License-based subscriptions

License-based subscriptions are calculated based on subscription events:

• subscription provisioned,
• subscription suspended/reactivated,
• subscription quantity changed. 
• billing frequency changed. 

License subscription is invoiced in advance based on the last subscription quantity in the last billing period. If any changes happen to a subscription after fee in advance, it gets a correction in the next billing period. There are following charge types: 

• Purchase fee: initial fee for a subscription, generated in the next invoice after the subscription start date. The Purchase fee cost is a prorated cost for the first billing period of subscription.
• Cycle fee: periodic charges for subscription, generated based on subscription’s quantity at the end of its billing period if the subscription is active. Monthly subscriptions get cycle fee every month, annual subscriptions – every year (in case if the subscription is active on invoice date).
• Correction: prorated charges for a subscription based on previous cycle fee/purchase fee and actual subscription cost for the previous period (is generated in case if a number of seats have been changed, the subscription has been suspended or reactivated). The quantity for a correction is always 1, this also means that Unit Price = Total Price.

If License-based subscription is suspended within 30 days after purchase – the full cost of first
30 days are returned to the customer.

Examples:
1. Purchase fee, cycle fee: billing cycle is the same:

Scenario: subscription started on 15th of April 2018, and organization invoicing date is 1. On the first billing date, on 1st of May 2018, the invoice will contain a purchase fee for period from 15th of April to 1st of May, and a cycle fee for period of 1st of May to 1st of June. Starting from the next month on 1st of June 2018, the invoices will contain only the cycle fee.

You will receive the following invoices:

	Invoice Date	Charge Start Date	Charge End Date	Quantity	Charge type
Invoice 1	01/05/2018	15/04/2018	01/05/2018	1	Purchase fee
Invoice 1	01/05/2018	01/05/2018	01/06/2018	1	Cycle fee
Invoice 2	01/06/2018	01/06/2018	01/07/2018	1	Cycle fee

 

2. Purchase fee, cycle fee: billing cycle is different:

Scenario: subscription started on 15th of April 2018. On the first invoicing date on 1st of May 2018, the invoice will contain only a purchase fee with a prorate fee for period from 15th of April to 15th of May. Starting from the next month, on 1st of June 2018, the invoices will contain only cycle fee.

You will receive the following invoices:

	InvoiceDateUtc	ChargeStartDate	ChargeEndDate	Quantity	Charge type
Invoice 1	01/05/2018	15/04/2018	15/05/2018	1	Purchase fee
Invoice 2	01/06/2018	15/05/2018	15/06/2018	1	Cycle fee
Invoice 3	01/07/2018	15/06/2018	15/07/2018	1	Cycle fee

 

3. Correction when a subscription is suspended on invoicing day:

Scenario: subscription started on 1st of September 2018.  At the end of the billing cycle, on 1st of October 2018, the invoice will contain a purchase fee for period from 1st of September to 1st of October, and a cycle fee for period 1st of October to 1st of November. On 1st of November, the day when the subscription is suspended, the invoice will contain the cycle fee for the whole period from 1st of November to 1st of December. On 1st of December, a negative correction for all unused days for the period from 1st of November to 1st of December will be invoiced.

You will receive the following invoices:

	InvoiceDateUtc	ChargeStartDate	ChargeEndDate	Quantity	Charge Type
Invoice 1	01/10/2018	01/09/2018	01/10/2018	1	Purchase fee
Invoice 1	01/10/2018	01/10/2018	01/11/2018	1	Cycle fee
Invoice 2	01/11/2018	01/11/2018	01/12/2018	1	Cycle fee
Invoice 3	01/12/2018	01/11/2018	01/12/2018	1	Correction (for unused days 11/1/2018 – 12/1/2018)

 

4. Correction when subscription is suspended on different day from the invoicing day:

Scenario: subscription started on 7th of May 2018.  On the first billing date, on 1st of June 2018, the invoice will contain only a purchase fee for period from 7th of May to 7th of June. The next month, only a cycle fee will be invoiced for period from 7th of June to 7th of July. The subscription is suspended on 28th of June, meaning that the next invoice, on 1st of August 2018, will contain a negative correction for unused days for period from 28th of June to 7th of July. 

You will receive the following invoices:

	InvoiceDateUtc	ChargeStartDate	ChargeEndDate	Quantity	ChargeType
Invoice 1	01/06/2018	07/05/2018	07/06/2018	1	Purchase fee
Invoice 2	01/07/2018	07/06/2018	07/07/2018	1	Cycle fee
Invoice 3	01/08/2018	07/06/2018	07/07/2018	1	Correction (for unused days (6/28/2018–7/7/2018)

 

5. Correction for change quantity:

Scenario: subscription with quantity 1 started on 7th of May 2018. On the first billing date, on 1st of June 2018, the invoice will contain a purchase fee for period from 7th of May to 7th of June. On the next billing date, only a cycle fee will be invoiced for period from 7th of June to 7th of July. The subscription quantity is changed from1 to 2 on 18th of June. 

The invoice on 1st of August will contain the cycle fee for period from 7th of July to 7th of August, as well as a positive correction for days from 18th of June to 7th of July when the quantity already was changed to 2. 

You will receive the following invoices:

	InvoiceDateUtc	ChargeStartDate	ChargeEndDate	Quantity	ChargeType
Invoice 1	01/06/2018	07/05/2018	07/06/2018	1	Purchase fee
Invoice 2	01/07/2018	07/06/2018	07/07/2018	1	Cycle fee
Invoice 3	01/08/2018	07/07/2018	07/08/2018	2	Cycle fee
Invoice 3	01/08/2018	07/06/2018	07/07/2018	1	Correction (for days with quantity = 2: 6/18/2018 – 7/7/2018)

 

6.  Annual subscription:

Scenario: annual subscription started on 5th of January 2018.  On the first invoice date, on 1st of February 2018, the invoice will contain a purchase fee for for annual period from 5th of January 2018 to 5th of January 2019.

The subscription quantity is increased on 15th of April 2018. On the next billing date, on 1st of May, the invoice will contain a prorate correction for days from 15th of April 2018 to 5th of January 2019 with increased quantity. 

On 16th of July, the subscription is suspended. On 1st of August, a new invoice is issued. It contains a negative correction for unused days for period from 16th of July 2018 to 5th of January 2019.

The subscription is reactivated on 14th of October 2018, meaning that on 1st of November, there will be an invoice with a positive prorate correction for days from 14th of October 2018 to 5th of January 2019.

You will receive the following invoices:

	InvoiceDateUtc	ChargeStartDate	ChargeEndDate	Quantity	ChargeType
Invoice 1	01/02/2018	05/01/2018	05/01/2019	1	Purchase fee
Invoice 2	01/05/2018	05/01/2018	05/01/2019	1	Correction (for days with increased quantity (15/04/2018 – 05/01/2019)
Invoice 3	01/08/2018	05/01/2018	05/01/2019	1	Correction (for unused days (16/07/2018 – 05/01/2019)
Invoice 4	01/11/2018	05/01/2018	05/01/2019	1	Correction (for used days (14/10/2018 – 05/01/2019)

 

7. Purchase fee:

Purchase fee calculation logic differs from cycle fee calculation logic. The purchase fee is a prorated cost for the whole first period (and cycle fee is calculated based on the initial quantity of a period).

As an example: The unit price for a subscription that starts on 8th of January 2018 is 10 EUR. Initially, it has a quantity 1 that is increased to 5 on 29th of January. The purchase fee calculated on 1st of February will be 1*(10*21/31)+5*(10*10/31) = 22.90 EUR. On the other hand, the cycle fee in case of a quantity change in the middle of the billing cycle, would have a correction only in the next month's invoice. For instance, if the quantity is changed on 25th of February, the cycle fee correction will appear in the invoice issued on 1st of April.

 

8. Complex example with amounts for several contracts with different billing cycles 1:

Scenario: subscription started on 10th of April 2018, so it’s billing cycle is 10. Subscription was suspended on 28th of May. Vendor-Reseller contract has billing cycle 1. Unit price for the subscription for the Reseller is 50.38 SEK. In this case invoices from Vendor to Reseller will be following:

 

You will receive the following invoices:

	InvoiceDateUtc	ChargeStartDate	ChargeEndDate	Quantity	ChargeType	UnitPrice	TotalPrice
Invoice 1	01/05/2018	10/04/2018	10/05/2018	6	Purchase Fee	50.38	302.28
Invoice 2	01/06/2018	10/05/2018	10/06/2018	6	Cycle Fee	50.38	302.28
Invoice 3	01/07/2018	10/05/2018	10/06/2018	1	Correction	-136.51	-136.51

For the first two months, the total price would be 302.28 SEK (in the first month, it is a purchase fee, while in the second month - a cycle fee). On 28th of May, the subscription is suspended. The suspension happens during the second billing cycle; therefore, the third invoice, on 1st of July, would contain a correction for period from 28th of May to 10th of June (14 unused days). It would be calculated as follows: -6 (quantity) *(50.38 (unit price) * 14/31 (days)) = -136.51 SEK. A correction will always have a quantity 1.

 

 

9. Complex example with amounts for several contracts with different billing cycles 2:

Subscription started on 10th of April 2018, so it’s billing cycle is 10. Reseller invoices his customers on 5th day of each month. Customer unit price is 63 SEK. Reseller to Customer invoice is:

You will receive the following invoices:

	InvoiceDateUtc	ChargeStartDate	ChargeEndDate	Quantity	ChargeType	UnitPrice	TotalPrice
Invoice 1	05/05/2018	10/04/2018	10/05/2018	6	Purchase Fee	63	378
Invoice 2	05/06/2018	10/05/2018	10/06/2018	6	Cycle Fee	63	378
Invoice 3	05/07/2018	10/05/2018	10/06/2018	1	Correction	-170.71	-170.71

For the first two months, the total price would be 378 SEK (in the first month, it is a purchase fee, while in the second month - a cycle fee). On 28th of May, the subscription is suspended. The suspension happens during the second billing cycle; therefore, the third invoice, on 5th of July, would contain a correction for period from 28th of May to 10th of June (14 unused days). It would be calculated as follows: -6 (quantity) *(63 (unit price) * 14/31 (days)) = -170.71 SEK. A correction will always have a quantity 1.

 

 

10. Complex example with amounts for several contracts with different billing cycles 3:

Support organization invoices reseller on 10th day of each month. Unit price for the reseller is 3.15 SEK. Billing cycle of the subscription is the same as the contract billing cycle. The invoice for 10/04/2018 will not contain any data for the subscription because 10/04/2018 is considered as a start of billing period 10/04/2018 – 10/05/2018. Invoices for this contract will be following (first invoice will contain data for two periods):

 

You will receive the following invoices:

	InvoiceDateUtc	ChargeStartDate	ChargeEndDate	Quantity	ChargeType	UnitPrice	TotalPrice
Invoice 1	10/05/2018	10/04/2018	10/05/2018	6	Purchase Fee	3.15	18.90
Invoice 1	10/05/2018	10/05/2018	10/06/2018	6	Cycle Fee	3.15	18.90
Invoice 2	10/06/2018	10/05/2018	10/06/2018	1	Correction	-8.54	-8.54

The first invoice, on 10th of May 2018, will contain a purchase fee for 18.90 SEK (6*3.15) and a cycle fee for 18.90 SEK. The subscription is suspended on 28th of May 2018; therefore, the invoice on 10th of June will have a negative correction for 14 unused days. It would be calculated as follows: -6 (quantity) *(3.15 (unit price) * 14/31 (days)) = -8.54 SEK. A correction will always have a quantity 1.

11. Full cost refund when subscription suspended during the first billing month:

If subscription was suspended during first 30 days after purchase date, customer will get back full cost.

 

You will receive the following invoices:

	InvoiceDateUtc	ChargeStartDate	ChargeEndDate	ChargeType	Quantity	UnitPrice	TotalPrice
Invoice 1	06/02/2020	04/02/2020	04/03/2020	Purchase fee	10	11.90	119.00
Invoice 2	06/03/2020	07/02/2020	04/03/2020	Correction	1	-119.00	-119.00

Subscription was purchased on 04/02/2020 and suspended on 07/02/2020. The second invoice contains a correction for full cycle as the suspension was done during the first 30 days after the purchase.

 

12. Subscription with annual billing frequency was suspended in first 30 days:

Subscription was purchased on 11/03/2020 and suspended on 27/03/2020. The second invoice contains correction for the full annual cycle as the suspension done during the first 30 days after the purchase.

You will receive the following invoices:

	InvoiceDateUtc	ChargeStartDate	ChargeEndDate	ChargeType	Quantity	UnitPrice	TotalPrice
Invoice 1	16/03/2020	11/03/2020	11/03/2021	Purchase fee	7	62.90	440.30
Invoice 2	16/04/2020	27/03/2020	11/03/2021	Correction	1	-440.30	-440.30

 

13.  Subscription suspended after renewal:

For example, on 2nd of April, a subscription was renewed with a new unit price 48.00 (previously, the unit price had been 40). Then customer decided to suspend the subscription on 15th of April. As the subscription was suspended during the first 30 days after the renewal, a full cost will be refunded in the second invoice. 

You will receive the following invoices:

	InvoiceDateUtc	ChargeStartDate	ChargeEndDate	ChargeType	Quantity	UnitPrice	TotalPrice
Invoice 1	10/04/2019	02/04/2019	02/04/2020	Purchase fee	1	40.00	40.00
Invoice 1	10/04/2020	02/04/2020	02/04/2021	Cycle fee	1	48.00	48.00
Invoice 2	10/05/2020	15/04/2020	02/04/2021	Correction	1	-48.00	-48.00

 

14. Correction when subscription is suspended on different day from invoicing day:

Support organization invoices reseller on 18th day of each month. The billing cycle is 26th. For example, a subscription was suspended on 27th of April. There are 30 days in period from 26th Apr to 26th May and correction should be for 29 unused days from monthly cycle.

Correction is 3 * (50.28/30) * (30 – 1) = 145.812

You will receive the following invoices:

	InvoiceDateUtc	ChargeStartDate	ChargeEndDate	ChargeType	Quantity	UnitPrice	TotalPrice
Invoice 1	18/04/2020	26/03/2020	26/04/2020	Cycle fee	3	50.28	150.84
Invoice 2	18/05/2020	26/04/2020	26/05/2020	Cycle fee	3	50.28	150.84
Invoice 2	18/05/2020	27/04/2020	26/05/2020	Correction	1	-145.81	-145.81

 

15. Quantity changed during first billing period:

The reseller is invoiced on 20th day of each month. The billing cycle is the 6th. Quantity was changed from 64 to 65 on 5th of March  – in the last day of the first billing period. There are 29 days in the billing period from 6th of February till 6th of March.

Unit price for 1 license per 1 day is 3.37 / 29 = 0.1162 = 0.12

Correction is (64 * 0.12) * 28 + 65 * 0.12 * 1 = 215.79

You will receive the following invoices:

	InvoiceDateUtc	ChargeStartDate	ChargeEndDate	ChargeType	Quantity	UnitPrice	TotalPrice
Invoice 1	20/03/2020	06/02/2020	06/03/2020	Purchase fee	1	215.79	215.79
Invoice 1	20/03/2020	06/03/2020	06/04/2020	Cycle fee	65	3.37	219.05
Invoice 2	20/04/2020	06/04/2020	06/05/2020	Cycle fee	65	3.37	219.05

 

Date	Quantity	Period
06/02/2020	64	28 days
05/03/2020	65	1 day

 

16. Quantity changed during first billing period for addons:

The reseller is invoiced on 20th day of each month. The billing cycle is the 6th. The quantity is changed on 21st of April.

There are 30 days in period from 3rd of April till 3rd of May. 

Usage for 1 license per 1 day = 83.88/30 = 2.796

Total price for period is (12*28 + 18*10) * 2.796 = 1442.736 = 1442.74

Date	Quantity	Period
03/04/2020	8	0 days
03/04/2020	10	18 days
21/04/2021	28	12 days

 

	InvoiceDateUtc	ChargeStartDate	ChargeEndDate	ChargeType	Quantity	UnitPrice	TotalPrice
Invoice 1	01/06/2020	03/04/2020	03/05/2020	Purchase fee	10	83.88	1442.74
Invoice 1	01/06/2020	03/05/2020	03/06/2020	Cycle fee	28	83.88	2348.64

 

17. Offer is purchased on the day before the last day of a month:

Invoice date is 1st. Customer purchases a subscription on 30.01. of 5 licenses with price per unit of 10.

	InvoiceDateUtc	ChargeStartDate	ChargeEndDate	ChargeType	Quantity	UnitPrice	TotalPrice
Invoice1	01/02/2021	30/01/2021	28/02/2021	Purchase fee	5	10	50
Invoice2	01/03/2021	28/02/2021	31/03/2021	Cycle fee	5	10	50

 

18. Offer is purchased on the day before the last day of a month and quantity is changed on the last day of that month:
Invoice date is 1st. Customer purchases a subscription on 30.01. of 5 licenses with price per unit of 10. On 31.01. customer adds 5 more licenses at the same price.

	InvoiceDateUtc	ChargeStartDate	ChargeEndDate	ChargeType	Quantity	UnitPrice	TotalPrice
Invoice1	01/02/2021	30/01/2021	31/01/2021	Purchase fee	5	0.344	1.72
Invoice1	01/02/2021	31/01/2021	28/02/2021	Purchase fee	10	9.655	96.55
Invoice2	01/03/2021	28/02/2021	31/03/2021	Cycle fee	15	10	150

In default invoice view platform would show aggregated invoice line with total amount 98.27 EUR.
In expand mode platform would show 2 lines of Purchase fee.

1st line Purchase Fee: 10 unit price / 29 days * 1 day * 5 licenses = 1.72

2nd line Purchase Fee: 10 unit price / 29 days * 28 days * 10 licenses = 96.55