Subscription Item fields Rate and Total Value cannot be used together.
Consider the following when determining if Total Value satisfies the use case requirements:
- Are services/products sold by cost per term (e.g. $50/month) or does the Customer agree to a total value (e.g. $13,000 per year, which is billed monthly)? If it’s the latter, the total value does not divide evenly across Charge Periods, Total Value is the recommended solution.
- If quotes are calculated by an external system (SFDC, CPQ) and cannot be backed into a Rate for ZAB, a Total Value may be a better solution.
Use Case Example
The Total Value field satisfies scenarios where the exact amount quoted to a Customer needs to be delivered. This solves the issue of having a contract with a Total Value that cannot evenly distribute across charge periods.
For example, a one year Subscription Item is quoted at $13,000 per year and charged monthly. To determine a monthly Rate, you would need to divide the amount by the monthly Charge Periods. In this case, the $13,000 does not divide evenly into 12 months, and the Rate will need to be rounded to $1,083.33 (because currency only has two decimals). If a Rate of $1,083.33 is entered on the Subscription Item, the sum of all the Charges is $12,999.96, which is $0.04 less than the expected amount.
However, if we utilize the Total Value field on the Subscription Item, the Rate is automatically calculated based on the Total Value Amount, Term, and Quantity. The $13,000 will be divided over the 12 Charges , and the gap to value will be accounted for in the final Charge Period. In this case, the first 11 Charges would have a Rate of $1,083.33 and the final Charge with a Rate of $1,083.37.
Configuration: One Year Fixed (Recurring) Subscription Item with a Monthly (Calendar) Charge Schedule. The Total Value is set to $13,000 and a Per Term of 'Months'.
Outcome: Gap to value