Complete guide to charge types

Introduction

The Platform uses a streamlined set of charge types to represent various billing events across different vendors. This article provides a comprehensive reference for understanding all charge types used on the platform, how vendor-specific charge types are mapped to platform charge types, and when each charge type appears on invoices. Whether you're reviewing invoices, reconciling billing data, or managing subscriptions, understanding charge types is essential for accurate financial tracking and reporting.

In this article:

• Overview
• Primary Charge Types
• Charge Type Mapping
• Charge Aggregation Process

Overview

The Platform uses a streamlined set of charge types to represent various billing events. This article explains:

• The primary charge types used in the platform
• How vendor-specific charge types map to platform charge types
• When and how each charge type appears on invoices

Primary Charge Types

The Platform supports six main charge types:

1. Purchase Fee - Initial cycle fee after subscription purchase
2. Cycle Fee - Recurring fee during each new billing cycle
3. Correction - Adjustments including pro-rated charges, cancellations, discounts, and refunds
4. Usage Fee - Consumption-based charges
5. One-Time Fee - Fee for one-time purchases
6. Item Fee - Charge type for license-based subscriptions that are not prepaid

Purchase Fee

Definition: The initial charge generated when a subscription is first purchased, representing a prorated cost for the first billing period.

When it appears:

• Generated in the next invoice after the subscription start date
• Only appears once per subscription (at initial purchase)

Example: If a subscription starts on January 15 with monthly billing, the Purchase Fee represents the prorated charges for January 15-February 14.

Cycle Fee

Definition: Periodic charges for a subscription during regular billing cycles.

When it appears:

• Generated at the beginning of each billing cycle if the subscription is active
• For monthly subscriptions: appears monthly
• For annual subscriptions: appears yearly

Example: A subscription with 10 licenses and a monthly cycle will generate a Cycle Fee on each billing date for the next month's service.

Correction

Definition: Adjustments to previous charges based on subscription changes.

When it appears:

• When license quantity changes during a billing period
• When a subscription is suspended or reactivated
• When discounts are applied or removed
• When refunds are processed

Key characteristics:

• The quantity for a correction is always 1
• Unit Price = Total Price for corrections

Example: If 5 licenses are added mid-cycle, a positive correction appears on the next invoice for the prorated cost of those 5 licenses for the partial period they were active.

Usage Fee

Definition: Charges based on actual consumption of resources or services.

When it appears:

• At the end of a billing cycle for consumption-based subscriptions
• Reflects actual usage during the previous period

Key characteristics:

• The quantity is always 1
• Unit Price = Total Price for usage fees
• Aggregates all consumption data for the billing period

Example: Azure services used throughout January will appear as a Usage Fee on the February invoice.

One-Time Fee

Definition: A single charge for a non-recurring purchase.

When it appears:

• On the next billing date after a one-time purchase

Example: Software with a perpetual license purchased on March 15 will appear with a One-Time Fee on the April invoice.

Item Fee

Definition: Charge type used for license-based subscriptions that are not prepaid (similar to Cycle Fee but for prepaid license-based subscriptions).

When it appears:

• For specific license models with prepaid characteristics

Charge Type Mapping

Microsoft Charge Types

The Platform aggregates approximately 25 different Microsoft charge types into the 6 main platform charge types. The following table shows this mapping:

Adobe Charge Types

Adobe uses a different set of charge types. The Platform displays these charge types as received from Adobe:

Charge Aggregation Process

The Platform performs charge aggregation to simplify the billing experience:

1. Data Collection: Platform retrieves vendor charges with original charge types
2. Mapping: Each vendor charge type is mapped to one of the platform's six charge types
3. Aggregation: Similar charges may be combined based on configuration
4. Presentation: Charges appear on invoices using the platform's standardized charge types

Benefits of Charge Aggregation

• Simplified Invoices: Reduces complexity for customers
• Consistent Experience: Provides uniform terminology across vendors
• Easier Reconciliation: Standardizes charge types for accounting purposes

Leran more here: Charge Aggregation in the Platform

Summary

The Platform uses six primary charge types—Purchase Fee, Cycle Fee, Correction, Usage Fee, One-Time Fee, and Item Fee—to standardize billing across multiple vendors. Each charge type serves a specific purpose, from initial subscription purchases to recurring billing cycles, prorated adjustments, and usage-based charges. The platform aggregates vendor-specific charge types from Microsoft, Adobe, and other vendors into these standardized types, simplifying invoices and providing a consistent billing experience. Understanding when each charge type appears and how vendor charges are mapped is essential for accurate financial tracking and reconciliation.

Related Articles

• Billing Concepts Overview
• Subscription Types Explained
• Billing Cycles and Frequency
• Changing Billing Frequency
• Detailed Invoice Line Items
• Charge Aggregation in the Platform