Subscriptions

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The Subscriptions module allows you to charge periodic fees to your customers for using the service. If your advertisement states something like “only $9.99 per month, and just $0.99 extra per month for Voicemail service,” then two subscription plans are involved. The parameters you specify within a subscription plan affect the customer balance. Each subscription plan includes the following:

  • Name and description – Your administrators use this to better manage various subscription plans.
  • Subscription plan name visible to end user – This is a clear subscription name that is shown to end users on invoices and on their self-care interfaces.
  • Activation mode – This specifies when a subscription is active and when charges start. A subscription is typically activated upon its creation (or on the start date, if that is specified). PortaBilling supports an additional mode of subscription activation based on the account’s first use. You can avoid issues when there is a delay between the time a customer signs up for a service and the time they can actually use it (e.g., the customer uses online signup to purchase a residential SIP service, but their IP phone is not delivered by FedEx until five days later).
  • Minimum subscription period and early cancellation penalty – It is common practice to lock a customer’s contract for a certain period (e.g., if you provide the customer with a free IP phone, you want to make sure they continue paying monthly fees until the cost of the phone is paid back). If the subscription service is canceled earlier than the interval specified, the customer is charged a cancellation penalty.
  • Subscription fees – These are the charges applied while the customer has an active subscription; see below for more details.

Subscription fees

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When a customer’s billing period closes, PortaBilling calculates the charges for any subscriptions that were active during this period. For each subscription, there are three types of charges:

  • Activation fee
  • Cancellation fee
  • Periodic fee

Activation fee

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An activation fee automatically applies when a subscription start time begins, with one exception. Namely, in the subscription plan’s properties you may specify that the subscription plan will be active only when the account is used for the first time. In this case, the subscription is activated either on its start date or on the date of the account’s first use, whichever comes later.

Cancellation fee

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A subscription which is not yet active can simply be deleted (for instance, a customer signs up for a new service beginning next month, but then changes his mind). A subscription that is already active cannot be deleted (see the Applying subscriptions section for details). When a subscription is canceled, the cancellation date is entered as the finish date for the subscription and the customer is charged a cancellation penalty.

The cancellation date is typically the day on which cancellation takes place. However, you can also schedule a cancellation for a future date (e.g., a customer wishes to use the service until the end of the present month).

Subscription finish date

The record of the canceled subscription allows PortaBilling to correctly charge for closed subscriptions. For example, if a customer subscribes to the service on the 3rd and cancels it on the 7th, he is still charged for five days of service.

You can define the cancellation penalty as either a fixed amount or the remaining subscription charge. In the latter case, if the customer’s $5 subscription must be active for 10 months but they cancel it in six months, the customer’s cancellation penalty is $20, which is the sum of charges for the remaining four months.

Note that if you change the subscription fee (e.g., from $5 to $7) before a customer cancels their subscription, PortaBilling uses the new fee to charge the cancellation penalty. Thus, a customer from the example above is charged $28 ($7 * 4 months) as a cancellation penalty.

Periodic fee

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A periodic fee defines the recurring charges applied to a customer for service usage.

When a customer signs up for or cancels a subscription in the middle of a billing period, you can charge them either the prorated or full periodic fee. Thus, if a customer with a monthly billing period signs up for the subscription on March 17th, the charge can be either for 15 days in March (17th-31st) when the subscription is active or for the full month.

The following examples relate to the same subscription plan with a monthly periodic fee of $9.99, and illustrate how it is prorated:

  • Customer A, with a monthly billing period, activates the subscription on April 12th. On May 1st, the customer is charged $6.33 because they used the service for 19 days (April 12-30th) and 19 * ($9.99/30) = $6.33.
  • Customer B, also with a monthly billing period, activates the subscription on April 12th but cancels it on the 25th. On May 1st, the customer is charged $4.66 because they only used the service for 14 days (April 12-25th) and 14 * ($9.99/30) = $4.66.

These types of subscription fees are reflected on the invoice as extra invoice lines.

By default, the first and last partial billing periods are charged with a prorated fee. To charge for subscriptions in full, go to Subscription plans > Fees > Prorate fee for the partial billing period option > and clear the check boxes for the first/last billing period.

Choose whether or not to prorate recurring charges for subscriptions

Note that this option is available if you charge for subscriptions At the end of the billing period or In advance and is not available for Progressive (daily) subscriptions.

Also, if you set up the non-prorated (full) fee, still there may be credits issued for the days when a customer cannot use the service due to service suspension, block, having exceeded credit limit, etc. (credits are issued according to the Issue credits for the days when and Skip credits, charge in full options configuration).

The ability to set up the non-prorated (full) fee enables you to adjust subscriptions to your business requirements. For instance, you may want to balance the cost and revenue while you resell your partner’s services on a recurring fee basis.

Let’s consider an example company ABC, which offers IPTV services to end users for a monthly subscription fee. The IPTV vendor charges ABC in full even if their customer cancels the subscription. To avoid revenue leakage, the ABC company can also charge the customer in full for the last month of service usage.

Thus, when charging full fee for partial billing periods, you can ensure that the subscription charges cover the cost, no matter when the subscription is activated/canceled.

You can also modify the periodic fee for a subscription plan once it has been activated (e.g., you can decide to increase/decrease the price for a service).

If the charge for subscriptions is applied at the end of the billing period, the fee changes are applied immediately to the current billing period. All the charges for the following billing period will use the updated periodic fees.

If the charge for subscriptions is applied in advance, the fee changes have no influence on the billing periods that have already been charged for but are applied to each subsequent billing period. In other words, there is no recalculation. The charges for the next billing period use the updated periodic fees.

For example, if a subscription fee of $10 is charged one month in advance and the current monthly billing period ends on April 10th, the customer is charged until May 10th.

On April 25th, the subscription fee changes to $8. The customer’s invoice (produced on April 11th) contains the charges for all calls made before April 10th and the subscription charges covering the period from April 11th to May 10th without recalculations (i.e., the subscription charges are still $10 for this billing period despite any changes).

The new subscription fee ($8) is applied to the new billing period, which covers the period from May 11th to June 10th, and the customer continues to be charged $8 for each subsequent billing period.

Rounding

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You can choose what rounding method to apply to the charged amount for subscriptions in the customer class.

You can select one of the following rounding methods:

  • Away from zero – this rounding method is selected by default. It works similar to rounding up but differs when rounding negative values. Positive and negative values round symmetrically. For example, if the rounding precision is set to two decimals, then:
    • 1.214, 1.215 and 1.216 all round up to 1.22.
    • – 1.214, – 1.215 and – 1.216 all round to – 1.22.
  • Half away from zero – this rounding method works similar to arithmetic rounding but differs when rounding negative values. Positive and negative values round symmetrically. For example, if the rounding precision is set to two decimals, then:
    • 1.214 rounds to 1.21, 1.215 and 1.216 all round to 1.22.
    • – 1.214 rounds to – 1.21, – 1.215 and – 1.216 all round to – 1.22.
  • Special rounding (malaysian) – formerly known as custom rounding. This type of rounding depends on the last decimal at precision point. For example, if the rounding precision is set to two decimals, then:
    • If the last decimal at precision point is [0…2], it is set to zero. For example, 1.204, 1.215 and 1.226 all round to 1.20.
    • If the last decimal at precision point is [3…7], it is set to 5. For example, 1.234, 1.255 and 1.276 all round to 1.25.
    • If the last decimal at precision point is [8…9], it is set to 0 and the previous decimal increases by 1. For example, 1.284, 1.296 all round to 1.30. Choose rounding method

Also, you can choose the number of decimals to round the charged amount for a specific subscription plan in the Rounding precision option on the Fees panel.

Choose rounding precision

Periodic fees configuration

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Since your customers may have different billing periods, PortaBilling provides you with the flexibility to individually assign subscription costs for each period. For instance, if your monthly rate is $19.99, you may want to charge a higher weekly rate than $4.99, since the maintenance required by customers with shorter billing periods increases, and justifies a higher rate.

For instance, PortaBilling allows you to define your monthly rate as $19.99, your semimonthly rate as $10.99, your weekly rate as $6.99 and daily rate as $1.99 for the exact same subscription plan. PortaBilling will automatically use the correct base value according to the customer’s billing period.

Promotional periods

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Yet another common business practice is to offer special rates for an initial period following signup (e.g., “Only $9.99/month!”) while the disclaimer states: “For the first six months only, after which the standard rate of $29.99/month applies.” PortaBilling allows you to define an unlimited number of promotional periods, with different subscription fees for each. For example, you could create a subscription that offers free service for the first three months, a rate of $9.99 for the next nine months, and $12.99 thereafter; or something even more complex.

Incompletely used promotional periods

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A subscription’s promotional period includes each billing period during which a service is used, regardless of how many days the service is used in a particular billing period.

For example, let’s say you offer a promotional period for three months and your customer John Doe subscribes to it on July 15th. John Doe is charged for the second half of July (16 days) and for the following two months (August and September) according to the promotional rate. Starting from the fourth month (October), the default rate is used.

In order to avoid potential misunderstandings when a customer expects a longer promotional period (till October 15th from the example above), the best practice is to use an anniversary billing cycle, as this eliminates the problem of “incompletely used” promotional periods.

Applying subscriptions

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Since a product defines the way you provide a service to an end user, and subscriptions define charges for this service, it is obvious that they must be interconnected. That’s why subscriptions are usually included with products (they can be selected from the subscription list.) To define a flat rate for provided service(s) and avoid discrepancies between subscription plans with different configuration parameters, only one subscription plan per product (both main and add-on ones) is allowed.

Subscriptions that an account receives with the products requested are called obligatory subscriptions, because it is not possible to remove or cancel these subscriptions as long as the account uses these products. You may, however, add optional subscriptions to an account (e.g., if an EasyCall product user wishes to receive Voicemail service). These optional subscriptions can be added or canceled as you wish. Note that you can only apply the same subscription once to an account if it has not been explicitly defined in its configuration (see the Multiple subscriptions section for details).

You can also assign s