Addons can have a billing cycle that is lesser or equal to plan's billing cycle.
This means that a plan with a billing cycle of 6 months can have an addon with a billing cycle of 3 months linked to it. This will help you provide an addon for a billing period different from that of the plan, in this case, for a shorter span of time.
This feature also comes in handy when you want to break down a one-time charge so the customer can pay in parts.
First step is to set up an addon.
After navigating to Product Catalog > Addons, you can either create a new recurring addon with the charge or modify an existing addon for that purpose.
Once the addon is set up, you need to link it to a new subscription or an existing subscription.
To add the addon to a new subscription, navigate to Subscriptions and click on Create New Subscription. You will find the option to fill in the details of an addon to the subscription. Here you choose the addon and mention the billing cycle as well.
The addon will be added to the invoice of the new subscription. As the term progresses and more invoices are generated, the billing cycle will decrement to become zero and the addon will be removed after.
Now, to add the charge to an existing subscription, locate the subscription and click Change Subscription.
Then click on the edit icon for an addon to change the number of billing cycles for.
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 period will decrement and the addon will be removed when the billing cycle becomes zero.
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.
1. How do I collect one-time charges/setup fee 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 $1000 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 fee defined in the plan is 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 the collect payments for addons with billing cycles.