Recurring addons are not included in MRR calculations. Why?
Scope
The issue with the recurring predefined billing cycle addon not being included in the subscriptions MRR.
Summary
There might be scenarios where your subscription might have recurring addons with billing cycles given pre-defined while creating the sub. In this case, the MRR of the sub will not include this recurring addon amount ( with billing cycles given) in its calculations.
This happens when flexible MRR is not enabled.
Solution
As per the current system design, if flexible MRR is not enabled if a recurring addon is added to a subscription and while adding if the number of billing cycles is given, the system will consider it as a non-recurring addon. Therefore, this addon amount will not be included in MRR.
In case, flexible MRR is NOT enabled, and even for a recurring addon if the billing cycle is mentioned, it will be considered as Non-recurring and this will not be included in the MRR Calculations.
Steps to replicate and check: Step 1: Create a yearly plan and a yearly addon. Step 2: Create a sub by associating the above yearly plan and the yearly addon. Give 1 as the billing cycle for the yearly addon. Step 3: Advance Time Machine by one day so Chargebee recalculates MRR. Step 4: Now, the MRR seems to be including the plan amount alone because, flexible MRR is NOT enabled and even though the addon is recurring, as the billing cycle is mentioned, this is considered a non-recurring addon by the system and hence this will not be included in the MRR Calculation.
- Plan amount = 13,899
- Addon amount = 2,100
- Total subscription amount = 15,999
- MRR = 13,899 / 12 = 1,158.25
Related scenario: Addon billing cycles set to 0
A recurring Addon can also be excluded from MRR calculations when Billing cycles on the subscription Addon item is set to 0. This is distinct from the scenario above, where Flexible MRR is disabled.
When Billing cycles is set to 0, Chargebee treats the Addon as having no remaining recurring cycles. The Addon is excluded from the next MRR recalculation even if it was invoiced in the current billing term. This does not change an invoice that was already generated for the current term.
The MRR value can remain unchanged until a subscription modification triggers the next MRR recalculation.
Resolution
Update the Addon item on the subscription. Set the correct Billing cycles value, or clear the field to let the Addon recur indefinitely. After the next MRR recalculation, verify that the Addon amount is included in MRR.