Contract line billing examples
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This topic is only applicable to termed contracts. A termed contract has both start and end dates.
There are numerous ways you can set up billing for contract lines. This topic contains a few examples of how you could complete the Billing section on a contract line to achieve common fixed price and quantity-based billing scenarios.
Use the billing schedule preview to instantly see the expected billing schedule based on different billing options without affecting contract line journal balances.
The Order Entry transaction definition that you use when you generate a contract invoice contains the tax calculation logic. If logic exists, the sales tax is automatically calculated and included in the contract invoice. As with Order Entry transactions, tax related to kits is calculated on the kit item and not on the kit components.
If it is your business process to do so, you can edit the contract invoice in Order Entry to manually enter or update sales tax amounts. You do not enter any sales tax information in Contracts.
One-time fee
50.00 one-time set up charge.
| Field | What to enter: |
|---|---|
| Contract line Start date and GL posting date | The date you want to bill the fee |
| Billing method | Choose Fixed price or Quantity-based with Quantity type = Variable. |
| Flat/Fixed amount frequency | One-time |
| Flat/Fixed amount | 50.00 |
Fixed price recurring, monthly billing cycle
100.00/month for the duration of the contract line term. Bills on the 15th of each month starting in January.
| Field | What to enter: |
|---|---|
| Contract line Start and End dates and GL posting date |
January 15, 2021 through MM/14/YYYY Make sure the contract line start and end dates line up properly in order to achieve the correct number of total invoices for the term. In most use cases, you will set the GL posting date to the same date as the contract line start date. |
| Billing method | Fixed price |
| Flat/Fixed amount frequency | Include with every invoice |
| Billing frequency | Monthly |
| Flat/Fixed amount | 100.00 |
Fixed price, custom billing cycle
1,200.00 total contract line amount for one-year term with six billing periods. Bills on the first day of each billing period starting on June 1st.
| Field | What to enter: |
|---|---|
| Billing method | Fixed price |
| Flat/Fixed amount frequency | Use billing template |
| Billing template | Use an existing (or create a new) billing template that has six billing periods set at the desired intervals. |
| Billing template Start date and GL posting date | June 1 |
| Flat/Fixed amount | 1,200.00 |
Fixed price, annual billing cycle
43,200.00 total contract line amount for three-year term. Bills on the first day of each year starting on June 1st.
| Field | What to enter: |
|---|---|
| Contract line Start and End dates and GL posting date |
June 1, 2021 through May 31, 2024 In most use cases, you will set the GL posting date to the same date as the contract line start date. |
| Billing method | Fixed price |
| Flat/Fixed amount frequency | Include with every invoice |
| Billing frequency | Annually |
| Flat/Fixed amount | 14,400.00 |
Fixed quantity, monthly billing cycle
100.00/per user/per month. 12 users.
There are three examples for this scenario.
Example 1
| Field | What to enter: |
|---|---|
| Contract line Start and End dates and GL posting date |
Make sure the contract line start and end dates line up properly in order to achieve the correct number of total invoices for the term. In most use cases, you will set the GL posting date to the same date as the contract line start date. |
| Billing method | Fixed price |
| Flat/Fixed amount frequency |
Include with every invoice |
| Billing frequency | Monthly |
|
Calculate: Quantity Rate
|
Quantity = 12, Rate = 100 |
Example 2
Usage rate defined in billing price list entry.
| Field | What to enter: |
|---|---|
| Billing method | Quantity-based |
| Quantity type | Variable |
| Flat/Fixed amount frequency | One-time. In this scenario, the Flat/Fixed amount frequency doesn't matter as the Flat/Fixed amount = 0.00. |
| Flat/Fixed amount | 0.00 |
| Reset usage quantity | After each invoice |
| Usage quantity recurs | False |
| Usage record | Each month, add/upload a usage record with quantity = 12. |
Example 3
Usage rate defined in billing price list entry.
| Field | What to enter: |
|---|---|
| Billing method | Quantity-based |
| Quantity type | Variable |
| Flat/Fixed amount frequency | One-time. In this scenario, the Flat/Fixed amount frequency doesn't matter as the Flat/Fixed amount = 0.00. |
| Billing frequency | Monthly |
| Flat/Fixed amount | 0.00 |
| Reset usage quantity | After each invoice |
| Usage quantity recurs | True |
| Usage record |
Add/upload one usage record with quantity = 12 in the first month of the contract. The system creates a new usage record with quantity = 12 each billing period for the duration of the contract. |
Variable quantity, monthly billing cycle
Bill for each widget used each month (usage rate defined in billing price list entry).
| Field | What to enter: |
|---|---|
| Billing method | Quantity-based |
| Quantity type | Variable |
| Flat/Fixed amount frequency | One-time. In this scenario, the Flat/Fixed amount frequency doesn't matter as the Flat/Fixed amount = 0.00. |
| Flat/Fixed amount | 0.00 |
| Usage quantity recurs | False |
| Reset usage quantity | After each invoice |
| Usage record |
Add/upload usage record every month. |
Flat amount and variable quantity, quarterly billing cycle
500.00/year and 10.00 for each widget used (usage rate defined in billing price list entry), with the used widget count accumulating throughout the contract line term. Bills on the 10th day of each billing period starting February 10.
Example 1
| Field | What to enter: |
|---|---|
| Billing method | Quantity-based |
| Quantity type | Variable |
| Flat/Fixed amount frequency | Use billing template |
| Billing template | Use an existing (or create a new) billing template that has four billing periods set at 4 = 25%, 7 = 25%, 10 = 25 %, 13 = 25% |
| Billing template Start date and GL posting date |
February 10, 2021 through February 9, 2022 In most use cases, you will set the GL posting date to the same date as the billing template start date. |
| Flat/Fixed amount | 500.00 |
| Usage quantity recurs | False |
| Reset usage quantity | After each renewal |
| Usage record |
Add/upload usage records when applicable. |
Example 2
| Field | What to enter: |
|---|---|
| Billing method | Quantity-based |
| Quantity type | Variable |
| Flat/Fixed amount frequency | Include with every invoice |
| Billing frequency | Quarterly |
| Contract line Start and End dates and GL posting date |
February 10, 2021 through February 9, 2022 In most use cases, you will set the GL posting date to the same date as the contract line start date. |
| Flat/Fixed amount | 125.00 |
| Usage quantity recurs | False |
| Reset usage quantity | After each renewal |
| Usage record |
Add/upload usage records when applicable. |
