SECTIONSEarly Termination of Contracts and Contract Line Items
When you end a contract early or apply a change request, you might be able to move a contract line item's end date to before its Billed To date. This can mean that your customer is entitled to a refund, so the ability to do it is controlled by the Allow End Contract Line Before Billed To field in the Billing Central Settings custom setting.
When you move a contract line item's end date to before its Billed To date:
- Billing schedules that start after the new end date are deleted.
- The final billing schedule finishes on the new end date.
- Complete billing documents are unchanged.
If your org is configured to end contracts via change requests, or you have moved the contract line item's end date by editing it in a change request, when the change request is applied Billing Central creates a draft credit note automatically for the amount (if any) to be refunded to the customer. You can turn off this automatic creation of draft credit notes by selecting Disable Automatic Credit Note Creation in the Billing Central Settings custom setting. For more information, see Automatic Creation of Draft Credit Notes When Applying Change Requests.
If your edits mean that no lines are ended before their Billed To date, or lines are ended before their Billed To date but they are not worth less than was billed, no refund is due. Applying a change request or ending a contract is then as explained in Change Requests and Ending Contracts.
Example
A three year contract ends on December 31 2024. It comprises four contract line items. Billing schedules for all four lines are generated up to the end of 2024. Note each line's Start Date and Billed To date in the table below.
|
Billing Type |
Start Date |
End Date |
Billed To |
New End Date |
|---|---|---|---|---|
| Recurring Fixed | January 1, 2022 | December 31, 2024 | January 2, 2023 | December 15, 2022 |
| One-off | January 1, 2022 | December 31, 2024 | December 31, 2024 | December 15, 2022 |
| Recurring Variable | January 1, 2022 | December 31, 2024 | May 2, 2022 | December 15, 2022 |
| Recurring Fixed | January 1, 2023 | December 31, 2024 | December 31, 2023 | December 15, 2022 |
When you move the end date of all four lines to December 15 2022 by ending the contract early:
- The first Recurring Fixed line has its billing schedules beyond December 2022 deleted. Its billing schedule for December 2022 is updated to end on December 15, and the value of this billing schedule is recalculated to take account of the contract's proration policy.
- The One-off line's billing schedule is updated to end on December 15.
- The Recurring Variable line has its billing schedules beyond December 2022 deleted. Its billing schedule for December 2022 is updated to end on December 15. You can continue to bill this line for the period May 3 2022 - December 15 2022.
If you use a change request to move this line's end date, its billing schedules between May 3 and December 15 are deleted (because they have not been billed) then regenerated by a background job. See Setting up a Job to Generate Billing Schedules.
- The second Recurring Fixed line is canceled because its start date is after the new end date. All its billing schedules are deleted. See Canceled Contract Line Items.
The Recurring Fixed lines were both billed beyond the new end date. If you set the new end date by ending the contract, but not via a change request, you can manually convert the complete billing documents for these charges to credit notes and choose to Allow Rebilling so that the customer is rebilled up to December 15 only. The second Recurring Fixed line cannot be rebilled because it has been canceled. The One-off line was also billed beyond the new end date and might require a partial refund depending on your business practices.
If you set the new end date by ending the contract via a change request, or by editing each contract line item's end date in a change request, see Automatic Creation of Draft Credit Notes When Applying Change Requests for information about how Billing Central creates a credit note automatically to refund the customer.