Billing for Usage

If the Billing Type of a contract line item is "Recurring Variable", you can create billing documents based on customer usage records associated with that contract line item.

In order to bill based on usage, you must define the contract line item's billing dates so that the customer is billed in arrears after their usage data has been uploaded. This ensures that the customer is billed accurately using their actual usage figures. Examples of how you can define billing dates in arrears are provided below.

Notes:

When creating a "Recurring Variable" contract line item, you can optionally enter a quantity as an estimated usage. The resulting sales price is then used on billing schedules as an estimate only. The actual amount billed for a billing period depends on whether usage records exist for the contract line item within the billing period.

The Bill in Arrears checkbox on a contract line item is for reporting purposes only. Selecting this checkbox does not cause the contract line item to be billed in arrears.

Examples of How to Define Billing Dates for Billing in Arrears

You might be able to define both billing periods and suitable billing dates using the Billing Term soft date. However, if you want to calculate billing dates independently from billing periods, you can do this by specifying a Recurring Bill Date.

For an introduction to how the Billing Term is used to calculate billing periods and billing dates, see Calculating Billing Periods and Billing Dates. For information about Recurring Bill Date, see Using Recurring Bill Date.

In this example a contract line item is assigned a Billing Term with the soft date MB+16d. This means that the contract line item has monthly billing periods starting on the seventeenth day of each month, and monthly billing dates falling on the seventeenth day of each month. Notice that the first bill date is after the end of the first billing period.

Billing Term Start Date First Bill Date
MB+16d November 21 2023 December 22 2023

Using the MB+16d soft date, the second billing date resolves to December 17 but that is earlier than the first bill date (December 22). Therefore the billing dates all move on one month and the customer is billed in arrears.

Billing Periods

Billing Dates
November 21 - December 16 December 22
December 17 - January 16 January 17
January 17 - February 16 February 17

In this example a contract line item is assigned a Billing Term with the soft date MB. This means that the contract line item has monthly billing periods starting on the first day of each month. The contract line item is also assigned a Recurring Bill Date with the soft date MB+4d. This means that the contract line item has monthly billing dates on the fifth day of each month.

Start Date Billing Term First Bill Date

Recurring Bill Date
January 15 2023 MB February 5 2023 MB+4d

By setting the first bill date to be after the end of the first billing period, future billing dates fall on the fifth day of the month after the billing period.

Billing Periods

Billing Dates
January 15 - January 31 February 5
February 1 - February 28 March 5
March 1 - March 31 April 5

If you did not set the Recurring Bill Date in this example, after the first bill date the billing dates would be calculated using the Billing Term soft date (MB) resulting in them being March 1, April 1.

In this example a contract line item is assigned a Billing Term with the soft date MB. This means that the contract line item has monthly billing periods starting on the first day of each month. The contract line item is also assigned a Recurring Bill Date with the soft date +2M. This means that the contract line item is billed every two months.

Start Date Billing Term First Bill Date

Recurring Bill Date
January 1 2023 MB January 31 2023 +2M

By apply the Recurring Bill Date (+2M) to the first bill date, future billing dates fall on the last day of every second billing period.

Billing Periods

Billing Dates
January 1 - January 31 January 31
February 1 - February 28 March 31
March 1 - March 31 May 31

If you did not set the Recurring Bill Date in this example, after the first bill date the billing dates would be calculated using the Billing Term soft date (MB) resulting in them being February 1, March 1.

Creating Usage Records

To create usage records and associate them with contract line items, do one of the following:

  • Click New Usage in the Usage related list of the contract line item to which you want to associate the usage information.
  • Create usage information manually using the Usage tab. See Creating Customer Usage Records.
  • Upload usage records using Salesforce upload tools. For information about the ways in which you can upload records, see the Salesforce Help.
Note:

When a billing job runs it automatically picks up usage information associated with contract line items if the billing type is "Recurring Variable" and the usage date is within the dates of the billing schedule being billed. See Creating Billing Jobs.