In my last post on Item types in Subscription billing, I broke down the different item types and how they are used to define the methods in which an item gets billed. In this blog post, I will dive into the Pricing methods that are available to add into our Billing schedule lines.
When setting up Billing schedules within the Subscription billing module for your Customers, there are four Pricing methods that a user can employ.
- Flat Tier
The methodology behind a couple of these pricing methods can be a bit confusing, so I am here to help de-mystify them for you!
In my example, I have a Released product (item) called Service. The Base sales price on the Released product is $500.
|Base Sales Price for Service item is $500|
Additionally, there is a Trade agreement set up to reflect different pricing for Customer US-003 for a sales price of $450.
|Customer US-003 has a Sales price of $450 for the item|
There are additional Trade agreements set up for the Tier and Flat tier Pricing methods, and we will dive into those later in this blog post.
Standard - This method of pricing will pull the sales price listed on an item (Released product). If a standard Trade agreement is available, it will pull that price. This price cannot be modified on the recurring billing line!
Let's use the examples above to see how an item's price gets pulled through to a Billing schedule line for two different customers, US-001 (no Trade agreement) and US-003 (has a Trade agreement).
In my first example, Customer US-001 is set up with a Quarterly Billing schedule. The pricing method is set to Standard and the Unit price comes through as the Base sales price of $500.
In my second example, Customer US-003, who has a Trade agreement, is set up with a Quarterly Billing schedule as well. The Pricing method is also set to Standard, but the Unit price comes through as the Trade agreement price of $450.
As you can see, the Standard method of pricing is similar to how pricing gets pulled on a Sales order, using Trade agreements and the defined Base sales price.
|Screenshot of Tier amounts in Trade agreement|
- 100 x $500 = $50,000
- 50 x $475 = $23,750
- 50 x $450 = $22,500
- 300 x $350 = $105,000
- $50,000 + $23,750 + $22,500 + $105,000 = $201,250
- $201,250 / 500 = $402.50
|Sample Billing schedule with quantities of 100 and 500|
|Screenshot of Flat tier amounts in Trade agreement|
|Flat tier examples|