Adjust usage values

There may be times you want to edit or delete a usage record but cannot because of restrictions. For example, the usage record was invoiced and you cannot delete the invoice.

How you adjust the usage value depends on whether the usage record is used for variable quantity billing, committed quantity billing, or quantity-based revenue recognition.

Positive adjustments

An example of a positive adjustment is when you invoiced a customer for a particular quantity, but they actually used more than the invoiced quantity. You need to increase the amount the customer owes for usage.

Variable quantity billing

On invoice, variable quantity usage values are credited to Billed Sales Revenue and debited from Billed AR using the accounts specified in the Contracts posting configuration.

If you need to make a positive adjustment to variable quantity billing, do one of the following:

If the quantity rate is the same for all quantities

Add a usage record for the difference between the actual and billed quantities to the current period.

For example, say you invoiced a quantity of 100 SMS messages in August, but the quantity used was actually 120. Add a usage record with a quantity of 20 (120 (actual quantity used) - 100 (the invoiced quantity) = 20) dated September. The usage will be billed in September instead of August.

If the quantity rate is different based on the actual quantity used

The following procedure will correct what the customer owes. However, if the usage quantity resets on renewal, the system counter will remain off by the difference between the actual quantity and the invoiced quantity. This may affect future billing rates.

1. Use the applicable billing price list entry information and manually calculate what the correct usage value should have been.
2. Create an Order Entry invoice with two line items:
   • a positive line for the actual usage value.
   • a negative line for the usage value already invoiced.

For example, say you invoiced a quantity of 100 SMS messages in August at a rate of 1.00 for a total of 100.00. However, the quantity used was actually 120 and there was a price break when quantity = 101 or greater that changed the rate for all quantities to 0.90.

In this scenario, you multiply 120 (the quantity used) by 0.90 (the volume tier rate), which results in the actual charge of 108.00. Add an Order Entry invoice with two lines: one line for 108.00 (actual charge) and another line for -100.00 (the amount previously invoiced).

Committed quantity billing and Quantity-based revenue recognition

Add a usage record for the difference between the actual and billed quantities to the current period.

For example, say you invoiced a quantity of 100 SMS messages in August, but the quantity used was actually 120. Add a usage record with a quantity of 20 (120 (actual quantity used) - 100 (the invoiced quantity) = 20) dated September. The usage will be billed in September instead of August.

Negative adjustments

An example of a negative adjustment is when you invoiced a customer for a particular quantity, but they actually used less than the invoiced quantity. You need to decrease the amount the customer owes for usage.

See Negative usage for restrictions.

Variable quantity billing

You can't use a negative usage quantity to create a negative amount on a contract invoice. You can only use a negative usage record to reduce the system counter used for price tiers if the usage quantity resets after renewal or to adjust recurring usage. If you want to adjust recurring usage, see Recurring usage.

To adjust variable quantity usage billing amounts:

1. Manually calculate the amount of the credit.
2. Do one of the following:
   • If you need to show the credit in an invoice, create an Order Entry invoice with a negative line item for the credit amount.
   • If you don't need to show the credit on an invoice, create a credit memo for the credit amount.
3. Apply the credit to the original contract invoice.
4. If the quantity resets on renewal and you want to reduce the system counter, add a usage record with a negative quantity for the quantity originally invoiced.

For example, say you invoiced a quantity of 150 SMS messages at a rate of 0.95 for a total of 142.50 in August. The customer actually only used 100 and should have been billed at a rate of 1.00 for a total of 100.00. 142.50 (invoiced usage value) - 100.00 (actual usage value) = 42.50 (credit amount). Create an invoice with a negative line for the amount of -42.50. If the system counter resets after renewal, create a usage record with a quantity of -100 to reduce the system counter.

Committed quantity billing

The kind of negative adjustment you can make for committed quantity usage depends on whether the contract line is participating in an MEA allocation.

If the contract line is not participating in an MEA allocation

Add a usage record with a negative usage quantity to the current period.

If the contract line is participating in an MEA allocation

In this situation, Intacct recommends waiting until there is a positive usage quantity that is greater than the incorrect negative quantity and then creating a usage record for the difference instead of trying to adjust the original invoice.

For example, say you invoiced a quantity of 150 SMS messages in August at a rate of 1.00 for a total of 150.00. The customer actually only used 100 messages for a total of 100.00. In September, the customer used 75 messages. Create a usage record for September with a quantity of 25.

Alternatively, do the following:

1. Add a credit contract line to account for the adjustment. Using the above example, add a fixed price contract line for -50.00.
2. Add a positive committed quantity contract line for the applicable quantity. Using the above example, add a contract line with a committed quantity of 50 and a rate of 1.00. You may need to manually code the usage for this contract line.

Quantity-based revenue recognition

Add a usage record with a negative usage quantity to the current period.

If the contract line is also using committed quantity billing AND is participating in an MEA allocation, see If the contract line is participating in an MEA allocation.