Component Allocations Overview

In order for Advanced Billing to add charges for a subscriber’s components, you must report to Advanced Billing the component’s status/amount. When we refer to the status we mean one of the following for each subscription.

Quantity used for quantity-based components
Amount allocated or recorded for metered-based and prepaid components
Or whether the feature was enabled or not - on/off components.

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

View History: View the amount and dates when a component has been used.
Update Price Point: Update the price point being used for the component.
Change Global Component Pricing/Details: Change the name, description, unit price, etc. of a component.

The following options are unique to specific component types:

Update Quantity: Change the quantity allocated to a component. This option only appears on quantity-based components, recurring or one-time.
Toggle On/Off: Set a component to “on” or “off”. This option only appears in on/off components.
Purchase Prepaid Units: Purchase an allocation of a set number of units, with a proration strategy of your choosing. This option only appears on prepaid components.
Record Usage: Make note of recent usage for the billing period. This option only appears on metered and prepaid components and will not be immediately charged for once recorded.

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

Component Billing Examples

The following examples illustrate the usage of components and when they will be billed to the subscriber.

Quantity-based Example

Quantity-based components renew and apply charges at the beginning of each recurring period. Also, you may elect to apply charges/proration when allocating a quantity-based component during the middle of a billing cycle, (aka: mid-recurring-period).

For example:

A subscriber has purchased a product on the 23rd of the month, and they’ll be billed for any quantity-based components on the 23rd of each month
This assumes the product is on a monthly billing cycle.
Advanced Billing looks at the quantity of components allocated on the renewal billing date and then bills accordingly for the allocated components.
The amount recorded will not reset to zero at the end of the billing period.

Metered-based Example

Metered-based components are recorded against a subscription throughout the recurring billing period. We refer to this as recording usage. Advanced Billing calculates the total usage at the end of the recurring period and applies the appropriate charges. At the beginning of the next billing period, the metered-based usage resets to zero.

For example:

Let’s say your subscriber signs up on the 1st of January
On January 10th, you record 10 metered components worth of usage
On January 20th, you record another 10 metered components worth of usage
When the monthly product renews on February 1st, the subscriber will be charged for the product renewal plus 20 metered components.
The recorded metered components will also reset to zero at this time.

Prepaid Examples

Prepaid components involve two steps. First, a variable number of units are purchased through an allocation. Then, usage is recorded on the subscription as those units are depleted. Overage pricing comes into effect if the usage recorded exceeds the units allocated.

To understand how units are marked as overage, it’s helpful to think of a subscriber as having an allocation balance and an overage balance at any given time. For example, if a prepaid component is configured with recurring allocations:

A new subscriber joins on March 15th on a monthly product.
On March 16th, they purchase 100 allocations. Then they use 101 units. At this point, they have 0 allocations remaining, and 1 unit in overage.
A week later, they purchase 200 allocations. At this point, they have 200 allocations and 1 unit still in overage.
Soon after, they record 199 usages. Now, there is 1 allocation remaining, with 1 still in overage.
Finally, the day before renewal, they record 50 usages. The result is 0 left in the allocation block, and 49 added to overage, for a total of 50.
On April 15th, the subscription renews. Their renewal charges consist of:
- The product charge for the following billing period, April 15th - May 15th
- 50 units in overage
- 300 allocations that are purchased again due to the recurring setting on the component

For another prepaid example, let’s assume the component has an expiration interval of 10 days and is configured to roll over leftover units:

On November 8th, a new subscription is created with an allocation of 500 units.
On November 11th, usage is reported for 200 units. 300 allocations remain, with none in overage.
On November 18th, the allocation officially expires.
On December 1st, another 200 units are reported in usage. Because the original allocation has expired, these 200 units are considered overage.
On the renewal date, December 8th, the following charges will be included on the invoice:
- The product charge for the following period, December 8th - January 8th
- 200 units as overage
- The original allocation of 500 units will not be applied again, since the component is not recurring
- While only 400/500 units of usage had been recorded, the remaining 100 will not roll over to the next period because the original allocation has expired.