Billing Cycle for Addons

Overview

A recurring addon, when applied to a subscription, stays attached for as many billing cycles the subscription runs. Of course, it can be removed at any time. However, if you only want the addon to stay attached to the subscription for a fixed number of billing cycles, you can set the addon billing cycle parameter for the addon while creating or updating a subscription.

This feature also comes in handy when you want to break down a one-time charge so the customer can pay in parts.

Set up addons with billing cycle

The first step is to set up an add-on.

After navigating to Product Catalog > Add-ons, you can either create a new recurring add-on with the charge or modify an existing add-on for that purpose. Once the add-on is set up, you need to link it to a new subscription or an existing subscription.

To add the add-on to a new subscription, navigate to Subscriptions and click Create New Subscription. Click Add Recurring Add-on. Here you choose the add-on and mention the billing cycle as well.

The add-on will be added to the invoice of the new subscription. As the term progresses and more invoices are generated for each billing cycle, the billing cycle will decrement to become zero and the add-on will be removed.

To add the add-on to an existing subscription, locate the subscription and click Edit Subscription.

Then click the edit icon for an addon to change the number of billing cycles.

For the existing subscriptions, when an addon is added, a prorated invoice is generated based on the subscription term. The prorated period will be considered as one billing cycle as far as the add-on is concerned. If you add a billing cycle to an existing addon linked to a subscription, no charge will be raised. However, the billing cycles for the addon against the subscription will be increased by 1.

Subscription Cancellation

When a subscription is canceled, the addon linked to the subscription will be disabled till reactivation. There are two scenarios to be taken into account as far as the reactivation of the subscription is considered:

1. In-term Reactivation: If the subscription is reactivated before the end of the subscription term, the billing cycles of the addons will be maintained.

2. Out-of-term Reactivation: If the subscription is reactivated after the end of the subscription term, the billing cycle of the addon will be reset to ‘forever', i.e., the customer will be charged for the addon indefinitely. Using Change Subscription option, you can update the billing cycle of the addon after reactivation.

FAQ

1. How do I collect one-time charges/setup fees in parts? You can use billing cycle for addons to collect the setup fee in parts. Say you're charging your customers a setup fee of $1,000, and you want to let them pay in 10 installments, then the billing cycle should be set as 10. You can configure an addon with "Unit Price" set as $100 and "Billing Cycles" as 10. However, the setup fee modeled as an addon will be considered in the MRR calculation (setup fees defined in the plan are not considered for the MRR).

2. Can I raise an advance invoice for addons that have a billing cycle? Yes, you can raise an advance invoice to collect payments for addons with billing cycles.