per month and Zuora will do the rest.