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

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

What is a new commerce billing cycle or billing period?

A new commerce billing cycle, or billing period, is one full calendar month, and you're invoiced based on the billing term and billing plan you select.

You receive invoices and reconciliation data the following month. For example, for a billing period from January 1 to 31, expect to get 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, lasting 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.

How are one-time and recurring charges calculated?

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.

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, 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. Essentially, the billing plan covers the period between the ChargeStartDate and the ChargeEndDate. While BillingFrequency might often hint at the billing plan, it’s important to verify these dates to ensure they're correct.

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 and 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:

• If you buy on the last day of a month
• If you buy on the day before the last day 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 on the:

• 30th day of the next month that has 31 days.
• 29th day of the next month that has 30 days.
• 27th day of the next month that has 28 days (February in a nonleap year).
• 28th day of the next month that has 29 days (February in a leap year).

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

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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 on the:

• 29th day of the next month that has 31 days.
• 28th day of the next month that has 30 days.
• 26th day of the next month that has 28 days (February in a nonleap year).
• 27th day of the next month that has 29 days (February in a leap year).

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

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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

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How are licenses added or removed?

Learn how we adjust charges for license-based products when you update the license count.

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 steps at once:

• Refund (Wipe): we refund for original 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 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.

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. To simplify the total cost, we didn't include taxes and exchange rates.

• The second reconciliation line item is a refund of EUR 94.08 for 10 licenses unused 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. To simplify the total cost, we didn't include taxes and exchange rates.

• The third reconciliation line item is a charge of EUR 112.8 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. To simplify the total cost, we didn't include taxes and exchange rates.

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 unused 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. To simplify the total cost, we didn't include taxes and exchange rates.

• 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. To simplify the total cost, we didn't include taxes and exchange rates.

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. To simplify the total cost, we didn't include taxes and exchange rates.

• 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. To simplify the total cost, we didn't include taxes and exchange rates.

How should I reconcile, and link upgraded transactions?

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. 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) = 3,048. To simplify the total cost, we didn't include taxes and exchange rates.

• 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. To simplify the total cost, we didn't include taxes and exchange rates.

• 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. To simplify the total cost, we didn't include taxes and exchange rates.

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) = 3,048. To simplify the total cost, we didn't include taxes and exchange rates.

• 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. To simplify the total cost, we didn't include taxes and exchange rates.

• 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. To simplify the total cost, we didn't include taxes and exchange rates.

How can I link my upgraded subscriptions?

To verify the transactions or billing line items for your subscription upgrade, you need two IDs: SubscriptionId and ReferenceId. 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, 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 on the same day you started upgraded to the paid version.

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, for a total of 30 days.

   • Total (Charge) = EffectiveUnitPrice (52.61 / 30 * 30) * BillableQuantity (25) = 1,315.25. To simplify the total cost, we didn't include taxes and exchange rates.

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 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 needs.

• 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 subscription ID.

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

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

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 can change to monthly payments after one 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 19, 2022. The next month, your bill would show the monthly charge and mark it as "convert" for ChargeType.

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 legacy Microsoft Office 365 E3 subscription on July 21, 2021, with a monthly billing plan. On January 24, 2022, you migrated to a new commerce subscription with the same billing term and plan.

Here's how the billing works:

• The legacy invoice covers charges until 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. 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 cancels the subscription with the source or original partner and repurchases it for the target or new partner. The subscription IDs change post-transfer.

• Maintain subscription properties: The subscription retains its properties upon transfer. For instance, if the subscription was set to autorenewal, it continues to renew automatically 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 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 should be listed as "cancelImmediate."

• 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. These 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. If the subscription was transferred on November 1, 2024, the effective cancellation date is the same, and refunds apply from November 1, 2024, to November 9, 2024. Verify charges using the ChargeStartDate and ChargeEndDate attributes.

• Target partner's subscription and charges start date: For the target partner, the subscription and charges begin on the transfer date. Check their reconciliation data for the ChargeStartDate and SubscriptionStartDate, both of which should be 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 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

Related content

• Sample monthly billing scenarios for new subscriptions, changing license amounts, or suspensions