The Term field on the Subscription Item specifies what time period the given Quantity and Rate represents.
- For example, if the customer is being quoted in months, but is billed annually, the Per Term should be set to Months.
By adding a Per Term, this brings into play a Term Multiplier, which will calculate the amount to charge based on Quantity * Rate * Term Multiplier = Amount
Example: Fixed (recurring) & Usage (variable) Subscription with no Per Term Selected and a Quarterly (Calendar Quarter) Charge Schedule
1. No value selected under Per Term
Notice under the Charge Table that the Term is categorized as Period and the Amount is 10, meaning that the customer is only charged $10 each quarter.
2. The value Months added to the Per Term field
Notice that the Term Multiplier and Term have changed. The Term Multiplier is 3 because that’s the number of months in a Quarter. The Term is listed as Months because the Per Term is set to Months, no longer mirroring the period defined on the Charge Schedule. The Per Term field allows you to capture monthly charges accrued in the Quarterly Charge Schedule period which changes the Amount. The Term Multiplier changes the Amount while allowing you to preserve the Quantity and Rate.
3. If the End Date ends before the Quarter:
The Term Multiplier will automatically adjust the number of months that fit into the last period which will display a prorated Amount. Within a single ‘partial’ month, proration will be driven by number of days out of the month.
Rate types that can use the Per Term field:
- Fixed (Recurring)
- Fixed (Recurring) and Usage (Variable)- can be used for the fixed portion
- Prepaid Item Quantity
- Prepaid Subscription (Amount)