Billing scenarios for one-time and select recurring purchases in new commerce experience

  • Article

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

Note

For a list of legacy billing scenarios, see Common billing scenarios for legacy CSP program partners working in Partner Center.

What is an NCE billing cycle or billing period?

A new commerce experience (NCE) billing cycle, or billing period, is one full calendar month. Any product purchased within a calendar month should be invoiced based on the billing term and plan chosen at the time of purchase.

Invoices and reconciliation files become available at Partner Center or via APIs between the sixth and eighth days of the following month. For example, the billing cycle for January is from January 1 to 31. Your January invoice and reconciliation file become available between February 6 and 8.

What is an NCE charge cycle?

An NCE charge cycle is how often you are charged for the product. It isn't the same as a billing period or a calendar month, and it depends on when you bought the product and how often you pay for it.

Your subscription charge cycle days are based on the calendar days of the month when you buy for the first time, or pay recurring cycle charges, or renew your subscription.

Let’s say you bought a Microsoft Office product on February 21, 2022, with an annual billing term and a monthly billing plan. Your first charge cycle would be from February 21, 2022, to March 20, 2022. If you made any changes to your subscription between February 21 and March 20, 2022, we would count the charge cycle days as 28 because February has 28 calendar days (except for leap years), and the February charge cycle would end on March 20, 2022. However, if you made any changes between March 21 and April 20, 2022, we would count the charge cycle days as 31 because the monthly recurring cycle charge started from March 21, 2022, and March has 31 calendar days.

Important

You can coterminate subscriptions or align charge cycles with calendar months. See Align subscription end dates for details.

How are one-time and recurring charges calculated?

Important

When reconciling, the billing lines are Charge Start Date, Charge End Date, Effective Unit Price, Billable Quantity, Billing Frequency, Subscription Start Date, Subscription End Date, and Amount.

You can find an explanation of these attributes in the article CSP one-time purchase reconciliation file fields.

Let’s say that on June 18, 2020, you bought 10 licenses (10 seats) of a Microsoft 365 Business Standard subscription with a monthly billing term and a price of EUR 10.08 per seat.

Let’s look at what you can expect to see on your June billing cycle reconciliation file, which you’ll get in July. In this case, only one billing line will show the details of your subscription purchase transaction.

Order Date Charge Start Date Charge End Date Charge Type Effective Unit Price Billable Quantity Amount
June 18, 2021 June 18, 2021 July 17, 2021 new 10.08 10 100.8

If you decide to renew your subscription, you’ll see a new transaction with the ChargeType “renew” and the ChargeStartDate “July 18, 2021.”

Order Date Charge Start Date Charge End Date Charge Type Effective Unit Price Billable Quantity Amount
July 18, 2021 July 18, 2021 August 17, 2021 renew 10.08 10 100.8

On the other hand, if you opt for a one-year billing term instead of a monthly billing plan, your billing line will show a charge of EUR 100.8 but with a ChargeType of “cycleCharge” until the June 2022 billing cycle.

Order Date Charge Start Date Charge End Date Charge Type Effective Unit Price Billable Quantity Amount
July 18, 2021 July 18, 2021 August 17, 2021 cycleCharge 10.08 10 100.8

Lastly, if you decide to prepay your subscription, only one billing line will show up in your June billing cycle reconciliation file.

Order Date Charge Start Date Charge End Date Charge Type Effective Unit Price Billable Quantity Total
June 18, 2021 June 18, 2021 June 17, 2022 new 120.96 10 1,209.6

This makes it easier for you to keep track of how much you spend on your subscriptions.

Important

A complex product like Microsoft 365 E5 combines telecommunication (Skype) and non-telecommunication (Microsoft 365 E3 Office) components into one unified product. This integration gives users a seamless experience while ensuring that telco and non-telco revenue are kept separate for billing purposes.

When you purchase Microsoft 365 E5, you will find two separate lines for "Microsoft 365 E5" in your reconciliation data: one for the telco charges and one for the non-telco charges.

How do I differentiate between one-time and recurring payments in a reconciliation file

One-time payment:

  • Charge Start Date and Charge End Date are the same as the Subscription Start Date and Subscription End Date.
  • Billing Frequency is blank.

Recurring payment or billing plan:

  • Charge Start Date and Charge End Date are separated by one month.
  • Billing Frequency says "Monthly."
  • Charge Start Date and Charge End Date are separated by one year.
  • Billing Frequency says "Annual."

How do you calculate the costs of a product with both subscription and pay-as-you-go charges?

Maximizing the benefits of your subscription-based products is easy and straightforward. But some subscriptions may come with a set number of prepaid units for a specific price. If you use more, you’ll be charged the pay-as-you-go rate for any extras. For example, if you buy one of these products:

  • Microsoft 365 subscription: For USD 10/month, you can make calls for 100 minutes. Each additional minute will cost 10 cents.
  • SendGrid product: For USD 10/month, you can send 100 emails. Each additional email will cost 10 cents.

If you make calls for 150 minutes or send 150 emails in a month, you go over your limit, resulting in extra pay-as-you-go charges.

For such complicated subscriptions, you need to use the daily rated usage and invoice reconciliation data together to figure out the costs in the billing period.

Here’s how:

  1. Look at the BillingPreTaxTotal attribute of the daily rated usage data to find the daily pay-as-you-go charges. In this example, that’s 50 * 0.1 = USD 5
  2. Check the Total attribute in the invoice reconciliation data to see the monthly costs for your pay-as-you-go charges, which should be the same as USD 5. The BillableQuantity attribute shows the units, which in this case should be 50.
  3. Find the subscription cost in the Total attribute based on the billing plan in the invoice reconciliation data. For example, the cost will appear each month if you pay monthly. In this case, it should be USD 10.
  4. Lastly, check the Product and SKU IDs in the invoice reconciliation file to get the total cost, which may include two separate lines for the subscription and pay-as-you-go costs. In this case, it should be USD 15.

With these easy steps, you can keep track of your subscription costs and make smart choices about how you use them.

How do I determine the product category?

You can determine the product category in the reconciliation data using the methods listed below. Except in rare cases, this workaround can determine the product category for most transactions.

Condition Product Category
PublisherName attribute says "Microsoft" or "Microsoft Corporation" First-party product
PublisherName attribute says something other than "Microsoft" or "Microsoft Corporation," and "PublisherID" has a value. Third-party product
TermAndBillingCycle attribute has the keyword "Reservation." Azure Reservation
TermAndBillingCycle attribute has the keyword "Savings Plan." Azure Savings Plan
TermAndBillingCycle attribute has the keyword "Subscription."
This attribute doesn't always include the keyword. In that case, use the SKU name, such as "SQL Server," "Windows Server," and so on.		 Software subscription
TermAndBillingCycle attribute has the phrase "one-month," "one-year," or "three-year." License-based. However, double-check to confirm.
TermAndBillingCycle attribute is blank, and "ChargeEndDate" column is empty. Perpetual software
SubscriptionDescription attribute says "Azure plan." Azure plan
Remaining conditions After eliminating all of the preceding product categories, the remaining category should be referred to as an Azure plan. (Partners can assign unique subscription names.) Double-check that nothing is missing.

How do I find the billing term in a reconciliation file?

TermAndBillingCycle is a description that shows different texts to describe the billing term and plan. However, billing terms and plans for different subscriptions can differ, so there is no standard text to describe them.

But don’t worry—if you need to know the billing term, check the subscription start and end dates to see the duration of your subscription. To find out the billing plan, check the charge start and end dates to see the timeframe of your charge cycle.

See the examples below:

TermAndBillingCycle SubscriptionStartDate SubscriptionEndDate
One-year commitment for monthly/yearly billing April 15, 2021 April 14, 2022
One-year term duration April 22, 2021 April 2, 2022
One-month commitment for monthly billing April 14, 2021 May 13, 2021
Three-year commitment for monthly/yearly billing May 25, 2021 May 24, 2024

Monthly term subscription expiration dates on special cases

Here’s how 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 on the last day of a month, your subscription will end on the:

  • 30th day of a month with 31 days
  • 29th day of the month with 30 days
  • 28th day of February in a leap year
  • 27th day of February in non-leap years

Note

Remember, these purchases were made on different dates and are unrelated.

The dates in the reconciliation file are in Coordinated Universal Time (UTC).

If you purchase a monthly subscription, the charge cycle should look like this:

Billing Term Order Date Charge Type Subscription Start Date Subscription End Date Renew Date Charge Start Date Charge End Date
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

If you purchase an annual subscription with a monthly billing plan, the charge cycle should look like this:

Billing Term Billing Plan Order Date Charge Type Subscription Start Date Subscription End Date Renew Date Charge Start Date Charge End Date
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 on the day before the last day of a month, your subscription will end on the:

  • 29th day of a month with 31 days
  • 28th day of a month with 30 days

Note

Remember, these purchases were made on different dates and are unrelated.

The dates in the reconciliation file are in UTC.

If you purchase a monthly subscription, the charge cycle should look like this:

Billing Term Order Date Charge Type Subscription Start Date Subscription End Date Renew Date Charge Start Date Charge End Date
Monthly January 30, 2021 new January 30, 2021 February 27, 2021 February 28, 2021 January 30, 2021 February 27, 2021
Monthly February 27, 2021 new February 27, 2021 March 26, 2021 March 27, 2021 February 27, 2021 March 26, 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

If you purchase an annual subscription with a monthly billing plan, the charge cycle should look like this:

Billing Term Billing Plan Order Date Charge Type Subscription Start Date Subscription End Date Renew Date Charge Start Date Charge End Date
Annual Monthly January 30, 2021 new January 30, 2021 January 29, 2022 January 30, 2022 January 30, 2021 February 26, 2021
Annual Monthly February 27, 2021 cycleCharge January 30, 2021 January 29, 2022 January 30, 2022 February 27, 2021 March 29, 2021
Annual Monthly March 30, 2021 cycleCharge January 30, 2021 January 29, 2022 January 30, 2022 March 30, 2021 April 28, 2021
Annual Monthly April 29, 2021 cycleCharge January 30, 2021 January 29, 2022 January 30, 2022 April 29, 2021 May 29, 2021
Annual Monthly May 30, 2021 cycleCharge January 30, 2021 January 29, 2022 January 30, 2022 May 30, 2021 June 28, 2021
Annual Monthly June 29, 2021 cycleCharge January 30, 2021 January 29, 2022 January 30, 2022 June 29, 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 28, 2021
Annual Monthly September 29, 2021 cycleCharge January 30, 2021 January 29, 2022 January 30, 2022 September 29, 2021 October 29, 2021
Annual Monthly October 30, 2021 cycleCharge January 30, 2021 January 29, 2022 January 30, 2022 October 30, 2021 November 28, 2021
Annual Monthly November 29, 2021 cycleCharge January 30, 2021 January 29, 2022 January 30, 2022 November 29, 2021 December 29, 2021
Annual Monthly December 30, 2021 cycleCharge January 31, 2021 January 30, 2022 January 30, 2022 December 30, 2021 January 29, 2022

How are licenses (seats) added or removed?

If you have Microsoft license-based products and need to adjust the number of seats or licenses you’ve purchased, it’s important to understand how billing works. In this guide, we’ll walk you through the process of adjusting seats and explain how the charges are calculated.

Let’s say you purchased ten “Microsoft 365 Business Standard” licenses on June 18, 2021, for EUR 10.08 each, with a monthly billing term and plan. You added two more seats on June 20, and on the following July reconciliation file for the June billing period, you’ll see the following bill lines:

Order Date Charge Type Unit Price Charge Start Date Charge End Date Effective Unit Price Billable Quantity 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

Adjusting seats is handled in two steps:

  • Refund (wipe): a refund for the original seat count from the adjustment day to the end of the charge cycle.
  • Charge (recreate): a charge for the adjusted seat count for the same period.

The charges are calculated using a formula based on the Effective Unit Price.

Effective Unit Price = unit price / charge cycle days \* billing days (Discounts and adjustments may affect the effective unit price).

Billing days are counted from when an event occurs until the charge cycle ends. Charge cycles and billing plans have the same duration.

Note

The purchase month determines the charge cycle or billable days: June has 30, August has 31, and a year has 365 or 366 (in a leap year).

In the above example, first transaction is a charge of EUR 100.8 for 10 licenses for 30 days from June 18 to July 17.

Total cost (before taxes and exchange rates) = effective unit price \* billable quantity.

The second transaction is a refund of EUR 94 for 10 licenses for 28 days from June 20 to July 17.

Refund amount = Effective Unit Price (10.08 / 30 \* 28) \* Billable Quantity (10) = 94.08

The third transaction is the adjusted charge of EUR 112.8 for 12 licenses for 28 days from June 20 to July 17.

Total cost = Effective Unit Price (10.08 / 30 \* 28) \* Billable Quantity (12) = 112.89

Let’s say you removed four seats or licenses on June 20. We’ll give you a refund and recalculate the fees as we did before.

Reconciliation data should include the following billing lines:

Order Date Charge Type Unit Price Charge Start Date Charge End Date Effective Unit Price Billable Quantity 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

The first transaction is a refund of EUR112.89 for 12 licenses for 28 days from June 20 to July 17.

Refund amount = Effective Unit Price (10.08 / 30 \* 28) \* Billable Quantity (12) = 112.89

The adjusted transaction is a EUR75.26 charge for 8 licenses for 28 days from June 20 to July 17.

Total cost = Effective Unit Price (10.08 / 30 \* 28) \* Billable Quantity (8) = 75.26

How do I calculate the total number of seats (licenses) after multiple changes during a billing period?

Let’s take an example where you bought 10 Microsoft 365 Business Standard seats for your client Contoso on March 5, 2022. You made several changes to the subscription, such as adding 5 seats on March 7 and 10 on March 10, and removing 2 seats on March 12 and 3 on March 14. Finally, on March 25, you added 10 seats. Now, you need to know the total number of seats at the end of the March billing period.

The reconciliation file or API doesn't show your changes in chronological order.

To arrange transactions chronologically and logically, use the following steps:

  1. Use the subscription ID from the first purchase. To find the first purchase according to this example, set the order date to March 5, 2022, the charge type to “new,” and the product or SKU to “Microsoft 365 Business Standard.”
  2. Sort the order date from oldest to newest and link each seat addition and removal event with its “ReferenceID.” For more information, see How are licenses (seats) added or removed later in this article.
  3. The last positive charge transaction will show the total number of seats in the billing period. In this example, the total number of seats is 30 for the subscription in March.
  4. However, if you make multiple adjustments to your seat within a day, you may notice more than one positive charge for that day. This can make it difficult to determine which charge is the most recent. To figure out how many seats you have for a subscription during a billing period, look for the OrderDate of the transactions with ChargeType “new,” “renew,” or “cycleCharge” in that period. Then, calculate the sum of the BillableQuantity for all positive charges from that day for all charge types (excluding customerCredit from other billing periods) and subtract the total of the BillableQuantity for all negative charges from that day from the total quantity of the positive charges. The result is the number of licenses during the billing period.

By summarizing, sorting the transactions in order of when they occurred, and linking them to the ReferenceID, you can keep track of multiple seat changes in a billing period and figure out how many seats there are in total.

See the table below to correlate the events.

OrderDate ProductName ChargeType UnitPrice BillableQuantity EffectiveUnitPrice Subtotal 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

How are the refunds calculated if I cancel a subscription within seven days of buying or renewing it?

Let’s say you bought 10 seats of a Microsoft 365 Business Standard subscription on July 15, 2021, for EUR 10.08 each with a monthly billing term and plan, then canceled the subscription on July 17. In this case, the following billing line will appear on the August reconciliation data for the July billing cycle:

Order Date Charge Type Unit Price Charge Start Date Charge End Date Effective Unit Price Billable Quantity 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

The first transaction is a charge of EUR 100.8 for 10 licenses for 31 days from July 15 to August 14.

Total cost = Effective Unit Price (10.08 / 31 \* 31) \* Billable Quantity (10) = 100.8

The second transaction is a refund of EUR 94.2 refund for cancellation for 29 unused days from July 17 to August 14.

Refund amount = (Effective Unit Price (10.08 / 31 \* 29) \* Billable Quantity (10) = 94.2

Important

You can get a full refund if you cancel within 24 hours of purchase or renewal, or a prorated refund if you cancel within 7 days.

There are two types of upgrades:

  • Full upgrade, when you upgrade every license (seat) of the base subscription to an advanced one.
  • Partial upgrade, when you upgrade some of the licenses (seats) of the base subscription to an advanced one.

You might have multiple subscriptions with different billing terms, prices, and charge cycles. Managing these subscriptions can be complicated and confusing, especially if you want to upgrade.

You can link transactions that happened during the upgrade in your reconciliation data.

Full upgrade

Let’s say you purchased 300 licenses of a Microsoft 365 Business Standard subscription on June 18th with a monthly billing term. The monthly price for each license was EUR 10.08. However, on June 25th, you decided to upgrade your subscription to Office 365 E1, which would cost EUR 6.43 per month for each license.

When you upgrade your subscription, you’ll receive a refund for the base subscription and be charged for the upgraded one from the day of the upgrade until the charge cycle ends. This ensures that you only pay for the services you use and that your billing is accurate and up-to-date.

The Effective Unit Price determines the charges.

Effective Unit Price = unit price / charge cycle days \* billing days (Discounts and adjustments may affect the effective unit price).

Billing days are counted from when an event occurs until the charge cycle ends. Charge cycles and billing plans have the same duration.

Total cost *(before taxes and exchange rates)* = effective unit price \* billable quantity.

The July reconciliation data for June billing will include these billing lines:

Order Date Product Charge Type Unit Price Charge Start Date Charge End Date Effective Unit Price Billable Quantity Total Subscription ID Reference ID
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

The first line is a charge of EUR 3024 for the Microsoft 365 Business Standard subscription for the whole month from June 18 to July 17.

The second line is a refund of EUR 2,316 for the same subscription because you didn’t use it for 23 days from June 25 to July 17.

Refund = Effective Unit Price (10.08 / 30 \* 23) \* Billable Quantity (300) = 2,316.

The third line is a charge of EUR 1,476 for the upgraded subscription for the same 23 days from June 25 to July 17.

Total cost = Effective Unit Price (6.43 / 30 \* 23) \* Billable Quantity (300) = 1,476.

How do I calculate the total seats for the base and upgraded subscriptions in a billing period for a full upgrade?

The reconciliation file or API doesn't show your changes in chronological order.

To arrange transactions chronologically and logically, use the following steps:

  1. Use the subscription ID from the first purchase. To find the first purchase according to this example, set the order date to June 18, 2021, the charge type to “new,” and the product or SKU to “Microsoft 365 Business Standard.”

  2. Sort the order date from oldest to newest. “ReferenceID” and “SubscriptionID” connect these transactions. For more information, see how can I link my upgraded subscriptions.

  3. The base and upgraded subscriptions will have the charge type “convert.”

  4. The last positive charge transaction with the charge type “convert” will show the upgraded subscription’s seat count in the billing period. In this example, the total number is 300 for the upgraded subscription in March.

  5. However, if you make multiple upgrades to your subscription within a day, you may notice more than one positive charge for that day. This can make it difficult to determine which charge is the most recent. To figure out how many seats you have for a subscription during a billing period, look for the OrderDate of the transactions with ChargeType “new,” “renew,” or “cycleCharge” in that period. Then, calculate the sum of the BillableQuantity for all positive charges from that day for all charge types (excluding customerCredit from other billing periods) and subtract the total of the BillableQuantity for all negative charges from that day from the total quantity of the positive charges. The result is the number of licenses during the billing period.

Note

When buying a new advanced subscription, the charge type “convert” is used for upgraded transactions, while “moveQuantity” is used when the advanced subscription already exists.

Partial upgrade

Let’s say you purchased 300 licenses of a Microsoft 365 Business Standard subscription on June 18th with a monthly billing term. The monthly price for each license was EUR 10.08. However, on June 25th, you decided to upgrade your 100 seats to Office 365 E1, which would cost EUR 6.43 per month for each license.

When you upgrade your subscription, you’ll receive a refund for the base subscription and be charged for the upgraded one from the day of the upgrade until the charge cycle ends. This ensures that you only pay for the services you use and that your billing is accurate and up-to-date.

The Effective Unit Price determines the actual charges.

Effective Unit Price = unit price / charge cycle days \* billing days (Discounts and adjustments may affect the effective unit price).

Billing days are counted from when an event occurs until the charge cycle ends. Charge cycles and billing plans have the same duration.

Total cost (before taxes and exchange rates) = effective unit price \* billable quantity.

The July reconciliation file for June billing will include these billing lines:

Order Date Product Charge Type Unit Price Charge Start Date Charge End Date Effective Unit Price Billable Quantity Total Subscription ID Reference ID
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

The first line item is a charges of EUR 3024 for the Microsoft 365 Business Standard subscription for the whole month from June 18 to July 17.

The second line is a refund of EUR 772 refund for 100 licenses of the base subscription because you didn’t use it for 23 days from June 25 to July 17.

Refund = Effective Unit Price (10.08 / 30 \* 23) \* Billable Quantity (100) = 772

The third line is a charge of EUR 492 for the upgraded subscription for the same 23 days from June 25 to July 17.

Total cost = Effective Unit Price (6.43 / 30 \* 23) \* Billable Quantity (100) = 492.

Note

The refund amount is a way to adjust the cost of the remaining charge cycle.

How do I calculate the total seats for the base and upgraded subscriptions in a billing period for a partial upgrade?

The reconciliation file or API doesn't show your changes in chronological order.

To arrange transactions chronologically and logically, use the following steps:

  1. Use the subscription ID from the first purchase. To find the first purchase according to this example, set the order date to June 18, 2021, the charge type to “new,” and the product or SKU to “Microsoft 365 Business Standard.”

  2. Sort the order date from oldest to newest. “ReferenceID” and “SubscriptionID” connect these transactions. For more information, see how can I link my upgraded subscriptions.

  3. The base and upgraded subscription will have the charge type “convert.”

  4. The last positive charge transaction with the charge type “convert” will show the upgraded subscription’s seat count for the billing period. In this example, it's 100 in March. The base subscription seats are calculated by subtracting the billable quantity of the “convert” charge type from the “new” charge type. In this example, it's 200 in March.

  5. However, if you make multiple upgrades to your subscription within a day, you may notice more than one positive charge for that day. This can make it difficult to determine which charge is the most recent. To figure out how many seats you have for a subscription during a billing period, look for the OrderDate of the transactions with ChargeType “new,” “renew,” or “cycleCharge” in that period. Then, calculate the sum of the BillableQuantity for all positive charges from that day for all charge types (excluding customerCredit from other billing periods) and subtract the total of the BillableQuantity for all negative charges from that day from the total quantity of the positive charges. The result is the number of licenses during the billing period.

Note

When buying a new advanced subscription, the charge type “convert” is used for upgraded transactions, while “moveQuantity” is used when the advanced subscription already exists.

If you want to track the transactions that happened when you upgraded your subscriptions, you need to use two identifiers: the SubscriptionID and the ReferenceID.

Use the SubscriptionID of the base product to find the corresponding ReferenceID. This will enable you to see all the related transactions. You can then use the SubscriptionID and ReferenceID to link all the transactions that occurred during an upgrade event.

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

Let’s say you bought 25 “Dynamics 365 Guides” licenses (seats) on June 25 as a free trial. Trial products last one month before you can upgrade to the paid version, which is like an upgrade.

The July reconciliation file will include the following billing line for the June billing cycle:

Order Date Charge Type Unit Price Charge Start Date Charge End Date Effective Unit Price Billable Quantity Product Qualifier 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

The first line item shows no charge for the “Dynamics 365 Guides” trial subscription. Using the ProductQualifiers attribute, you can verify it. Later on the same day, you turned it into a paid version. The refund should be on the second line. Since it’s a trial, there’s no refund.

The third line shows an EUR 1,315.25 cost for the paid version from June 25, 2021, to July 24, 2021.

Total cost = Effective Unit Price (52.61 / 30 * 30) * Billable Quantity (25) = 1,315.25

How do I reconcile transactions after changing billing plans?

You can change your billing plan after the first charge cycle. For example, if you want to switch from an annual to a monthly billing plan, you can do so after one year.

Let’s look at an example.

You bought ten licenses for Dynamics 365 Commerce on September 20, 2021, with a three-year billing term and an annual billing plan. You can change the billing plan to monthly on September 19, 2022, after the end of the annual charge cycle. The monthly charge will show up in the September 2022 reconciliation data, and its ChargeCycle will show “changeBillingPlan” to confirm the change.

Note

Changing billing plans doesn’t change the start and end dates of the subscription.

Annual to monthly:

Charge Type Quantity Unit Price Effective Unit Price Total Charge Start Date Charge End Date Billing Frequency
new 10 250 250 2,500 September 20, 2021 September 19, 2022 Annual
changeBillingPlan 10 20 20 200 September 20, 2022 October 19, 2022 Monthly

Monthly to annual:

Charge Type Quantity Unit Price Effective Unit Price Total Charge Start Date Charge End Date Billing Frequency
new 10 20 20 200 September 20, 2021 October 19, 2021 Monthly
changeBillingPlan 10 250 229.16 2291.6 October 20, 2021 September 19, 2022 Annual

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

When you migrate to New Commerce in the middle of a legacy charge cycle, your charges will be split between two invoices.

Any prepaid charges will be prorated and refunded on the next legacy bill after the migration. The new commerce subscription will then bill new charges in the same way, so you won’t lose money or miss out on any services during the migration.

To help you understand this better, let’s look at an example:

Let’s say that on July 21, 2021, you bought a legacy Microsoft Office 365 E3 subscription with an annual billing term and a monthly billing plan. But on January 24, 2022, you decided to migrate the subscription to new commerce while keeping the same billing term and plan.

Here’s what will happen to your charges:

Your legacy invoice will show you all of your legacy subscription charges up to January 23, 2022. From January 24, 2022, your new commerce subscription charges will appear on the new commerce invoice.

Consider the following details

Purchased licenses (seats): One

Price of a license/seat for a month: USD 16

Legacy billing anniversary date: The 21st day of each month

Legacy monthly reconciliation file of January 2022:

Subscription Name Charge Type Unit Price Subscription Start Date Subscription End Date Billing Cycle Charge Start Date Charge End Date
Microsoft Office 365 E3 Prorate fees when purchase 16 July 21, 2021 July 2, 2022 Monthly January 2, 2022 February 20, 2022

Legacy monthly reconciliation file of February 2022:

Subscription Name Charge Type Unit Price Subscription Start Date Subscription End Date Billing Cycle Charge Start Date Charge End Date
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

NCE monthly reconciliation file of January 2022:

In January, the charges will be prorated after the migration.

Subscription Name Charge Type Unit Price Effective Unit Price Subscription Start Date Subscription End Date Term & Billing Cycle Billing Frequency Charge Start Date Charge End Date
Microsoft Office 365 E3 new 16 15.42 January 25, 2022 July 20, 2022 Annual Monthly January 25, 2022 February 20, 2022

If you switched the billing plan to annual while migrating, the transactions would look like this:

NCE monthly reconciliation file of January 2022:

Subscription Name Charge Type Unit Price Effective Unit Price Subscription Start Date Subscription End Date Term & Billing Cycle Billing Frequency Charge Start Date Charge End Date
Microsoft Office 365 E3 new 192 95.21 January 25, 2022 July 20, 2022 Annual January 25, 2022 July 20, 2022

If you changed both the billing plan and the billing term to annual while migrating, the transactions would look like this:

NCE monthly reconciliation file of January 2022:

Subscription Name Charge Type Unit Price Effective Unit Price Subscription Start Date Subscription End Date Term & Billing Cycle Billing Frequency Charge Start Date Charge End Date
Microsoft Office 365 E3 new 192 192 January 25, 2022 January 24, 2023 Annual January 25, 2022 January 24, 2023

If you changed the billing plan to monthly and the billing term to annual while migrating, the transactions would look like this:

NCE monthly reconciliation file of January 2022:

Subscription Name Charge Type Unit Price Effective Unit Price Subscription Start Date Subscription End Date Term & Billing Cycle Billing Frequency Charge Start Date Charge End Date
Microsoft Office 365 E3 new 16 16 January 25, 2022 January 24, 2023 Annual Monthly January 25, 2022 February 24, 2023

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