Recurring Charges

Overview

Recurring Charges assigned to Sales Contracts are used in the Recurring Billing functionality. They can be applied to the Sales Contract as a contract-wide charge or associated with the Covered Device/s (Shipped Item Warranty) for periodic billing. The association can be general or specific (all Covered Device records associated with the Contract, for a particular Product or Item, or individually by Item-Serial).

An example of a Recurring Service Charge would be a Monthly Rental charge. Once added to the Sales Contract or Covered Device/s, the charge would be captured in the Recurring Billing run and invoiced accordingly.

Application

Used to create Sales Contract Recurring Charges used in Recurring Billing runs.

Prerequisites

Product Master setup. Refer to the How to Create and Manage Recurring Services Products documentation for setup instructions.

Navigation

Sales Contract Maintenance

Processing
 

1. Navigate to the Sales Contract where the Recurring Charge is to be added.

2. Click on New Contract Recurring Charges button (a new window will appear) or click Edit to amend an existing Product.

3. Populate all fields as required and Save.

  NOTE  When Products for Purchases that are added to the Contract have Associated Recurring Charges, the Recurring Charge is automatically added and made Active.

  NOTE  If there is more than one Recurring Service Product associated with the Product selected as a Product for Purchase, the user must select which Recurring Service to use when adding the Product for Purchase.

Once a Recurring Charge record is saved, the following buttons will appear when in view mode:
 

• Sales Account Distribution:  If the revenue associated to the charge needs to be distributed across multiple Sales Accounts, the Sales Accounts can be defined here by clicking on the button and adding records as required. The total percentage cannot exceed 100% but can be less. If the distribution is not 100%, the undistributed portion will be assigned to the Revenue Account defined on the Contract Charge record.
• Date Effective Pricing:  Price amendments/changes within a Recurring Charge can be automated using the Date Effective Pricing functionality. Date Effective Pricing can be set up and maintained (within the Contract Term) as required, and the Recurring Billing Engine will bill the pricing as defined in the schedules.

  IMPORTANT  When Contract Periodic Billings are generated, all Contract Recurring Charges belonging to the Sales Contract will be applied, but the 'Periodic Billing Amount' field value on the Contract Periodic Billing will be calculated as mentioned below:

• If the Contract Periodic Billings are generated for a period for which a Date Effective Pricing record exists, the 'Periodic Billing Amount' will be derived from the 'Periodic Price' specified in that Date Effective Pricing record.
  'Periodic Billing Amount' will be derived from the 'Periodic Price' specified on the corresponding Contract Recurring Charge record.
• If the Contract Periodic Billings are generated for a period for which no Date Effective Pricing record exists, the

  EXAMPLE  Consider the user creates a Sales Contract with two Contract Recurring Charges (A and B) with three Date Effective Pricing records for each of those Contract Recurring Charges as mentioned below.

Field	Contract Recurring Charge A	Contract Recurring Charge B	Date Effective Pricing records
			First Effective Date	Last Effective Date
Periodic Price (on Contract Recurring Charge record)	20	100	N/A	N/A
Periodic Price (on Date Effective Pricing record)	30	200	01-02-2023	28-02-2023
Periodic Price (on Date Effective Pricing record)	40	300	01-03-2023	30-04-2023
Periodic Price (on Date Effective Pricing record)	50	400	14-08-2023	18-06-2024

When the user generates Recurring Billing for this Sales Contract, the system applies both Contract Recurring Charges, but the 'Periodic Billing Amount' is adjusted/calculated as mentioned below.

Scenarios	Billing Run Date	Periodic Billing Amount	Comments
1	20-01-2023	120 (20+100)	No Date Effective Pricing exists for the given period, so the system considers the price from the corresponding Contract Recurring Charge.
2	28-02-2023	230 (30+200)	First Date Effective Pricing record is applicable for the given period, so the system considers the price from that Date Effective Pricing Record.
3	19-04-2023	340 (40+300)	Second Date Effective Pricing record is applicable for the given period, so the system considers the price from that Date Effective Pricing Record.
4	10-06-2023	120 (20+100)	No Date Effective Pricing exists for the given period, so the system considers the price from the corresponding Contract Recurring Charge.
5	15-09-2023	450 (50+400)	Third Date Effective Pricing record is applicable for the given period, so the system considers the price from that Date Effective Pricing Record.

  NOTE  The user needs to create a single Contract Recurring Charge per Contract, if only one charge needs to be applied at a given time.
 

• Service Components:  Service Components as part of a Recurring Charge allow the Recurring Charge to detail Services provided as part of the charge.

• Service Charge Devices Quick Entry:  Service Charge Devices Quick Entry is used to efficiently associate all or particular Covered Devices (Shipped Item Warranty) records to the Recurring Charge.

• Charge Devices:  Charge Devices (Edit Charge Devices) provide the ability to amend a Recurring Charge against a Covered Device for a defined period.

Fields
 

Sales Contract:  The Sales Contract that this Recurring Charge is associated with.

Sequence:  A unique identifier for this specific Recurring Charge on the associated Sales Contract.

Recurring Charge Product:  A Rootstock Product where Product Type is Recurring Services.

Periodic Price:  The price per period (based on the Recurring Charge Product's UOM) to be charged for that period. The pricing engine initially sets price upon entering the Recurring Charge Product with any applicable price modification discounts applied, but this can be overridden.

Pricing Period Type:  This field is set based on the Sales UOM set on the Recurring Charge Product record and cannot be overridden. Valid values are:

• Monthly

• Quarterly

• Semi-Annual

• Annual

Billing Period Price:  The charge for the Billing Period defined (the charge per Billing Period).

Price From Components:  When checked, the price is calculated as the sum of the prices of Service Components that have been associated with the Recurring Charge Product (on Product Components tab), with any applicable price modification discounts applied.

  NOTE  Service Components may also be added/maintained manually to a given Contract Recurring Charge.

Number of Periods to Bill:  Value is defaulted based on the Contract Terms and the Pricing Period Type. For example, if the Contract Term is for 24 months and the Pricing Period Type is Monthly, the field is set to 24; if set to Quarterly, the field is set to 6. Once the field defaults, it can be overridden.

Number of Periods Billed (Automatically set – visible in View mode only):  Number of periods billed to date, automatically set once the Charge is billed via the Generate Recurring Billing function.

Apply Num of Billing Periods by Device:  When checked, the number of Billing Periods per device is applied.

Continue Billing When Term Expires:  When checked, the Recurring Charge will continue to be billed beyond the Contract Term.

Tax Amount: When a Recurring Charge is set as taxable, this is the Tax Amount to be applied.

Keep Billing Until Device is Deactivated:  Can only be set when 'Continue Billing When Term Expires' is checked. When checked, billing will continue until the device is terminated.

Charge Comments:  User-defined comments up to 100 characters in length.

Recurring Charge is Active:  When (and until) checked, the Recurring Charge can begin being billed.

Charge Application Method:  This is the method by which the Recurring Charge will be applied. Options are:

• Applies to All Serialized Devices:  Will apply to any serialized Product that ships against the given Contract.

• Applies to Specific Serialized Devices:  Only applies to a specific serialized Product that has shipped.

• Applies to Specific Product:  Applies to the ‘Product for Purchases’ Product the user selects from the ‘Covered Device Product’ field dropdown.

• Applies to Specific Item:  Applies to an Inventory Item that the user selects from the ‘Covered Device Inventory Item’ field dropdown. This would only apply in a specific case where a serialized component of a serialized parent item’s Work Order and a Warranty record has been created for said serialized component (and the Warranty record references the given Contract). 

• Once Per Contract Period:  Recurring Charge will only be billed once per Contract Period (and is not associated with the shipment of any type of Product).

Covered Device Product:  When the Charge Application Method is set to 'Applies to a Specific Product', this field is enabled, and a Product for Purchases must be selected.

Covered Device Product Group:  When the Charge Application Method is set to 'Ápplies to a Specific Product Group', this field is enabled, and a Product Group must be selected.

Covered Device Inventory Item:  When the Charge Application Method is set to 'Applies to a Specific Item', this field is enabled, and an Item (where a Warranty record exists against the given Contract) must be selected from the dropdown.

Revenue Account:  The Sales Account that will be debited for the given Recurring Charge. Value is initially defaulted from the Recurring Services Product record but can be overridden with any Sub Ledger Account with a GL Type of Revenue.

Early Termination Fee Pct.:  Fee percentage charged if Contract is terminated early by the Customer.

Do Not Prorate on Partial Period:  When checked, any billing run processed that is not a full period will not be prorated.

Taxable:  When checked, indicates that the given Recurring Charge is taxable.

Tax Rate:  When a Recurring Charge is set as taxable, this is the Tax Rate to be applied.

Tax Verified (Automatically set):  If using address/tax validation software (e.g., Avalara Tax), once verified, this field will be checked automatically.

  IMPORTANT 

When using dataloader to insert Contract Recurring Charges records, the tax values on each entry will be automatically updated from Avalara as long as:

• Both 'Enable Avalara Tax Calculation' and 'Auto-Fetch Order Line Tax' fields are checked on the SO Control GEO Service Tab tab for the Contract’s Division.

• The 'Tax Verified' field is unchecked on the Contract Recurring Charge at the time of insert.

A future process is now automatically created that will make a call to Avalara and update the Tax fields (Taxable, Tax Rate, Tax Verified and Tax Amount). This means:

• There might be a time gap between record insertion and Tax field updates.

• Due to Salesforce limitations, users should avoid inserting over 50 Contract Recurring Charges records simultaneously.

  NOTE  If the user needs to use custom picklist values (not being packaged from an ERP org) for the fields 'Pricing Period Type' and 'Charge Application Method', Application Setting(s) has to be created as follows:

• The name of the setting should start with 'allowpicklist_', then 'Field API Name' (excluding '__c').

• The values should be the API Names of the non-packaged picklist values (comma-separated).

  EXAMPLE  If the user needs to add new picklist values 'Once per Quarter' and 'Once per Year' for the field 'Charge Application Method', add a new Application Setting with the Name 'allowpicklist_soconrc_application' and Value as "Once per Quarter, Once per Year".

SEE ALSO
 

Sales Contracts Overview
Sales Contracts - System setup and related modules
Sales Contract Creation and Management
Sales Contract Device Deal Management