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How to create a Catchup Bill in SAP Subscription Billing

amer_bukhari
Advisor
Advisor
0 Kudos
124

Hi

Im working with prospect usecase where I need to show how SB will be able to process a 'catchup bill'

SCENARIO Explained

  • Consider a sample customer with a monthly music subscription charge of £30, to be billed monthly in advance.
  • For customers that go live before the 15th of a month, prospect charges for the full month in which they go live. For customers that go live after the 15th, charges are not incurred until the 1st of the following month.
    • In this case, assume the customer's installation went live on 12th September, therefore they should be charged £30 for the month of September.
  • Prospect currently generates its recurring invoices 1 month and 1 day in advance of the billing period. For this customer, the first recurring invoice run would therefore be triggered on 30th September covering the period from 1st to 30th November. This means that:
    • a "catch-up" invoice for £60 is required at the end of September to bill for the two months from 1st September to 31st October, in addition to the recurring invoice amount of £30 for the month of November;
    • the £30 in recurring revenue for November needs to be deferred, and recognised in November.
  • Currently, prospect produces two separate invoice documents (one for the catch-up period and one for November, in this example). In future, a single invoice could cover the whole period, provided the ERP system can recognise the revenue in the right periods (i.e. catch-up amount recognised in the current month and advance payments recognised in the relevant time period). SAP Subscription Billing 
annette_klute
Product and Topic Expert
Product and Topic Expert
0 Kudos

Hi,

Subscription Billing splits bills by billing period. So, in your example you would get separate bills for the months September, October and November. You can configure subscriptions to be billed early so that they are billed 1 month plus 1 day before the start of a billing cycle. With such a setting, the month of November would be billed on September 30 as you described in your use case.

You can configure charges in the rate plan template such that no proration takes place in the first billing cycle. In your example, a subscription starting on Sept 12 would be billed for the entire month. A subscription starting after the 15th of a month would also be charged for the entire month. To prevent this, you can either work with waiver periods in the subscription item, or you let the subscription start on the 1st of the next month.

Kind regards,

Annette

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