Installment Terms Invoicing—Use Cases
This feature allows you to sell high-priced Non-Subscription Offerings (NSOs) to your customers by letting them choose to pay in installments. Installment Terms provides the following benefits:
- For your customers: Makes expensive NSO products more affordable by breaking the total cost into smaller payments with multiple due dates at the invoice line item level.
- For you: Records the entire revenue from the NSO sale upfront.
You can define installment terms once, then map them to multiple NSOs in your product catalog. This prevents product catalog proliferation. You can then grant your customers the installment options mapped to the NSO they wish to purchase.
The following use cases demonstrate the Installment Terms payment monetization model:
Use Case Examples
Use Case #1—Aligned with Master Plan Instance Installment
A CSR extends an offer to an existing customer to purchase a Google Pixel phone ($600 + 10% tax) with a 3-month aligned installment.
- 3-month installment term (type = aligned) is defined on product catalog.
- 3-month installment term is mapped to NSO offering, Google Pixel phone.
- Google pixel phone is mapped to a subscription, Unlimited Phone and Data.
An existing customer purchases a Google Pixel phone for $600 (+ 10% tax) with a 3-month aligned installment mapped to a subscription: Unlimited Phone and Data.
- An order for a Google Pixel ($660) is created to be billed on anniversary of Unlimited Phone and Data.
- On the Unlimited Phone and Data ($50/monthly) anniversary bill date, a purchase of a Google Pixel phone for $660 is invoiced along with the subscription, and an installment schedule is created.
| Invoice No | Plan | Services | Amount | Due Amount | Due Date | Note |
|---|---|---|---|---|---|---|
| 110 | Unlimited Phone Data | Phone and Data | $50 | $50 | 4/1/2024 | Not part of installment schedule |
| 110 | Google Pixel | $660 | $220 | 4/1/2024 | Installment schedule | |
| $220 | 5/1/2024 | |||||
| $220 | 6/1/2024 | |||||
| Total | $710 | |||||
- The Account total balance is updated with the whole amount ($770), and the current balance due is updated only with the amount due ($50 + $220 = $270).
- A customer will be notified of the installment due via the subscription monthly statement.
- If a $220 installment is due immediately, then a payment is collected. If successful, a payment is applied to invoice# 110, and the installment schedule is updated. If it fails to collect, then the amount ($220) will be evaluated for dunning depending on client’s dunning configurations.
- The next installment will be picked up by Unlimited Phone and Data on the next anniversary statement (5/1).
Use Case #2—Independent Installment
A CSR extends an offer to purchase a Google Pixel phone ($600 + 10% tax) with a 6-month independent installment.
Pre-configured steps:
- 6-month installment term (type = independent) is defined on product catalog.
- 6-month installment term is mapped to NSO offering, Google Pixel phone.
- Google pixel phone is mapped to a subscription, Unlimited Phone and Data.
An existing customer purchases a Google Pixel phone $600 (+ 10% tax) with 6-month independent installment which starts on 4/1/2024:
- An order for $660 is created.
- On 4/1/2024, an installment schedule is created during the invoicing process; the order is invoiced (invoice# 111) for the whole amount: ($660), only $110 is due.
- An installment schedule is created on the backend.
Google Pixel Installment Schedule #12345
| Date | Seq. No. | Installment | Paid | Notify Date | Due Date |
|---|---|---|---|---|---|
| 4/1/2024 | 1 | 110 | 110 | 4/1/2024 | 4/1/2024 |
| 4/1/2024 | 2 | 110 | 0 | 5/1/2024 | 5/1/2024 |
| 4/1/2024 | 3 | 110 | 0 | 6/1/2024 | 6/1/2024 |
| 4/1/2024 | 4 | 110 | 0 | 7/1/2024 | 7/1/2024 |
| 4/1/2024 | 5 | 110 | 0 | 8/1/2024 | 8/1/2024 |
| 4/1/2024 | 6 | 110 | 0 | 9/1/2024 | 9/1/2024 |
- The account total balance is updated with the whole amount ($660), and the current balance due is updated only with the installment due ($110).
- A customer will be notified via new client communication on the notify date.
- If a $110 installment is due immediately, then a payment is collected. If successful, a payment is applied to invoice# 111, and the installment schedule is updated. The statement is marked with a new statement status: installment due paid.
Use Case #3—Installment Customization with Installment Amount and Last Amount Threshold
A customer purchases ‘Google Pixel’ with installment, during the call with the salesperson, she asked to only pay $85/month (tax inclusive) for the installment. The purchase will be invoiced on anniversary along with her monthly subscription of ‘Unlimited Phone and Data’.
Preconfigured steps:
- 3-month installment term (type = aligned) is defined on product catalog.
- 3-month installment term is mapped to NSO offering, Google Pixel phone: $545 with 10% tax.
- Google pixel phone is mapped to a subscription, Unlimited Phone and Data.
On the anniversary, the purchase will be invoiced for the full amount but only the 1st installment is due on the customer's statement.
| Rate | Tax | Total | Due | Note | |
|---|---|---|---|---|---|
| Unlimited Phone and Data | $50 | 10% | 55.00 | $55.00 | No installment |
| Google Pixel | $545 | 10% | 599.50 | $85.00 | 1st installment due |
| $140.00 |
Installment schedule #333 is created for Google Pixel installment.
| Sequence Number | Principal | Principal Tax (@10%) | Total Due |
|---|---|---|---|
| 1 | $77.27 | $7.73 | $85.00 |
| 2 | $77.27 | $7.73 | $85.00 |
| 3 | $77.27 | $7.73 | $85.00 |
| 4 | $77.27 | $7.73 | $85.00 |
| 5 | $77.27 | $7.73 | $85.00 |
| 6 | $77.27 | $7.73 | $85.00 |
| 7 | $77.27 | $7.73 | $85.00 |
| 8 | $4.09 | $0.41 | $4.50 |
| $599.50 |
If the company has a policy to set the last installment amount threshold to 10%, this means the last installment amount can be up to 10% greater than the regular installment ($93.50, in this example) then, the installment sequence #7 and #8 will be combined. The installment schedule will look like this:
| Sequence Number | Principal | Principal Tax (@ 10%) | Due |
|---|---|---|---|
| 1 | $ 77.27 | $ 7.73 | $ 85.00 |
| 2 | $ 77.27 | $ 7.73 | $ 85.00 |
| 3 | $ 77.27 | $ 7.73 | $ 85.00 |
| 4 | $ 77.27 | $ 7.73 | $ 85.00 |
| 5 | $ 77.27 | $ 7.73 | $ 85.00 |
| 6 | $ 77.27 | $ 7.73 | $ 85.00 |
| 7 | $ 81.36 | $ 8.14 | $ 89.50 |
| $ 599.50 |