Learn how you can benefit from the new CSP annual billing option!
16/10/2017 | Blog
A flexible option for your customers and for your practice is now available in our platform allowing you to align with how your customers are invoiced, if desired and stay Microsoft consistent! The new annual billing option will be available to all CSP partners since it has been at the top requested CSP program features list. The information below can help you answer some basic questions, you and your end customers may have, and determine if annual billing is a good fit for your business model.
Monthly VS Annual Billing! Which one is the best?
Annual billing is a popular option for many companies because it provides a full year of revenue all at once, plus you ensure customer retention for 12 months and provides the additional advantage of being able to take action in advance of their renewal to retain their business. That’s a big deal for your business since you can calculate and forecast the lifetime value (LTV) of each of your customers, and it allows you to highlight the long-term benefits of your services throughout the year to encourage renewal after the first year. Moreover, annual billing is less of a hassle in terms of accounting if you compare it with monthly billing which occurs 12 times per year. One of the disadvantages with monthly billing is that your customers may cancel their subscription after only a few months.
Monthly billing has become the most common billing option. The reason for this is that monthly plans do not require an upfront fee, encouraging potential customers to sign up. More money and commitment required upfront means that annual billing can sometimes deter potential customers. Large payments and long-term contracts can also create negative feelings and provoke customers to refuse renewal.
While reading some initial questions questions may have come up. Relax and sit comfortably while we answer the basic questions you may have regarding this new option in our platform.
13 Things You Should Know
- Annual billing will be made available for all O365 subscriptions.
- After adding a new subscription, users will be prompted to select annual or monthly billing frequency.
- Once the billing frequency is selected it cannot be updated or changed.
- The license quantity for both monthly and annually billed subscriptions can be changed at any time.
- Subscriptions cannot be split – the entire subscription must have either monthly or annual billing.
- The service period begins on the subscription creation date and renews 12 months later. For example, a subscription created on January 10, 2017 will renew on January 10, 2018.
- Billing for the 12-month subscription occurs on the next billing date.
- Subscriptions with annual billing cancelled up to 30 days from the subscription creation date will be credited 100% on the following billing date. A subscription can be cancelled at any time during the year by the partner without penalty. The partner will receive a prorated cancellation credit on their next billing date.
- Cancellation credit is calculated as follows = ((monthly price*12)/365)*days in cancellation period*number of licenses.
- Seats can be added at any time during the subscription, and the cost is prorated.
- The offer price at the time of purchase is guaranteed throughout the 12-month subscription term. The subscription will renew at the current price as indicated on the price list.
- The add-on offer will inherit the same billing frequency as the parent offer (subscription).
- There will be no impact on the price list – it will continue to show the monthly price which can be multiplied by twelve to calculate the annual price.
For more information watch the 4 minute video Q&A we have prepared for you: