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Billing scenarios for one-time and recurring purchases in Cloud Solution Providers program (CSP) new commerce experience

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Appropriate roles: Admin agent | Billing admin | Helpdesk agent | Sales agent

Note

For a list of Cloud Solution Providers program (CSP) legacy billing scenarios, see Common billing scenarios for legacy CSP program partners working in Partner Center.

What is a new commerce billing cycle or billing period?

A new commerce billing cycle, or billing period, is one full calendar month. Your invoice cost depends on two factors: the billing term and the billing plan.

Billing term: The length of time you commit to a subscription. Billing plan: The payment schedule you choose.

You receive invoices and reconciliation data the following month, typically between the 6th and 8th. For example, for a billing period from January 1 to 31, expect your invoice and reconciliation data between February 6 and 8.

What is a new commerce charge cycle?

A new commerce charge cycle is the number of days you pay for a subscription. It's not the same as a billing period or a calendar month. The length of the charge cycle depends on how many days there are in the month when you buy, renew, or adjust your subscription.

For instance, if you bought an annual Microsoft Office subscription on February 21, 2022, with a monthly billing plan, your first charge cycle would run from February 21 to March 20, 2022. The charge cycle ends one day before the same date of the next month, year, or billing term, depending on your billing plan or frequency.

In this case, the first charge cycle is 28 days because February has 28 days (except in leap years). The second charge cycle is 31 days because March has 31 days, from March 21 to April 20. The third charge cycle is 30 days because April has 30 days, from April 21 to May 20. The recurring charge cycle always starts on the same day you bought or renewed your subscription.

Understanding your charge cycle helps you manage your subscription payments effectively. This consistency ensures that you're aware of your billing dates, making financial planning simpler and more predictable.

Tip

To end a subscription with another subscription or a calendar month, see align subscription end dates.

How are one-time and recurring charges calculated?

Important

To reconcile, include these billing details: Charge Start Date, Charge End Date, Effective Unit Price, Billable Quantity, Billing Frequency, Subscription Start Date, Subscription End Date, and Amount.

For more information, see CSP one-time purchase reconciliation file fields.

Effective billing reconciliation ensures accurate financial records and smooth management of your business subscriptions.

  • Maintain accuracy: Regularly check your billing statements to verify that all transactions match your records.
  • Identify discrepancies: Quickly spot any inconsistencies to address potential issues before they escalate.
  • Streamline processes: Implement efficient systems to automate and simplify your billing reconciliation tasks.

By focusing on these steps, you can improve your financial management and enhance your business operations.

Let's say, on June 18, 2020, you bought 10 monthly licenses of Microsoft 365 Business Standard subscription for a unit price of EUR 10.08. Your goal is to reconcile your charges in the billing period efficiently.

Here's how your June billing period reconciliation line items look when you receive them in July. It features a clear billing line item with all the purchase details.

This streamlined approach ensures accurate financial tracking and makes managing your subscriptions easier.

OrderDate ChargeStartDate ChargeEndDate ChargeType EffectiveUnitPrice BillableQuantity Total
June 18, 2021 June 18, 2021 July 17, 2021 new 10.08 10 100.8

When you renew your subscription, you see a new billing line item or transaction. This line item should have the ChargeType listed as "renew" and the ChargeStartDate as "July 18, 2021."

OrderDate ChargeStartDate ChargeEndDate ChargeType EffectiveUnitPrice BillableQuantity Total
July 18, 2021 July 18, 2021 August 17, 2021 renew 10.08 10 100.8

When you choose an annual subscription, you pay EUR 100.8 each month for a year, starting in July. From August onwards, these charges are marked with the ChargeType "cycleCharge."

OrderDate ChargeStartDate ChargeEndDate ChargeType EffectiveUnitPrice BillableQuantity Total
July 18, 2021 July 18, 2021 August 17, 2021 cycleCharge 10.08 10 100.8

When you prepay for your annual subscription, you see a single billing line item in your June reconciliation data.

OrderDate ChargeStartDate ChargeEndDate ChargeType EffectiveUnitPrice BillableQuantity Total
June 18, 2021 June 18, 2021 June 17, 2022 new 120.96 10 1,209.6

Your reconciliation data shows how much you're billed for your subscriptions. Clearly understanding these details helps you stay on top of your subscription costs and simplify your financial tracking.

Important

When you purchase Microsoft 365 E5, you get a comprehensive solution that covers both telecommunication and non-telecommunication services. To make billing clearer and more manageable, you see two separate line items or transactions in your reconciliation data: one for telecommunication charges and another for non-telecommunication charges. This distinction helps you better understand and track your charges and taxes, ensuring a smooth and transparent billing process.

How can I distinguish between one-time and recurring payments in the reconciliation data?

To effectively differentiate between one-time and recurring payments in the reconciliation data, follow these guidelines:

One-time or upfront payment:

  • Ensure that the ChargeStartDate and ChargeEndDate match the SubscriptionStartDate and SubscriptionEndDate.
  • Verify that the BillingFrequency is left blank.

Recurring payment or billing plan:

  • Check that the ChargeStartDate and ChargeEndDate are a month apart and confirm the BillingFrequency is "Monthly."
  • Alternatively, ensure the ChargeStartDate and ChargeEndDate are a year apart, with the BillingFrequency set to "Annual."

By following these steps, you should be able to clearly distinguish between one-time and recurring payments, ensuring accurate and efficient reconciliation.

How to calculate the costs of a product or subscription with both fixed fee and pay-as-you-go charges?

Maximizing the benefits of your subscription-based products is straightforward. Many products come with a fixed number of prepaid units and extra usage charged at a pay-as-you-go rate. For example:

  • With a Microsoft 365 subscription, you pay USD 10 per month for 100 minutes of calls. Any extra minutes cost 10 cents each.

  • With SendGrid, you pay USD 10 per month to send 100 emails. Extra emails cost 10 cents each.

To efficiently manage your subscription costs using daily rated usage and invoice reconciliation data, follow these steps:

  1. Understand daily charges: The BillingPreTaxTotal shows your daily pay-as-you-go charges. For instance, using 50 extra minutes at 10 cents per minute cost you USD 5 for that day.

  2. Verify charges: Compare your monthly pay-as-you-go charges shown in the invoice reconciliation data (Total) with your daily usage charges. For example, if you see USD 5 for 50 extra units (BillableQuantity), it matches your daily usage.

  3. Identify subscription costs: Your fixed monthly plan cost is shown in the Total, which should be USD 10 each month.

  4. Calculate total cost: Check the Product and SKU IDs in the invoice reconciliation data. Typically, you have line items for both fixed fees and pay-as-you-go costs. The combined total should be USD 15.

By following these steps, you can effectively manage and optimize your subscription expenses. This approach encourages smart usage and clear oversight of your costs.

How TO determine the product category

Here's how you can identify the product category in the reconciliation data. These methods are effective for most transactions, with occasional exceptions.

Condition Product Category
PublisherName says "Microsoft" or "Microsoft Corporation" Microsoft product
PublisherName isn't "Microsoft" or "Microsoft Corporation," and PublisherId isn't empty. Non-Microsoft or marketplace product
TermAndBillingCycle mentions "Reservation" Azure reservation
TermAndBillingCycle includes "Savings Plan" Azure savings plan
TermAndBillingCycle contains "one-month," "one-year," or "three-year" License-based. However, double-check to be sure.
TermAndBillingCycle mentions "Subscription"
If "Subscription" is missing, use the SKU name like "SQL Server" or "Windows Server."		 Software subscription
TermAndBillingCycle is blank, and ChargeEndDate is empty Perpetual software
SubscriptionDescription says "Azure plan" Azure plan
For all remaining conditions Use "Azure plan" as the name for the remaining product category. Feel free to customize each subscription name as needed. Ensure nothing is missing.

These guidelines should help you efficiently categorize your products, making your reconciliation process smoother and more accurate.

How to find the billing term and billing plan in reconciliation data

TermAndBillingCycle can vary depending on the subscription's billing term and billing plan, and there's no standardized text to describe them.

The billing term is the duration of your subscription, which spans from the SubscriptionStartDate to the SubscriptionEndDate.

The billing plan refers to how often you're billed, covering the period between the ChargeStartDate and the ChargeEndDate. While BillingFrequency often indicates the billing plan, it's crucial to verify these dates for accuracy.

Here are some examples to clarify:

TermAndBillingCycle SubscriptionStartDate SubscriptionEndDate ChargeStartDate ChargeEndDate BillingFrequency
One-month commitment for monthly billing May 25, 2021 June 24, 2021 May 25, 2021 June 24, 2021
One-year commitment for monthly/yearly billing May 25, 2021 May 24, 2022 May 25, 2021 June 24, 2021 Monthly
One-year term duration May 25, 2021 May 24, 2022 May 25, 2021 May 24, 2022
Three-year commitment for monthly/yearly billing May 25, 2021 May 24, 2024 May 25, 2021 June 24, 2021 Monthly
Three-year commitment for monthly/yearly billing May 25, 2021 May 24, 2024 May 25, 2021 May 24, 2022 Annual
Three-year commitment for monthly/yearly billing May 25, 2021 May 24, 2024 May 25, 2021 May 24, 2024

By understanding these terms, you can better manage your subscriptions and charge cycles. This knowledge empowers you to keep track of your payments, ensuring that you're always aware of upcoming charges and can avoid any confusion related to your billing statements.

Monthly term subscription expiration dates on special cases

Here's when monthly subscriptions expire when you buy near the end of a month:

When you buy on the last day of a month

If you buy a monthly subscription on the last day of a month, your subscription and charge end one day before the same date in the following month.

For example:

  • If the next month has 31 days, your subscription ends on the 30th day.
  • If the next month has 30 days, your subscription ends on the 29th day.
  • If the next month is February in a nonleap year, your subscription ends on the 27th day.
  • If the next month is February in a leap year, your subscription ends on the 28th day.

Note

Each item is independent, and dates are in Coordinated Universal Time (UTC). Subscription charges start on the last day of each month and end one day before that date in the following month.

Reconciliation line items of a monthly subscription:

BillingTerm OrderDate ChargeType SubscriptionStartDate SubscriptionEndDate RenewDate ChargeStartDate ChargeEndDate
Monthly January 31, 2021 new January 31, 2021 February 27, 2021 February 28, 2021 January 31, 2021 February 27, 2021
Monthly January 31, 2021 new January 31, 2021 February 27, 2021 February 28, 2021 January 31, 2021 February 27, 2021
Monthly February 28, 2021 new February 28, 2021 March 27, 2021 March 28, 2021 February 28, 2021 March 27, 2021
Monthly May 31, 2021 new May 31, 2021 June 29, 2021 June 30, 2021 May 31, 2021 June 29, 2021
Monthly June 30, 2021 new June 30, 2021 July 29, 2021 July 30, 2021 June 30, 2021 July 29, 2021
Monthly July 31, 2021 new July 31, 2021 August 30, 2021 August 31, 2021 July 31, 2021 August 30, 2021

Reconciliation line items of an annual subscription with a monthly billing plan:

BillingTerm BillingPlan OrderDate ChargeType SubscriptionStartDate SubscriptionEndDate RenewDate ChargeStartDate ChargeEndDate
Annual Monthly January 31, 2021 new January 31, 2021 January 30, 2022 January 31, 2022 January 31, 2021 February 27, 2021
Annual Monthly February 28, 2021 cycleCharge January 31, 2021 January 30, 2022 January 31, 2022 February 28, 2021 March 30, 2021
Annual Monthly March 31, 2021 cycleCharge January 31, 2021 January 30, 2022 January 31, 2022 March 31, 2021 April 29, 2021
Annual Monthly April 30, 2021 cycleCharge January 31, 2021 January 30, 2022 January 31, 2022 April 30, 2021 May 30, 2021
Annual Monthly May 31, 2021 cycleCharge January 31, 2021 January 30, 2022 January 31, 2022 May 31, 2021 June 29, 2021
Annual Monthly June 30, 2021 cycleCharge January 31, 2021 January 30, 2022 January 31, 2022 June 30, 2021 July 30, 2021
Annual Monthly July 31, 2021 cycleCharge January 31, 2021 January 30, 2022 January 31, 2022 July 31, 2021 August 30, 2021
Annual Monthly August 31, 2021 cycleCharge January 31, 2021 January 30, 2022 January 31, 2022 August 31, 2021 September 29, 2021
Annual Monthly September 30, 2021 cycleCharge January 31, 2021 January 30, 2022 January 31, 2022 September 30, 2021 October 30, 2021
Annual Monthly October 31, 2021 cycleCharge January 31, 2021 January 30, 2022 January 31, 2022 October 31, 2021 November 29, 2021
Annual Monthly November 30, 2021 cycleCharge January 31, 2021 January 30, 2022 January 31, 2022 November 30, 2021 December 30, 2021
Annual Monthly December 31, 2021 cycleCharge January 31, 2021 January 30, 2022 January 31, 2022 December 31, 2021 January 30, 2022

When you buy on the day before the last day of a month

If you buy a monthly subscription on the day before the last day of a month, your subscription and charge end two days before the same date in the following month.

For example:

  • If the next month has 31 days, your subscription ends on the 29th day.
  • If the next month has 30 days, your subscription ends on the 28th day.
  • If the next month is February in a nonleap year, your subscription ends on the 26th day.
  • If the next month is February in a leap year, your subscription ends on the 27th day.

Note

Each item is independent, and dates are in Coordinated Universal Time (UTC). Subscription charges start on the last day of each month and end one day before that date in the following month.

Reconciliation line items of a monthly subscription:

BillingTerm OrderDate ChargeType SubscriptionStartDate SubscriptionEndDate RenewDate ChargeStartDate ChargeEndDate
Monthly January 30, 2021 new January 30, 2021 February 26, 2021 February 27, 2021 January 30, 2021 February 26, 2021
Monthly February 27, 2021 new February 27, 2021 March 29, 2021 March 30, 2021 February 27, 2021 March 29, 2021
Monthly May 30, 2021 new May 30, 2021 June 29, 2021 June 30, 2021 May 30, 2021 June 29, 2021
Monthly June 29, 2021 new June 29, 2021 July 28, 2021 July 29, 2021 June 29, 2021 July 28, 2021
Monthly July 30, 2021 new July 30, 2021 August 29, 2021 August 30, 2021 July 30, 2021 August 29, 2021

Reconciliation line items of an annual subscription with a monthly billing plan:

BillingTerm BillingPlan OrderDate ChargeType SubscriptionStartDate SubscriptionEndDate RenewDate ChargeStartDate ChargeEndDate
Annual Monthly January 30, 2021 new January 30, 2021 January 29, 2022 January 30, 2022 January 30, 2021 February 27, 2021
Annual Monthly February 28, 2021 cycleCharge January 30, 2021 January 29, 2022 January 30, 2022 February 28, 2021 March 29, 2021
Annual Monthly March 30, 2021 cycleCharge January 30, 2021 January 29, 2022 January 30, 2022 March 30, 2021 April 29, 2021
Annual Monthly April 30, 2021 cycleCharge January 30, 2021 January 29, 2022 January 30, 2022 April 30, 2021 May 29, 2021
Annual Monthly May 30, 2021 cycleCharge January 30, 2021 January 29, 2022 January 30, 2022 May 30, 2021 June 29, 2021
Annual Monthly June 30, 2021 cycleCharge January 30, 2021 January 29, 2022 January 30, 2022 June 30, 2021 July 29, 2021
Annual Monthly July 30, 2021 cycleCharge January 30, 2021 January 29, 2022 January 30, 2022 July 30, 2021 August 29, 2021
Annual Monthly August 30, 2021 cycleCharge January 30, 2021 January 29, 2022 January 30, 2022 August 30, 2021 September 29, 2021
Annual Monthly September 30, 2021 cycleCharge January 30, 2021 January 29, 2022 January 30, 2022 September 30, 2021 October 29, 2021
Annual Monthly October 30, 2021 cycleCharge January 30, 2021 January 29, 2022 January 30, 2022 October 30, 2021 November 29, 2021
Annual Monthly November 30, 2021 cycleCharge January 30, 2021 January 29, 2022 January 30, 2022 November 30, 2021 December 29, 2021
Annual Monthly December 30, 2021 cycleCharge January 30, 2021 January 29, 2022 January 30, 2022 December 30, 2021 January 29, 2022

How are licenses added or removed?

Learn how we adjust charges for license-based products when you update the license count, including prorated charges and refunds.

Add licenses

Let's say you bought 10 licenses of a monthly "Microsoft 365 Business Standard" subscription on June 18, 2021. Each license costs EUR 10.08. On June 20, you added two more licenses.

Reconciliation line items for the June billing period:

OrderDate ChargeType UnitPrice ChargeStartDate ChargeEndDate EffectiveUnitPrice BillableQuantity Total
June 18, 2021 new 10.08 June 18, 2021 July 17, 2021 10.08 10 100.8
June 20, 2021 addQuantity 10.08 June 20, 2021 July 17, 2021 –9.408 10 –94.08
June 20, 2021 addQuantity 10.08 June 20, 2021 July 17, 2021 9.408 12 112.89

To change the number of licenses, we follow two sequential steps at once:

  • Refund (Wipe): we refund current number of licenses from the change date until the end of the charge cycle.
  • Charge (Recreate): we charge for the new number of licenses for the same duration.

The EffectiveUnitPrice is calculated after adjustments. While discounts may apply, they aren't included here for simplicity.

Formula: EffectiveUnitPrice = UnitPrice / days in the charge cycle * billing days.

Billing days are counted from when an event occurs until the charge cycle ends.

Note

Effective unit price varies based on the number of days in a billing month, which directly impacts the calculation. For example, June has 30 days and August has 31 days. Annual billing is fixed at 365 days, except in leap years when it adds one extra day.

Example breakdown

  • In this example, the first reconciliation line item is an EUR 100.8 charge for using 10 licenses from June 18 to July 17, or 30 days. The unit price of each license is EUR 10.08. The EffectiveUnitPrice and UnitPrice are the same when the charge cycle has the same number of days as the billable days.

    • Total (Charge) = EffectiveUnitPrice (10.08) * BillableQuantity (10) = 100.8.

  • The second reconciliation line item is a refund of EUR 94.08 for 10 licenses not used for 28 days from June 20 to July 17. The EffectiveUnitPrice is adjusted based on the billable days.

    • Total (Refund) = EffectiveUnitPrice (10.08 / 30 * 28) * BillableQuantity (10) = 94.08.

  • The third reconciliation line item is a charge of EUR 112.89 for 12 licenses used for 28 days from June 20 to July 17. The EffectiveUnitPrice is adjusted based on the billable days.

    • Total (Charge) = EffectiveUnitPrice (10.08 / 30 * 28) * BillableQuantity (12) = 112.89.

The final amounts might vary when taxes and exchange rates are applied, potentially increasing or decreasing the total charges and refunds.

Remove licenses

If you removed four licenses on June 20, we adjust the charges accordingly.

Reconciliation line items for June billing period after removing the licenses:

OrderDate ChargeType UnitPrice ChargeStartDate ChargeEndDate EffectiveUnitPrice BillableQuantity Total
June 20, 2021 removeQuantity 10.08 June 20, 2021 July 17, 2021 –9.408 12 –112.89
June 20, 2021 removeQuantity 10.08 June 20, 2021 July 17, 2021 9.408 8 75.26

Example breakdown

  • The first reconciliation line item is a refund of EUR 112.89 for 12 licenses not used for 28 days from June 20 to July 17. The EffectiveUnitPrice is adjusted based on the billable days.

    • Total (Refund) = EffectiveUnitPrice (10.08 / 30 * 28) * BillableQuantity (12) = 112.89.

  • The second reconciliation line item is an EUR 75.26 charge for eight licenses used for 28 days from June 20 to July 17. The EffectiveUnitPrice is adjusted based on the billable days.

    • Total (Charge) = EffectiveUnitPrice (10.08 / 30 * 28) * BillableQuantity (8) = 75.26.

The final amounts might vary when taxes and exchange rates are applied, potentially increasing or decreasing the total charges and refunds.

How are the refunds calculated when I cancel a subscription?

Let's assume, you bought 10 licenses of a monthly "Microsoft 365 Business Standard" subscription on July 15, 2021, and canceled it on July 17. Each license costs EUR 10.08.

Reconciliation line items for the July billing period after cancellation:

OrderDate ChargeType UnitPrice ChargeStartDate ChargeEndDate EffectiveUnitPrice BillableQuantity Total
July 15, 2021 new 10.08 July 15, 2021 August 14, 2021 10.08 10 100.8
July 17, 2021 cancelImmediate 10.08 July 17, 2021 August 14, 2021 –9.42 10 –94.2

Example breakdown

  • The first reconciliation line item shows a charge of EUR 100.8 for 10 licenses used from July 15 to August 14 for 31 days. The price per license is EUR 10.08. The EffectiveUnitPrice and UnitPrice are the same when the charge cycle matches the billable days.

    • Total (Charge) = EffectiveUnitPrice (10.08) * BillableQuantity (10) = 100.8.

  • The second reconciliation line item shows a refund of EUR 94.2 for 10 licenses unused from July 17 to August 14 for 29 days. The EffectiveUnitPrice is prorated based on the billable days.

    • Total (Refund) = EffectiveUnitPrice (10.08 / 31 * 29) * BillableQuantity (10) = 94.2.

The final amounts might vary when taxes and exchange rates are applied, potentially increasing or decreasing the total charges and refunds.

Tip

To ensure a full refund, cancel your subscription within 24 hours of purchase or renewal. If you cancel after 24 hours but within seven days, you still receive a prorated refund based on your usage. You only pay for what you use up to that point.

Important

If you don't cancel within seven days, you aren't eligible for a refund and are charged for the entire subscription term, even if you don't use the product. For more information, see the new commerce cancellation policy.

You have two options to upgrade your subscription:

  • Full upgrade: Switch all licenses of a subscription to a more advanced one.
  • Partial upgrade: Switch only some of the licenses of a subscription to a more advanced one.

Full upgrade

Let's say, you bought 300 licenses of a monthly "Microsoft 365 Business Standard" subscription on June 18 for your customer Contoso. Each license costs EUR 10.08. On June 25, you upgraded the subscription to "Office 365 E1," as per Contoso's request. The new subscription's price for each license is EUR 6.43.

We charge you only for the new subscription from the day you upgrade. For example, if you upgrade on June 25, you're billed for the new subscription from that date onwards. You don't pay for the base subscription after upgrading, and we refund any amounts already charged. You pay for what you use, and this method ensures accurate and transparent billing.

Reconciliation line items for June billing period after upgrade:

OrderDate ProductName ChargeType UnitPrice ChargeStartDate ChargeEndDate EffectiveUnitPrice BillableQuantity Total SubscriptionId ReferenceId
June 18, 2021 Microsoft 365 Business Standard new 10.08 June 18, 2021 July 17, 2021 10.08 300 3024 284b0ff0-0e74-4f65-cb23-f8ad95867994 7d71c595-4635-40d1-a9e2-b34e63b01764
June 25, 2021 Microsoft 365 Business Standard convert 10.08 June 25, 2021 July 17, 2021 –7.72 300 –2316 284b0ff0-0e74-4f65-cb23-f8ad95867994 12d33e18-061e-4040-ad77-fcd77c1a9943
June 25, 2021 Office 365 E1 convert 6.43 June 25, 2021 July 17, 2021 4.92 300 1476 284b0ff0-0e74-4f65-cb23-f8ad95867994 12d33e18-061e-4040-ad77-fcd77c1a9943

Example breakdown

The EffectiveUnitPrice is your price after adjustments. While you might also get discounts, we didn't include them here for simplicity.

Formula: EffectiveUnitPrice = UnitPrice / days in the charge cycle * billing days. Billing days are counted from when an event occurs until the charge cycle ends.

  • The first reconciliation line item is a charge of EUR 3,024 for the "Microsoft 365 Business Standard" subscription used for the whole month from June 18 to July 17. The unit price of a license is EUR 10.08. The EffectiveUnitPrice and UnitPrice are the same when the charge cycle has the same number of days as the billable days.

    • Total (Charge) = EffectiveUnitPrice (10.08) * BillableQuantity (300) = 3,024.

  • The second reconciliation line item is a refund of EUR 2,316 for the same subscription unused from June 25 to July 17 for 23 days. The EffectiveUnitPrice is prorated based on the billable days.

    • Total (Refund) = EffectiveUnitPrice (10.08 / 30 * 23) * BillableQuantity (300) = 2,316.

  • The third reconciliation line item is a charge of EUR 1,476 for the new subscription used from June 25 to July 17 for 23 days. The EffectiveUnitPrice is prorated based on the billable days.

    • Total (Charge) = EffectiveUnitPrice (6.43 / 30 * 23) * BillableQuantity (300) = 1,476.

The final amounts might vary when taxes and exchange rates are applied, potentially increasing or decreasing the total charges and refunds.

Note

To upgrade to a new advanced subscription, we use charge type "convert." If you already have an advanced subscription, we use charge type "moveQuantity."

Partial upgrade

Let's say, you bought 300 licenses of a monthly "Microsoft 365 Business Standard" subscription on June 18 for your customer Contoso. Each license costs EUR 10.08. On June 25, you upgraded 100 licenses of the subscription to "Office 365 E1," as per Contoso's request. The new subscription's price for each license is EUR 6.43.

We charge you only for the new subscription from the day you upgrade. You don't pay for the licenses of base subscription that you upgraded, and we refund any amounts that we already charged. You pay for what you use, and this method ensures accurate and transparent billing.

Reconciliation line items for June billing period after upgrade:

OrderDate ProductName ChargeType UnitPrice ChargeStartDate ChargeEndDate EffectiveUnitPrice BillableQuantity Total SubscriptionId ReferenceId
June 18, 2021 Microsoft 365 Business Standard new 10.08 June 18, 2021 July 17, 2021 10.08 300 3024 284b0ff0-0e74-4f65-cb23-f8ad95867994 7d71c595-4635-40d1-a9e2-b34e63b01764
June 25, 2021 Microsoft 365 Business Standard convert 10.08 June 25, 2021 July 17, 2021 –7.72 100 -772 284b0ff0-0e74-4f65-cb23-f8ad95867994 12d33e18-061e-4040-ad77-fcd77c1a9943
June 25, 2021 Office 365 E1 convert 6.43 June 25, 2021 July 17, 2021 4.92 100 492 6759acd5-a8a9-4402-94b7-803baa64a78e 12d33e18-061e-4040-ad77-fcd77c1a9943

Example breakdown

The EffectiveUnitPrice is your price after adjustments. While you might also get discounts, we didn't include them here for simplicity.

Formula: EffectiveUnitPrice = UnitPrice / days in the charge cycle * billing days. Billing days are counted from when an event occurs until the charge cycle ends.

  • The first reconciliation line item is a charge of EUR 3,024 for the "Microsoft 365 Business Standard" subscription used for the whole month from June 18 to July 17. Each license costs EUR 10.08. The EffectiveUnitPrice and UnitPrice are the same when the charge cycle has the same number of days as the billable days.

    • Total (Charge) = EffectiveUnitPrice (10.08) * BillableQuantity (300) = 3,024.

  • The second reconciliation line item is a refund of EUR 772 refund for 100 licenses of the base subscription unused from June 25 to July 17 for 23 days . The EffectiveUnitPrice is prorated based on the billable days.

    • Total (Refund) = EffectiveUnitPrice (10.08 / 30 * 23) * BillableQuantity (100) = 772.

  • The third reconciliation line item is a charge of EUR 492 for the upgraded subscription used from June 25 to July 17 for 23 days. The EffectiveUnitPrice is prorated based on the billable days.

    • Total (Charge) = EffectiveUnitPrice (6.43 / 30 * 23) * BillableQuantity (100) = 492.

The final amounts might vary when taxes and exchange rates are applied, potentially increasing or decreasing the total charges and refunds.

Note

When an upgrade occurs, the negative charge or refund adjusts the cost for the remaining days in the charge cycle by prorating the rest of the cycle.

Note

To upgrade to a new advanced subscription, we use ChargeType "convert." If you already have an advanced subscription, we use ChargeType "moveQuantity."

To verify the transactions or billing line items for your subscription upgrade, you need two IDs: SubscriptionId and ReferenceId. First, find the ReferenceId that matches your base SubscriptionId. Then use the ReferenceId to link all the related transactions or billing line items.

How do I reconcile after I convert a trial version to a paid subscription?

Suppose you started a free trial for 25 "Dynamics 365 Guides" licenses on June 25, 2021. The trial lasts for one month, ending on July 25, 2021, but you can switch to a paid version at any time during or after the trial.

Reconciliation line items for the June billing period after switching to paid subscription:

OrderDate ChargeType UnitPrice ChargeStartDate ChargeEndDate EffectiveUnitPrice BillableQuantity ProductQualifiers Total
June 25, 2021 new 0 June 25, 2021 July 24, 2021 0 25 ["Trial"] 0
June 25, 2021 convert 0 June 25, 2021 July 24, 2021 0 25 ["Trial"] 0
June 25, 2021 convert 52.61 June 25, 2021 July 24, 2021 52.61 25 1,315.25

Example breakdown

  1. Initial trial purchase: The first reconciliation line item reflects the purchase of the free trial subscription, which has no cost. Verify the Total (costs) and the ProductQualifiers.

  2. Upgrade to paid version: The second reconciliation line item shows the trial subscription being canceled and upgraded to the paid version on the same day.

  3. Paid subscription charge: The third reconciliation line item indicates a charge of EUR 1,315.25 for the paid subscription from June 25, 2021, to July 24, 2021, covering a total of 30 days.

    • Total (Charge) = EffectiveUnitPrice (52.61 / 30 * 30) * BillableQuantity (25) = 1,315.25.

The final amounts might vary when taxes and exchange rates are applied, potentially increasing or decreasing the total charges and refunds.

By following this guide, you can clearly understand and manage your subscription billing after switching to paid version from trial.

Determining the total number of licenses after adjustments

Let's imagine, you initially purchased 10 licenses of an annual "Microsoft 365 Business Standard" subscription with a monthly billing plan for your customer Contoso on March 5, 2022. Throughout the billing period, you made several changes to the license count based on their team size and project requirements.

  • Added 5 licenses on March 7 and 10 more on March 10.

  • Removed two licenses on March 12 and three on March 14.

  • Added 10 licenses on March 25.

  • Upgraded five licenses to Office 365 E1 on March 27.

To find out the total licenses for the billing period, follow these steps:

  1. Identify the transaction or line item where ChargeType is "new," and ProductName or SkuName matches "Microsoft 365 Business Standard." If you changed licenses after the first billing period, look for "cycleCharge" or "renew" ChargeType.

  2. Note the OrderDate and SubscriptionId of that transaction or line item you found in step 1.

  3. Sum the BillableQuantity of all charge types with a positive EffectiveUnitPrice from the order date onwards for the SubscriptionId.

  4. Sum the BillableQuantity of all charge types (except customerCredit) with a negative EffectiveUnitPrice from the order date onwards for the same SubscriptionId.

  5. Calculate Total licenses = (Sum of the quantities from step 3) - (Sum of the quantities from step 4).

By following these steps, you have a clear understanding of your billing and the number of licenses you're charged for. This approach ensures transparency and helps you manage your subscriptions effectively.

Note

This method is for subscriptions on a monthly billing plan. For annual or one-time billed subscriptions, review each line item when changes occur.

Reconciliation line items in the March billing period after adjusting the license count:

OrderDate ProductName ChargeType UnitPrice BillableQuantity EffectiveUnitPrice Total SubscriptionId ChargeStartDate ChargeEndDate ReferenceId
March 5, 2022 Microsoft 365 Business Standard new 12 10 12.00 120 284b0ff0-0e74-4f65-cb23-f8ad95867994 March 5, 2022 April 4, 2022 7d71c595-4635-40d1-a9e2-b34e63b01764
March 7, 2022 Microsoft 365 Business Standard addQuantity 12 10 –11.23 –112.25 284b0ff0-0e74-4f65-cb23-f8ad95867994 March 7, 2022 April 4, 2022 12d33e18-061e-4040-ad77-fcd77c1a9943
March 7, 2022 Microsoft 365 Business Standard addQuantity 12 15 11.23 168.38 284b0ff0-0e74-4f65-cb23-f8ad95867994 March 7, 2022 April 4, 2022 12d33e18-061e-4040-ad77-fcd77c1a9943
March 10, 2022 Microsoft 365 Business Standard addQuantity 12 15 –10.06 –150.96 284b0ff0-0e74-4f65-cb23-f8ad95867994 March 10, 2022 April 4, 2022 dc2a0a41-6a51-4837-8956-af5ffd92b094
March 10, 2022 Microsoft 365 Business Standard addQuantity 12 25 10.06 251.61 284b0ff0-0e74-4f65-cb23-f8ad95867994 March 10, 2022 April 4, 2022 dc2a0a41-6a51-4837-8956-af5ffd92b094
March 12, 2022 Microsoft 365 Business Standard removeQuantity 12 25 –9.29 –232.25 284b0ff0-0e74-4f65-cb23-f8ad95867994 March 12, 2022 April 4, 2022 2f8965ff-512b-4233-9a74-1f54a6ad71d0
March 12, 2022 Microsoft 365 Business Standard removeQuantity 12 23 9.29 213.67 284b0ff0-0e74-4f65-cb23-f8ad95867994 March 12, 2022 April 4, 2022 2f8965ff-512b-4233-9a74-1f54a6ad71d0
March 14, 2022 Microsoft 365 Business Standard removeQuantity 12 23 –8.52 –195.87 284b0ff0-0e74-4f65-cb23-f8ad95867994 March 14, 2022 April 4, 2022 73b3dc36-f36d-4bbf-af8f-30c9b73ac4f6
March 14, 2022 Microsoft 365 Business Standard removeQuantity 12 20 8.52 170.32 284b0ff0-0e74-4f65-cb23-f8ad95867994 March 14, 2022 April 4, 2022 73b3dc36-f36d-4bbf-af8f-30c9b73ac4f6
March 25, 2022 Microsoft 365 Business Standard addQuantity 12 20 –4.26 –85.16 284b0ff0-0e74-4f65-cb23-f8ad95867994 March 25, 2022 April 4, 2022 6759acd5-a8a9-4402-94b7-803baa64a78e
March 25, 2022 Microsoft 365 Business Standard addQuantity 12 30 4.26 127.74 284b0ff0-0e74-4f65-cb23-f8ad95867994 March 25, 2022 April 4, 2022 6759acd5-a8a9-4402-94b7-803baa64a78e
March 27, 2022 Microsoft 365 Business Standard convert 12 5 –3.48 –17.4 284b0ff0-0e74-4f65-cb23-f8ad95867994 March 27, 2022 April 4, 2022 a11af6ef-8523-4eba-b1fa-fe5069dedea7
March 27, 2022 Office 365 E1 convert 10 5 2.90 14.50 c30e1e5c-a20f-4640-83d1-1f7a3e664b43 March 27, 2022 April 4, 2022 a11af6ef-8523-4eba-b1fa-fe5069dedea7

How to reconcile transactions after changing billing plans

You can switch your billing plan after the first charge cycle ends. For instance, if you initially opted for yearly payments, you could change to monthly payments after one year, at the end of the first charge cycle or the first year.

For example, if you purchased 10 licenses of a three-year "Dynamics 365 Commerce" subscription on September 20, 2021, with an annual billing plan, you could switch to monthly billing plan on September 20, 2022. The next month, your bill would show the monthly charge and mark it as "convert" for ChargeType.

Note

Switching your billing plan only changes the billing frequency and amount for the charge cycle, not the subscription start and end dates.

Reconciliation line items when you switch from annual to monthly billing plan:

ChargeType BillableQuantity UnitPrice EffectiveUnitPrice Total ChargeStartDate ChargeEndDate BillingFrequency
new 10 250 250 2,500 September 20, 2021 September 19, 2022 Annual
convert 10 20 20 200 September 20, 2022 October 19, 2022 Monthly

Reconciliation line items when you switch from monthly to annual billing plan:

ChargeType BillableQuantity UnitPrice EffectiveUnitPrice Total ChargeStartDate ChargeEndDate BillingFrequency
new 10 20 20 200 September 20, 2021 October 19, 2021 Monthly
convert 10 250 229.16 2291.6 October 20, 2021 September 19, 2022 Annual

How do I validate charges in legacy and new commerce reconciliation data after migrating to new commerce?

When you switch from legacy to a new commerce subscription within a billing period, you receive two invoices.

First, you get a refund for the amount paid in advance. Rest assured; your service remains uninterrupted after migration.

To clarify this process, let's break down an example:

Suppose you purchased one license of an annual Microsoft Office 365 E3 legacy subscription on July 21, 2021, with a monthly billing plan. On January 24, 2022, you migrated to a corresponding new commerce subscription with the same billing term and billing plan.

Here's how the billing works:

  • The legacy invoice covers charges up to and including January 23, 2022.
  • From January 24, 2022, onward, your new commerce subscription charges appear on the new commerce invoice.

Important details

Number of licenses: One

Monthly unit price of a license: USD 16

Legacy billing anniversary date: 21st day of each month

This streamlined approach ensures clarity and continuity in your billing, making your migration as smooth as possible.

Legacy license-based invoice reconciliation line items of January 2022 billing period:

ProductName ChargeType UnitPrice SubscriptionStartDate SubscriptionEndDate BillingFrequency ChargeStartDate ChargeEndDate
Microsoft Office 365 E3 Prorate fees when purchase 16 July 21, 2021 July 2, 2022 Monthly January 2, 2022 February 20, 2022

Legacy license-based invoice reconciliation line items of February 2022 billing period:

ProductName ChargeType UnitPrice SubscriptionStartDate SubscriptionEndDate BillingFrequency ChargeStartDate ChargeEndDate
Microsoft Office 365 E3 Prorate fees when purchase 16 July 21, 2021 July 21/2022 Monthly February 21/2022 March 20, 2022
Microsoft Office 365 E3 Cancel fee -16 July 21, 2021 July 21/2022 Monthly February 21/2022 March 20, 2022
Microsoft Office 365 E3 Cancel fee -13.93 July 21, 2021 July 21/2022 Monthly January 25, 2022 February 20, 2022

New commerce invoice reconciliation line items of January 2022 billing period:

For the January billing period, charges are divided between legacy and new commerce invoices on a prorated basis.

ProductName ChargeType UnitPrice EffectiveUnitPrice SubscriptionStartDate SubscriptionEndDate BillingFrequency ChargeStartDate ChargeEndDate
Microsoft Office 365 E3 new 16 13.93 January 25, 2022 July 20, 2022 Monthly January 25, 2022 February 20, 2022

Here's how your bill changes if you switch to an annual billing plan:

New commerce invoice reconciliation line items of January 2022 billing period:

ProductName ChargeType UnitPrice EffectiveUnitPrice SubscriptionStartDate SubscriptionEndDate BillingFrequency ChargeStartDate ChargeEndDate
Microsoft Office 365 E3 new 192 93.10 January 25, 2022 July 20, 2022 January 25, 2022 July 20, 2022

When you switch to a new annual billing term and make an upfront payment during migration, you see these line items.

New commerce invoice reconciliation line items of January 2022 billing period:

ProductName ChargeType UnitPrice EffectiveUnitPrice SubscriptionStartDate SubscriptionEndDate BillingFrequency ChargeStartDate ChargeEndDate
Microsoft Office 365 E3 new 192 192 January 25, 2022 January 24, 2023 January 25, 2022 January 24, 2023

When you switch to a new annual billing term and a monthly billing plan during migration, you see these line items.

New commerce invoice reconciliation line items of January 2022 billing period:

ProductName ChargeType UnitPrice EffectiveUnitPrice SubscriptionStartDate SubscriptionEndDate BillingFrequency ChargeStartDate ChargeEndDate
Microsoft Office 365 E3 new 16 16 January 25, 2022 January 24, 2023 Monthly January 25, 2022 February 24, 2022

Embrace this opportunity to streamline your financial planning and maximize your resources.

How to verify the license-based subscription transfer between partners in the reconciliation data?

To ensure smooth verification of license-based subscription transfers, follow these steps in the reconciliation data for each partner. Reconciliation data is crucial as it helps track and verify all transactions related to subscription transfers. For more information about the transfer, see transfer new commerce license-based subscriptions from one transacting CSP partner to another.

  • Check subscription cancellation and repurchase: The transfer process involves two main steps: first, the subscription with the source or original partner is canceled; second, the subscription is repurchased for the target or new partner. As a result, the subscription IDs change post-transfer. For example, if Partner A transfers a subscription to Partner B, the subscription is canceled for Partner A, and a new subscription with new ID is created for Partner B.

  • Maintain subscription properties: The subscription retains its key properties upon transfer, such as autorenewal settings. For instance, if the subscription was set to autorenewal and had specific settings, these properties continue to apply with the target partner.

  • Billing term and plan unchanged during transfer: The existing billing term and plan remain the same throughout the transfer. For example, if the source partner had an annual subscription with monthly billing plan and transferred it after five months, the target partner should continue the remaining seven months with monthly payments.

  • Subscription cancellation for source partner: The subscription appears as canceled for the source partner. In their reconciliation data, the ChargeType attribute, which indicates the type of charge applied to the subscription, should be listed as "cancelImmediate." For example, if Partner A cancels a subscription on November 1, 2024, the reconciliation data should show "cancelImmediate" under ChargeType for that subscription starting from November 1, 2024.

  • Consistent subscription dates for source partner: The SubscriptionStartDate and SubscriptionEndDate remain unchanged. For instance, if the source partner bought an annual subscription on May 10, 2024, with a monthly billing plan, the SubscriptionStartDate would be May 10, 2024, and the SubscriptionEndDate would be May 9, 2025. The subscription start and end dates remain unchanged even after the transfer.

  • Prorated charges and transfer date: The transfer date becomes the OrderDate for the canceled subscription, with prorated charges based on the billing plan and transfer date. For instance, if the subscription was transferred on November 1, 2024, the effective cancellation date remains November 1, 2024. Refunds are applicable for the period from November 1, 2024, to November 9, 2024, as the monthly billing cycle spans from October 10 to November 9. Prorated charges are calculated based on the number of days between these dates and the unit price. The ChargeStartDate for the subscription for the source partner should be November 1, 2024, and the ChargeEndDate should be November 9, 2024.

  • Target partner's subscription and charges start date: For the target partner, the subscription and charges begin on the transfer date. Verify that the ChargeStartDate and SubscriptionStartDate, in their reconciliation data are both November 1, 2024, with the SubscriptionEndDate as May 9, 2025.

  • Prorated first bill for the target partner: The first bill for the target partner is prorated based on the billing plan, running from November 1, 2024, to November 9, 2024. Subsequent bills follow the regular monthly cycle from November 10, 2024, to December 9, 2024, and continue on a monthly basis until May 9, 2025.

By following these steps, you ensure accurate verification of subscription transfers between partners, maintaining consistency and transparency in your reconciliation data.

Source partner's reconciliation data:

Recon PartnerId CustomerName OrderDate ProductName ChargeType UnitPrice BillableQuantity Subtotal TaxTotal Total Currency SubscriptionId ChargeStartDate ChargeEndDate EffectiveUnitPrice SubscriptionStartDate SubscriptionEndDate
First billing period 11111111-aaaa-11aa-aa11-111111111111 Contoso May 10, 2024 Microsoft 365 E3 new 45.6 3 136.8 0 136.8 USD 8691daa7-4760-4b4a-c193-8c1755b44ab5 May 10, 2024 Jun 09, 2024 45.6 May 10, 2024 May 09, 2025
Billing period before the transfer 11111111-aaaa-11aa-aa11-111111111111 Contoso Oct 10, 2024 Microsoft 365 E3 cycleCharge 45.6 3 136.8 0 136.8 USD 8691daa7-4760-4b4a-c193-8c1755b44ab5 Oct 10, 2024 Nov 09, 2024 45.6 May 10, 2024 May 09, 2025
Billing period after the transfer 11111111-aaaa-11aa-aa11-111111111111 Contoso Nov 01, 2024 Microsoft 365 E3 cancelImmediate 45.6 3 –45.6 0 –45.6 USD 8691daa7-4760-4b4a-c193-8c1755b44ab5 Nov 01, 2024 Nov 09, 2024 –15.2 May 10, 2024 May 09, 2025

Target partner's reconciliation data:

Recon PartnerId CustomerName OrderDate ProductName ChargeType UnitPrice BillableQuantity Subtotal TaxTotal Total Currency SubscriptionId ChargeStartDate ChargeEndDate EffectiveUnitPrice SubscriptionStartDate SubscriptionEndDate
Billing period after the transfer 22222222-bbbb-22bb-bb22-222222222222 Contoso Nov 01, 2024 Microsoft 365 E3 new 45.6 3 45.6 0 45.6 USD 5d3a7501-3b4a-4012-db07-ebc4192985b7 Nov 01, 2024 Nov 09, 2024 15.2 Nov 01, 2024 May 09, 2025
Next billing period 22222222-bbbb-22bb-bb22-222222222222 Contoso Nov 10, 2024 Microsoft 365 E3 cycleCharge 45.6 3 136.8 0 136.8 USD 5d3a7501-3b4a-4012-db07-ebc4192985b7 Nov 10, 2024 Dec 09, 2024 45.6 Nov 01, 2024 May 09, 2025

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