Cancel or end an evergreen contract

An evergreen contract does not have an end date.

When a customer decides to discontinue a subscription, you can either cancel the applicable contract line or you can end it.

If you want to cancel a contract line, you use the cancellation function and specify a cancellation date. Canceling a contract line sets the "In progress" contract line's state to "Canceled". This state change happens in the recurring billing period in which the cancellation date falls.

If you want to end a contract line, you edit the "In progress" contract line to indicate it is no longer recurring. Intacct sets the contract line state to "Closed".

In both scenarios, billing and revenue stop for the canceled or closed contract line as of the applicable date. Which process you choose depends on how you want to report on contract line data. For example, say the customer wants to end their relationship with your company. In this case, you might use cancel and report this as churn. If the customer wanted to stop their current subscription level and start a different one, you might want to end the contract line instead of canceling it and report it as an upgrade. How you terminate a contract line really depends on your business process.

Cancel an evergreen contract line

Before canceling an evergreen contract line

1. If the cancellation date will result in a partial billing period, do you want to bill the full period or the partial period? If you want to bill the full period, you do not have to change anything. If you want to bill for the partial period, do the following:
   1. Manually calculate the amount of the remaining partial period for the billing period. Follow your business process regarding partial period calculations.

      For example, say the recurring billing period is January 01 - January 31. The customer wants to cancel January 15. Manually calculate the partial period of January 1 - 14.

   2. Edit the contract line Flat/fixed amount to equal the partial amount.

      For example, say the scheduled billing amount for January is 100.00. You want to bill a partial period of 45.16 ((100/31 = daily rate of 3.23) x 14), so you change the Flat/Fixed amount on the contract line to 45.16.

2. If there is open scheduled billing prior to the cancellation date that you want to bill, you can generate the invoice before or after cancellation as long as the Invoice/GL posting date for the invoice is prior to cancellation date.
3. If there is open scheduled revenue or expenses prior to the cancellation date that you want to post, you can post them before or after cancellation as long as the posting date is prior to the cancellation date.

Cancel a contract line in the current recurring billing period

If you cancel with an adjustment, Intacct creates the adjustment for the invoice for the current recurring billing period only. If you have open invoices from previous recurring billing periods that will never be paid, you will need to create and apply the necessary adjustments manually.

See Field descriptions: Cancel Contracts for information on each field.

To cancel an evergreen contract line in the current recurring billing period:

1. Open an existing contract in Edit mode.
2. In the Contract lines section, select the pencil icon next to the contract line you want to cancel.
3. In the Contract lines window, select More actions and then select Cancel contract line.

   The Cancel the contract line window appears with the Apply to billing and revenue schedules checkbox automatically selected.

4. Use the calendar tool to select the Cancellation date. See Cancellation date in the Field descriptions table for date implications.
5. Optionally, select whether to have Intacct Create adjustments for the canceled items.

   Typically, you will only select this field if the billed amount prior to cancellation will never be paid and you will never recognize revenue for this amount.

   Intacct will automatically apply the adjustment to the open invoice for the current recurring billing period only. You will not be able to uncancel the contract line if you cancel with an adjustment.

   See Create adjustments in the Field descriptions table to see how this field affects revenue and billing schedules.

6. Select OK.
7. Post the open revenue recognition. The posting date must be prior to the cancellation date.
8. If the cancellation date is in the current recurring billing period, generate the invoice for any open billing.

Cancel a contract line in a future recurring billing period

You can cancel an evergreen contract line using a cancellation date in a future recurring billing period. The contract line will continue to recur as applicable until the cancellation date.

For example, say the current recurring billing period is monthly, starts June 01 and ends June 30. You want to cancel the contract effective August 31. The contract line remains "In progress" with a cancellation date of August 31. At the end of the August recurring billing period, Intacct sets the contract line's state to "Canceled".

You can see the future cancellation date on the current "In progress" contract line.

You cannot create an adjustment when canceling if you use a future cancellation date.

To cancel a contract line in a future recurring billing period:

1. Open an existing contract in Edit mode.
2. In the Contract lines section, select the pencil icon next to the contract line you want to cancel.
3. In the Contract lines window, select More actions and then select Cancel contract line.

   The Cancel the contract line window appears with the Apply to billing and revenue schedules checkbox automatically selected.

4. Use the calendar tool to select the future Cancellation date. See Cancellation date in the Field descriptions table for date implications.
5. Select OK.
6. Continue invoicing and recognizing revenue as usual through the recurring billing period in which the cancellation date falls. The invoice date for the last invoice must be before the cancellation date.

Uncancel an evergreen contract line

You can uncancel an evergreen contract line if you did not cancel it with an adjustment.

End an evergreen contract line

You can end an evergreen contract line by editing the "In progress" contract line and clearing the Recurring checkbox. At the end of the recurring billing period or when indicated by the evergreen template, Intacct sets its state to "Closed". You can still invoice and recognize revenue for "Closed" contract lines.

If you reopened a contract line from a previous recurring billing period to end it, Intacct immediately sets the contract line's state to "Closed" when you save the contract line and removes it from the Contract lines grid. Use the contract's Evergreen history tab to view the contract details.

To end an evergreen contract line:

1. Open an existing contract in Edit mode.
2. In the Contract lines section, select the pencil icon next to the contract line you want to end.
3. In the Contract lines window, clear the Recurring checkbox.

   A message appears asking you to confirm the change to non-recurring.

4. Select OK.
5. Select Save.

Reopen an ended contract line

You can reopen an ended contract line if necessary.