In this guide, we’re going to break down how Ezypay understands and configures a subscription based on the Payment Plan rules used when activating subscriptions.
This guide is specifically for Ezypay Payment Plans and does not apply to One-Off Payments.
Settings
Finance
Ezypay Payment Plans
Scenario 1: Why has the plan skipped a month?
In this scenario, we’re using a Payment Plan that bills monthly on the first of every month. The same logic can be applied to once-weekly plans.
Payment Plan Rules;
- First Billing: Full Amount
- Billing Frequency: 1 Monthly
- Billing Start: Day of Month 1
Subscription information;
- Invoiced Amount: $1600
- Subscription Start Date: 23rd January
- First Billing Amount: $500
- Billing Amount: $550
Based on the above information, this is the expected outcome.
- First Billing Date: 23rd January
First Billing Amount: $500
Billing Cycle: 23rd January - 22nd February - 2nd Billing Date: 1st March
2nd Billing Amount: $550
Billing Cycle: 1st March - 31st March - 3rd Billing Date: 1st April
3rd Billing Amount $550
Billing Cycle: 1st April - 30th April
As we can see in this scenario, the subscription has skipped 1st February. This is due to the First Billing Date sets the first Billing Cycle to 23rd January - 22nd February.
With the first billing cycle containing the first occurrence of a ‘1st of month’, it is unable to bill the next cycle within any other billing cycle. This then forces the plan to set the 2nd billing date & cycle to begin on the next ‘1st of month’, which is 1st March.
Scenario 2: Why has the plan skipped multiple months?
In this scenario, we’re using a Payment Plan that bills every 2 months on the first of every 2-month block.
Payment Plan Rules;
- First Billing: Full Amount
- Billing Frequency: 2 Monthly
- Billing Start: Day of Month 1
Subscription information;
- Invoiced Amount: $1700
- Subscription Start Date: 23rd January
- First Billing Amount: $500
- Billing Amount: $550
Based on the above information, this is the expected outcome.
- First Billing Date: 23rd January
First Billing Amount: $500
Billing Cycle: 23rd January - 22nd March - 2nd Billing Date: 1st May
2nd Billing Amount: $550
Billing Cycle: 1st May - 30th June - 3rd Billing Date: 1st July
3rd Billing Amount $550
Billing Cycle: 1st July - 31st August - 3rd Billing Date: 1st September
3rd Billing Amount $100
Billing Cycle: 1st September - 31st October
As we can see in this scenario, the subscription has skipped 1st March & 1st April. This is due to the First Billing Date sets the first Billing Cycle to 23rd January - 22nd March.
With the first billing cycle containing the first occurrence of the next 2-month block (1st March), it is unable to bill the next cycle within any other billing cycle. This then forces the plan to set the 2nd billing date & cycle to begin on the next 2-month block, which is 1st May.
Scenario 3: Why was the First Billing Amount not the specified Billing Amount? (Prorate)
In this scenario, we’re using a Payment Plan that utilises the Prorate rule for “First Billing”.
Payment Plan Rules;
- First Billing: Prorate
- Billing Frequency: 1 Monthly
- Billing Start: Day of Month 1
Subscription information;
- Invoiced Amount: $1000
- Subscription Start Date: 8th January
- First Billing Amount: $0
- Billing Amount: $100
Based on the above information, this is the expected outcome.
- First Billing Date: 8th January
First Billing Amount: $177.42 (This value will differ for Leap Years)
Billing Cycle: 8th January - 28th February - 2nd Billing Date: 1st March
2nd Billing Amount: $100
Billing Cycle: 1st March - 31st March - 3rd Billing Date: 1st April
3rd Billing Amount $100
Billing Cycle: 1st April - 30th April - Last Billing Date: 1st November
Last Billing Amount $22.58
Billing Cycle: 1st November - 31st November
As we can see in this scenario, the subscription has skipped 1st February. This is due to the First Billing Date sets the first Billing Cycle to 8th January - 28/29th February.
With the first billing cycle containing the first occurrence of a ‘1st of month’, it is unable to bill the next cycle within any other billing cycle. This then forces the plan to set the 2nd billing date & cycle to begin on the next ‘1st of month’, which is 1st March.
The reasoning behind why the first billing amount is greater than $100 is due to the usage of “Prorate” for the “First Billing” setting of the payment plan.
The calculation uses a day rate for the first partial month + first full month to calculate the amount.
- Day Rate Calculation:
January has 31 days
Day Rate for January = $100.00 / 31 = $3.2258. - Prorated Amount Calculation:
For January 8th to January 31st (24 days)
Prorated Amount for January = $3.2258 × 24 = $77.42 (rounded to 2 decimals). - Total Calculation:
The Prorate Amount ($77.42) from above, plus one expected ongoing amount ($100) $77.42 + $100 = $177.42