Understand How Components Are Billed

Advanced Billing requires you to report a component’s status or amount in order to apply charges to a Subscription. A component’s status represents how usage or allocation is tracked for that Subscription, depending on the component type.

The component status may refer to one of the following:

• Quantity used for quantity-based components
• Amount allocated or recorded for metered and prepaid components
• Enabled or disabled for on/off components

In the application, you can perform the following actions for a component:

• View History: View the amounts and dates when a component was used.
• Update Price Point: Update the price point currently applied to the component.
• Change Global Component Pricing/Details: Update the component’s name, description, unit price, or other configuration details.

The following options are available only for specific component types:

• Update Quantity: Change the quantity allocated to a component. This option appears only for recurring or one-time quantity-based components.
• Toggle On/Off: Set a component to “on” or “off.” This option appears only for on/off components.
• Purchase Prepaid Units: Purchase a set number of prepaid units and choose a proration strategy. This option appears only for prepaid components.
• Record Usage: Record usage for the current billing period. This option appears only for metered and prepaid components. Recorded usage is not charged immediately.

Components are generally billed in advance on the same billing cycle as the associated product. The exception is metered components, which are billed in arrears.

See Also: Custom Pricing and Component Allocations

Component Billing Examples

The following examples illustrate how components are used and when charges are applied to a Subscription Invoice.

Quantity-Based Example

Quantity-based components renew and apply charges at the beginning of each billing period. You may also apply prorated charges when allocating a quantity-based component mid-period.

For example:

• A subscriber purchases a product on the 23rd of the month.
• The product is on a monthly billing cycle.
• The Subscription renews on the 23rd of each month.
• Advanced Billing evaluates the allocated quantity on the renewal date and bills accordingly.
• The allocated quantity does not reset to zero at the end of the billing period.

Metered Example

Metered components track usage throughout the billing period. Advanced Billing calculates total usage at the end of the period and applies charges at renewal. Usage then resets to zero at the start of the next billing period.

For example:

• A subscriber signs up on January 1.
• On January 10, you record 10 units of usage.
• On January 20, you record another 10 units of usage.
• On February 1, the Subscription renews.
• The renewal Invoice includes the product charge plus 20 units of metered usage.
• Metered usage resets to zero for the new billing period.

Prepaid Examples

Prepaid components involve two steps:

1. Purchase an allocation of units.
2. Record usage as units are consumed.

If recorded usage exceeds the allocated units, overage pricing applies.

For recurring prepaid allocations:

• A subscriber joins on March 15 with a monthly product.
• On March 16, they purchase 100 units and use 101 units. They have zero allocations remaining and one unit in overage.
• They later purchase 200 additional units. They now have 200 allocations and one unit in overage.
• They record 199 additional units of usage. One allocated unit remains, and one unit remains in overage.
• The day before renewal, they record 50 more units. Allocations are reduced to zero, and overage increases to 50 units total.
• On April 15, the Subscription renews. The renewal Invoice includes:
  • The product charge for April 15 through May 15
  • 50 units billed as overage
  • 300 recurring allocation units for the new billing period

For a prepaid component with a 10-day expiration interval and rollover enabled:

• On November 8, a Subscription is created with an allocation of 500 units.
• On November 11, 200 units are used. 300 allocated units remain.
• On November 18, the allocation expires.
• On December 1, 200 units are recorded. Because the allocation expired, these units are treated as overage.
• On December 8, the Subscription renews. The renewal Invoice includes:
  • The product charge for December 8 through January 8
  • 200 units billed as overage
  • No recurring allocation, because the component is not recurring
  • No rollover of the remaining 100 unused units, because the allocation expired