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With SAP Subscription Billing, you can now take your billing cycles to the next level, literally. Rather than applying the same billing cycle to all subscription items, you can now offer subscriptions with various billing cycles for different charges and products. This way, you can optimize your revenue collection and receive payments as early as possible.
You can do this by choosing different rate plans for subitems. For recurring and usage-based charges, you can even configure specific billing cycles on charge- or credit-level in rate plan templates with pricing schemes.
We’ll now look at a short example to learn more about this feature.
Example: Yearly recurring fee with a monthly pay-per-use fee
In our example scenario, the product in SAP Subscription Billing represents a lease agreement for an X-ray machine. As a provider, you want to offer a subscription with the following conditions:
- A yearly recurring charge for the machine lease
- A monthly billed pay-per-use charge for images taken
- An additional image management program as an add-on product, which is billed quarterly
Rather than creating multiple subscriptions, for example, one for the lease of the X-ray machine, one for the monthly pay-per-use fee for images, and another one for the image management program, you now have the possibility to combine all of this in one subscription. The only prerequisite is that all billing cycles across all levels in the subscription must be either calendar- or anniversary-based.
Let’s see how you can do this.
Required Configurations
To keep this example as simple as possible, we will focus on the required settings in the following apps:
- Manage Rate Plan Templates: Define the required rate plan templates, including a charge with a specific billing cycle.
- Manage Products: Create the products required for our example scenario and create the respective rate plans.
- Manage Subscriptions: Create a subscription, including a subitem for the add-on product.
This means that you have already completed all necessary settings in Business Configuration and defined your pricing configuration, for example fields, lookup tables, and pricing scheme. Check out the Example Configuration and Additional Configuration Options, specifically the topic on Alternative Billing Cycles and Charges, in our Pricing with Pricing Schemes: Configuration Guide for more details on how you can do this.
Manage Rate Plan Templates: Configure the required rate plan templates, including a usage-based charge with a specific billing cycle
In the Manage Rate Plan Templates app, you can customize the billing frequency for each charge by configuring billing cycles for the individual charges. In our example, you create a rate plan template with your preferred billing-related settings, that is description, currency, pricing scheme and so on. You specify the overall (root) billing cycle as a parameter and enter the description Billing Cycle Recurring Charge. Then, you create the following charges:
- A recurring charge for the lease
- A usage-based charge for the images
As you want to charge the pay-per-use fee monthly, you define a specific billing cycle for the usage-based charge: For our example, you define a parameter Billing Cycle Usage Charge. You can then set the value later in the rate plan of the product.
TIP: We recommend that you define billing cycles as parameters. This way, instead of having fixed values every time you reuse your template to create a rate plan, you can customize the values per rate plan or market.
Once you’re satisfied with all your entries, save and publish the template. To be able to charge the add-on product Image Management in a later step, you create another rate plan with a recurring charge defined as Quarterly on first day of quarter.
Manage Products: Create your main and add-on products and configure the respective rate plans
In the Manage Products app, you proceed as follows:
- Create the product X-ray-as-a-Service with a rate plan based on the rate plan template you just created.
- Since you defined the billing cycles as parameters in the rate plan template, you set the value for the recurring charge in the Billing section to Yearly on January 1st.
- In the Parameters/Measurement Specifications section, set the value for the specific billing cycle of the usage-based charge to Monthly on first day of month.
As you also want to offer an image management program with the X-ray-as-a-Service subscription, you create an additional product, Image Management, to use as an add-on product later. For this product, you add a rate plan that is based on the rate plan template with a recurring charge defined as Quarterly on first day of quarter.
Manage Subscriptions: Create a subscription, including a subitem for your add-on product
In the Manage Subscriptions app, create a subscription for your product. In the item details, you can see both the recurring and the usage-based charges with different billing cycles in the Pricing section.
In our example use case, X-ray-as-a-Service represents the yearly lease and the monthly billed usage-based charges for the produced images. This is the main product of the subscription and thus the root item. In addition to this, you also want to offer the add-on product Image Management with your subscription with a quarterly billing cycle. Therefore, you create a subitem.
In the item list, you can see all recurring fees charged per cycle as well as the billing cycle lengths.
View the Billing Data
This is where you’ve made it over the finish line of our configuration journey. Now, when you search for your subscription ID in the Manage Billing Data app, you can see the resulting bills. For each billing cycle of the charges and subscription items, a separate bill has been created. The bills are sorted according to the frequency they are billed.
This concludes our example of how you can take your billing cycles to the next level by billing products within a subscription with different frequencies. To learn more and get all the details on billing cycles in SAP Subscription Billing, see Specification of Billing Cycles in our Feature Overview.
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Stay tuned!
Svenja
More Information
- What’s New in SAP Subscription Billing in SAP Subscription Billing
- SAP Help Portal Page
- Pricing with Pricing Schemes: Configuration Guide
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