Billing schedules

Billing schedules let you configure pricing for a customer and automatically generate invoices.

With Sequence, billing schedules are highly flexible and can be configured to support a wide range of billing models.

In particular, Sequence helps companies with:

• complex billing models, such as usage-based billing
• variation in pricing across customers

These challenges are often faced by companies with sales-led motions. Sequence is specifically designed to help companies with sales-led motions automate billing and manage complexity.

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Components of a billing schedule

A billing schedule is where the different concepts in Sequence come together and get applied to a specific customer.

A billing schedule contains the following elements:

• Customer: The customer you want to bill
• Billing schedule dates and phases: The start and end dates of the schedule, and what day of the month you want to bill the customer. You can optionally also configure Phases
• Prices: The prices you want to charge the customer, for the products they use
• Optional discounts or minimums: Discounts or minimum fees that apply to configured prices
• Optional settings: Depending on the tax status of the customer, select a tax rate. Add a PO number or Invoice reference.

After a schedule is created, Sequence will automate the process of generating invoices for the customer.

When an invoice needs to be generated, Sequence will calculate the charges for the customer and create a draft invoice. The charges will be based on the pricing, the customer’s usage and any discounts applied.

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Pricing

After choosing a customer, the primary aspect of a billing schedule is pricing. In Sequence, pricing can be configured while creating your schedule, or separately within the product catalog.

You can read about the possible pricing models available with Sequence in full here.

In summary, pricing can be one of these models:

• Fixed fee: a fixed fee charged on a recurring basis
• Usage-based: a fee charged based on the customer’s usage
• Seat-based: a fee charged based on the number of seats a customer uses

Additionally, pricing can be either:

• In advance: the customer is charged at the start of the billing period
  • Only fixed fees can be charged in advance
• In arrears: the customer is charged at the end of the billing period

Pricing also has a billing frequency, which determines how often the customer is charged. The billing frequency can be:

• Monthly
• Quarterly
• Annually

In general, you can combine all different types of pricing within a billing schedule. Sequence will determine when an invoice is required to charge for each of the prices.

Combining multiple billing frequencies

You can combine prices with different billing frequencies (monthly, quarterly, annually) and types (in advance, in arrears) in a schedule. For example, combine:

• Annual in-advance fee with a monthly usage-based fee charged in arrears
• Quarterly in-arrears fees with monthly in-arrears fees.
• Monthly in-advance fee with a monthly usage-based fee charged in arrears

Sequence is designed to optimize and consolidate invoices where possible. For example, if you set up a Sequence billing schedule to bill your customers a fixed fee at the start of each month and a usage-based fee at month end, month-end invoices will also include the in-advance fee of the upcoming billing period.

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Discounts

Discounts can be applied to a billing schedule to reduce the amount charged to a customer.

Discounts can be either:

• Percentage: a percentage of the total amount charged
• Fixed: a fixed amount to reduce the total amount charged

Discounts can be applied to any or all of the products being charged for in a schedule.

A discount can be applied for a specific period of time, or indefinitely.

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Billing periods

Sequence generates invoices for a customer based on the billing periods configured in a schedule.

• Billing start date: The start date is when billing begins for the customer (often the contract start date)
• End date: The end date is the last day of the final billing period, such as the last day of a 12-month contract (often the contract end date)
• Recurrence date: If you are billing monthly, you can also configure when you want billing periods to start, such as 1st of the month.

To start billing immediately, set the start date to today’s date. You can optionally configure the recurrence date to the 1st of the month. This will generate a prorated charge for the first billing period and align future billing periods to month end. Alternatively, to bill the customer starting from the next month, set the start date to the first of next month to begin billing then.

The billing frequency determines how often invoices are generated, such as monthly or annually. The billing schedule uses the frequency of the attached prices (monthly, quarterly or annually).

Calendar and monthly billing: When you create a billing schedule, you can flexibly define what day of the month or week you want new billing periods to start. If you want to bill your customers on a monthly basis, you might choose to start new billing periods every 1st of the month, for example. Alternatively if your company uses a Calendar billing model, you can choose today as the day new billing periods should start on.

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Lifecycle of a billing schedule

A customer may have a billing schedule in place for an extended period of time. During this time, the schedule will go through different states.

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States

The states a schedule can transition through are:

• Draft: Draft schedules can still be edited without affecting billing or invoicing.
• Upcoming: Upcoming schedules are active schedules with a future start date.
• Active: The schedule is active and will produce invoices for the customer.
• Completed: The schedule has been completed and will no longer produce invoices.

Additionally, a schedule can have new prices and discounts added, and existing ones can be updated or removed.

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Draft schedules

You can create billing schedules as drafts. With draft mode, you can easily review schedules and make sure pricing, terms and start dates are correct before starting the billing process.

When you’re ready, a draft schedule can be started.

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Backdated billing schedules

You can create billing schedules with a start date in the past. Backdated billing schedules will create invoices for past billing periods.

For example, if today is the 1st of March and you set the billing schedule start date to 1st of February, recurring monthly, the schedule will automatically create the first invoice for the 1-28 February period.

Backdated billing schedules can be helpful for testing or to migrate existing customer contracts.

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Proration

Sequence automatically calculates charges for partial billing periods. For example, if you set the start date of your billing schedule to today (14/03/2023), but want new billing periods to start on the 1st of each month, the first billing period will be prorated (14/03 - 31/03).

For a billing schedule that has a price with a £500 monthly recurring fee, Sequence calculates the prorated charges for you.

Example calculation:

• Billing start date: 14/03/2023
• Start new billing periods on: 1st of each month
• First billing period (prorated): 14/03/2023 - 31/03/2023 (18 days)
• Invoice total (pre tax): £500 * (18 days / 31 days) = £290.32

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Roll-up Billing

Roll-Up Billing allows you to aggregate usage charges from multiple customers into a single invoice, provided they are in a parent-child relationship. This feature can be enabled for billing schedules where the customer is the parent.

Once enabled, Sequence will automatically combine the usage of all child customers and provide a detailed breakdown of each one’s usage in the consolidated invoice.

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Archiving billing schedules

You can archive billing schedules via the dashboard. When you archive a billing schedule, any remaining draft invoices will be voided. Finalized and sent invoices will remain.