If a subscription paradigm encompasses advance payments for a specific number of future terms in a subscription, it is an advance invoice. Generally, it is used to ensure that shipping will be punctual or conform to a rapid hike in the demand for a non-renewing subscription.
In case you are operating a business model where advance invoicing is needed, this option will help you to maximize your billing flow with advance invoices that will work for both your customers and you.
Invoices vs. Advance Invoices
The difference between an advance invoice and a regular invoice is that with the help of advance invoice merchants can collect payments for one or more terms at a time in a subscription. Hence, there is not much difference between an advance and a regular invoice.
In ChargeMonk, the same as the other invoices, an advance invoice will integrate scheduled changes for subscription, one-time charges can apply, coupons and add-ons as pertinent to the subscription, and synchronize with third party accounting assimilation applications if they have been configured with your ChargeMonk site.
On the other hand, an advance invoice encloses information regarding the subsequent billing date, which will help your customer to know when they will be charged next and the dates specifying the beginning and end of term.
In contrast to regular invoices, not more than one advance invoice can be created at a time for a subscription. A new advance invoice can be created for a specific subscription when the existing one expires. In case you wish to generate a new advance invoice for a subscription that has one already, you will have to void/delete the existing one.
Create an Advance Invoice
Via the Web Interface
Through the web interface, advance invoices can be created for current subscriptions i.e., the subscription details page. Follow the below given while you visit this page, and generate an advance invoice for the subscription:
- Go to the Subscription Details page, hit Bill Future Renewals option, placed under the Actions button to create an advance invoice for a subscription.
- Mention the number of terms you will charge for. For Example: In case you want to run a monthly based subscription service and want to bill your customer for the subsequent two terms, then you have to enter ‘2' into the Number of Renewals section.
- Evaluate the charges you want to display in your advance invoice. Every term within the invoice, coupons, add-ons, taxes and promotional credits will be shown as a separate line item imposed according to your configuration of them.
- Evaluate the taxes, terms and added items including coupons and add-ons in the invoice and hit Generate to end the process.
Via the API
To create an advance invoice for current subscriptions by passing the parameter of terms_to_charge with the below given API calls:
Find the sample advance invoice for reference, note the billing period and the billing date:
How will changes in subscription affect an advance invoice?
The below given changes in subscription results in a full refund of the advance charges to the customer as a credit note:
- Changes in the renewal date/time or changes at the end of the term date/time.
- The new plans/add-ons id updated in the subscription.
- Cancellation of the subscription.
- Scheduled changes for the subscription are removed or updated.
What will happen when you make changes to the subscription:
- As a credit note, the advance charges will be refunded to the customer.
- To account for the changes made in subscription, generate a new advance invoice against it.
To demonstrate, assume that you have a subscription on a monthly basis that is set for renewal every month on the 1st.
On Jan 10, you generate an advance invoice for the subsequent term, which is from 1st of Feb to the 1st of March. In case, now you want to change this renewal date to the 15th of every month from Feb onwards, the outcome of these changes will be a refund of the advance charges automatically. After this, you will have to generate a new advance invoice against the new term's subscription (the 15th of Feb to the 15th of March).
Which date will be shown on the advance invoice?
The date that an advance invoice carry will be the same date on which it generates. The line items of the invoice will have the term for which it has been charged.
In case you have a subscription on monthly basis that will get renewed on the 22nd of every month, an advance invoice for the subsequent two months generated on the 22nd of Feb will carry two line items. i.e, under the Silver Plan the billing period of 22nd March to 22nd April, and under Silver Plan the billing period of 22nd April to 22nd May. Thus the Invoice date will be the 22nd of Feb.
When to create the next invoice for the subscription?
Once the completion of the term in advance invoice occurs then the next invoice of the customer will be created.
In case an advance invoice is generated for 2 monthly terms beginning on the 1st of October, generation of the next invoice be done on completing two terms i.e. the 1st of December.
ChargeMonk will not generate an invoice at every stage in subscription's lifecycle (example: from Trial to Active), in case the advance invoice has not yet expired for the subscription.
Assume that you have charged a customer for the upcoming three terms of their subscription with a trial period. As the advance invoice includes the trial period with the subsequent three months of use, ChargeMonk will not create an invoice when their subscription shifts from Trial to Active. The next invoice will be created at the end of three months only when the terms given in the advance invoice terminates.
Assume that you have generated an advance invoice for a subscription that has not yet started, so it is marked as a 'future' tag in ChargeMonk. A new invoice will not be created by ChargeMonk when the subscription shifts from Future to Active. The subsequent invoice will get raised for the subscription only when the terms given in the advance invoice terminates.
To illustrate the above example here is a screenshot -now this subscription is marked as Active. Though, checkout timeline to get an idea about when the advance invoice was generated and when will the next invoice be generated:
How to apply coupons?
In case you have the configured coupons that are pertinent to the subscription, for which the advance invoice is generated, then they will be imposed automatically. Consider that they will be imposed as they are in per term usually.
In case you are charging your customer for the subsequent three terms with your advance invoice and a coupon for $10 is pertinent to each term than a coupon amount of $30 will be imposed on the advance invoice.
One time coupons are imposed in case they are in their validity period at the time of the creation of their advance invoice for the subscription. In case of a valid one-time coupon, it will be imposed in the advance invoice to the total amount and will not be imposed per term.
In case you charge your customer for the subsequent four terms where one term costs $100 and you have a one-time coupon worth $50, which is valid at the time of the creation of the advance invoice then the coupon amount worth $50 will be imposed to the total amount of $400.
Limited period coupons
A limited period coupon is imposed only on an advance invoice if it is valid for the whole duration of the terms given in the invoice.
Creation of an advance invoice against a subscription for the subsequent five terms, where the one term is five months. In case a limited period coupon is applicable for less than 5 months from the invoice generation, it will not be imposed on the absolute invoice amount. And when a limited period coupon is valid for more than 5 months from its invoice the generation, it will be imposed on the basis of the discount type.
|Coupon Value||Coupon Validity||Duration of the advance invoice (5 terms)||Will the coupon be applied to the advance invoice?|
|$50||The next 3 months||The next 5 months||No|
|$65||The next 12 months||The next 5 months||Yes|
How to handle the dunning process?
In case, the terms in the advance invoice have not yet started and dunning is configured then the cancellation of the subscription will not happen. Instead, a cancellation scheduled will be for the end of the existing term and the complete amount will be refunded as a credit note. An adjustment credit note will be formed in case the payment has not yet been collected. But if the payment is collected partially, the amount that is collected will get refunded as a refundable credit note, while the remainder will get refunded as an djustment credit note.
In case the offline dunning is not configured, the subscription can be manually canceled if the attempts made by ChargeMonk to charge the payment method of the customer fails.
Advance invoices do not support online dunning.
1. Is it possible to modify an incorrectly generated advance invoice?
No, it is not possible to modify an already generated advance invoice. Though, you can ‘Void' the invoice and create a new one.
But, if payment has been collected already against the invoice, ensure to remove the payment before voiding the invoice.