How invoicing works
Most billing system are batch oriented: invoice calculation occurs at certain specific times (often configurable), and the system goes through all accounts and generate the missing invoices. Arthera SMP, on the other hand, generates new invoices as soon as there is a change in the system that requires such a new invoice. This may occur, for example:
- when there is a change to a subscription (creation, change of plan, cancellation, etc.)
- when the system detects a recurring charge is due (e.g. monthly recurring subscriptions)
- when an operator creates an adjustment item: Credit or Charge
After an invoice has been generated, its balance is positive or zero. If it is positive, the customer owes money and needs to pay the balance. Each time an invoice would become negative, the system automatically inserts a special item, called credit balance adjustment (CBA), to bring the balance back to zero. That credit is automatically added to the account and used on future invoices. If the invoice is paid, a payment is added against that invoice. If the invoice is adjusted later on, a CBA item will be automatically generated and appear on the invoice.
Recurring invoice items start and end on the same day of the month. For example, a monthly subscription starting on the 21st will have items for the service period 21 Aug 2023 to 21 Sep 2023, 21 Sep 2023 to 21 Oct 2023, etc. Fixed items only have a start date and never get prorated.
Invoice and Customer Balance
The invoice balance is computed by adding all the charges, subtracting credits and adjustments, and then subtracting the amount paid. The account balance is the sum of all the invoice balances after subtracting any account credit. For example, if all invoices were fully paid, and if there was a $10 account credit, the account balance would be negative and equal to -$10.
Invoice Items
Fixed Items
An invoice for a subscription on a fixed phase of $0 (trial phase for example) would look like:
| Invoice # | Type | Description | Amount | Start Date |
|---|---|---|---|---|
| 1001 | Fixed | Single trial | 0$ | 10 Mar 2023 |
Recurring Items
An invoice for a subscription on a recurring phase of $20 would look like:
| Invoice # | Type | Description | Amount | Start Date |
|---|---|---|---|---|
| 1002 | Recurring | Standard monthly | 20$ | 10 Mar 2023 |
Plan Changes
In a case where invoicing occurs in advance, a user gets charged for the upcoming period. For instance a user that subscribed to a monthly plan on 2023-04-11, would get a first invoice, charging for that month. Assuming he paid his invoice, his balance is now 0. Let’s assume he decides to upgrade on 26 Apr 2023: Previous invoice:
| Invoice # | Type | Description | Amount | Start Date | End Date |
|---|---|---|---|---|---|
| 1003 | Recurring | Standard monthly | 20$ | 11 Apr 2023 | 11 May 2023 |
On the new invoice, the system will generate a REPAIR_ADJ item for the part of the subscription on the old plan that was not used, and a new RECURRING item for the new plan on the remaining period.
| Invoice # | Type | Description | Amount | Start Date | End Date |
|---|---|---|---|---|---|
| 1004 | Recurring | Pro monthly | 15$ | 26 Apr 2023 | 11 May 2023 |
| 1003 | REPAIR_ADJ | Standard monthly | -10$ | 26 Apr 2023 | 11 May 2023 |
Note that if the absolute value of the amount of the REPAIR_ADJ had been greater than the amount of the new RECURRING item, the system would have generated a CBA_ADJ item whose purpose would have been to bring the balance to 0, and provide the customer some credit that would have been used on subsequent invoices.
Invoice Item Adjustment
An invoice item adjustment would look like (assuming the invoice wasn't paid, otherwise a CBA_ADJ item would be added):
| Invoice # | Type | Description | Amount | Start Date | End Date |
|---|---|---|---|---|---|
| 1004 | Recurring | Pro monthly | 20$ | 26 Apr 2023 | 11 May 2023 |
| 1003 | ITEM_ADJ | -20$ | 28 Apr 2023 | 28 May 2023 |
Credit
Note that CREDIT_ADJ items are also used to represent credits created by the user via the SMP interface. In this case, a dummy invoice is created with a negative amount for the CREDIT_ADJ item. This makes the system generate a CBA_ADJ automatically, which in turn can be used as account credits. For example, here is how a $20 credit would be represented:
| Invoice # | Type | Description | Amount | Start Date | End Date |
|---|---|---|---|---|---|
| 1003 | CREDIT_ADJ | -20$ | 28 Apr 2023 | 28 May 2023 |
Invoice Previews
In some situations, it is necessary to preview what a given customer will be invoiced for at a given date or after making a subscription change. Arthera SMP provides preview invoices to accomplish this goal, and there are a few flavours for different use cases:
- Next upcoming invoice: When is the next upcoming invoice for a given customer, and what will this invoice contain (items, amount, date, ...) ?
- Next upcoming invoice associated with a given subscription: When is the next upcoming invoice for a given subscription, and what will this invoice contain (items, amount, date, ...)?
- Given a targetDate, what invoice will the system generate ?
- Subscription modification: Given a change in a subscription (new subscription, change of plan, cancellation, ...), what invoice will the system generate ?
You can generate a preview invoice from the Customer page in Arthera SMP.