Invoice Discount Component
- Mahnoor Khan (Deactivated)
- Greg Walsh
Summary
This article describes the Invoice Discount Component and how to configure it.
The Invoice Discount Component allows you to add a fixed or percentage discount to an invoice based on Tiers that you configure. Tiers can be specified as an amount (if $100 is charged apply a 5% discount, if $150 is charged apply a discount of 7%, etc.) or as of EngageIP 8.5.25.2 Tiers can be setup based on service count (volume purchase discounts). There is no limit to the number of Tiers you can configure.
Once a Tier has been reached the amount to be discounted is determined using Conditions you set. For instance if the first Tier was reached and the Tier was setup to provide a 10% discount, the Conditions you set on the Invoice Discount Component could be calculated based upon:
'All Services' billed for on the invoice. For instance if charges for every Service on the invoice for the period totaled $1,000.00 the customer would get a $100.00 invoice discount
One or more services. For instance if 'Service A' and 'Service B' totaled up to a charge of $400.00 then the customer would get a $40.00 invoice discount
All usage charges or charges only in relation to a certain class of usage (data, long distance calls, etc.)
Usage charges for a particular service (a data service, mobility service, etc.)
Any combination of the above (e.g. apply usage for all services and all usage or more granular service/usage combinations)
Applying the Discount
Discounts can be applied at the invoicer / parent level or child /sub account levels as need for granularity. They do not need to be on the account with invoices specifically.
The discount transaction is calculated and applied ONLY when the invoice is closed. At that time, EngageIP will calculate the discount, add the transaction and render the invoice to display it. If the invoice is opened and closed again, it will remove the discount transaction and recalculate and apply the discount again. For more information on how discounts are reapplied when closing and re-opening an invoice see the Reopening Invoices section below.
Notes:
The discount is applied to the total amount BEFORE taxes. The tax amount is NOT calculated.
Negative fixed or percentage values are not supported
Credits issued to an invoice are subtracted from the sum of the services that the discount is associated to (where the credit is associated to the same services in the invoice discount configuration) prior to the calculation being done.
Example:
Sum total of Services as selected in invoice Discount configuration (without taxes) - Sum total of credits associated to the Invoice Discount configuration * Percentage discount = Invoice Discount $
When to use the Invoice Discount Component
The Invoice Discount logic is similar to the discounts on user packages. You would use the Invoice Discount Component instead of the Package Discount Component if you needed tiered pricing discounts related to certain thresholds of business per period or if you simply want to provide an overall promotional discount that displays to the customer as a discount. The Invoice Discount Component will also display the discount on the invoice, for package discounts the discount applied is not automatically shown on the invoice (invoice template changes are required to display the package discount detail). Also package discounts are granular (applied per package/service) where as the invoice discount component is account wide/multi-service.
Definitions of Invoice Discount Fields
The below fields are displayed when loading the Overview page of an account and selecting Add -> Invoice Discount under the Components heading (required fields are in red)
Name - this is the internal name of the discount, displayed to internal staff using EngageIP
Inactive - this check box can be selected to disable the invoice discount (the component will remain on the Overview page of the account so that it can be re-activated as needed)
Invoice Detail - this is the text that will appear on the invoice next to the discount amount. This text should describe the discount e.g. "Purchase Discount", etc.
Service - this defines the associated service which will be used to determine the General Ledger code (GL Code is a component at the service level) and ties into the resulting StatementDetails (used in various ways throughout EngageIP)
Conditions
Conditions define the service/usage charges to be used to determine if a Tier has been reached (more on Tiers below). Conditions also determine what services the invoice discount applies to, for example:
Package 1 is added to the customer account, the package contains 'Service A' and 'Service B'
The monthly charge for Service A is $50 and $100 for Service B
An Invoice Discount Component is setup with a Condition set as "Service A" and a single Tier configuration indicating that $50 worth of charges (the Threshold) should yield a 5% discount
When the invoice on the customer account is closed the Invoice Discount is determined as follows:
The Condition is met (Service A is being billed on the account in this billing period)
The Tier is met (the charge for Service A is $50, this reaches the Tier 1 threshold set at $50)
The Discount is calculated based on the services specified under Conditions (a 5% discount is applicable for Service A only, 5% of $50 = a $2.50 invoice discount, which will appear on the closed invoice)
Conditions are based on OR logic, so you can create a list of conditions and if ANY of them are true, a discount will be applicable (assuming one of the Tiers detailed below are met). If no conditions are added then discounts will not be calculated.
The options for Conditions are:
Service - use the charges for a particular service, multiple services (by creating multiple conditions) or for all services on an account when seeing if a Tier has been met and also when calculating the discount amount
UDR Class - use usage charges for a particular type of usage (calls, sms, data, etc.) or for all usage on an account (All UDR Classes) when determining if a Tier has been met and also when calculating the discount amount
Usage for Service (New in EngageIP 8.5.16.0) - use all usage charges related to a particular service on an account (for instance all usage charges for a particular voice service on an account) when determining if a Tier has been met and also when calculating the discount amount
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Tiers - as noted above Tiers evaluate conditions (charges for services, usage, services & usage) and based on the charged amount determine if a Tier has been met. Tiered discounts can be a Fixed dollar value or a Percentage discount. The Percentage discount amount is calculated against the services/usage conditions specified. The image below shows configured Tiers.
Given the Tier's above if the charges for services and/or usage defined in the conditions reaches $10 the user will receive a 1% discount on the total charges for the services specified under Conditions. If the total charges reach $100 the user will receive a 2.5% discount on the services specified under conditions, and so on. This functionality encourages customers to purchase in bulk. You don't need to setup more than one tier and you can add any number of tiers as needed.
Discount by Percentage Example
Percentage Scenarios
Providing an account wide promotion of 10% off:
Enter a name
Enter the invoice detail (discount description to appear on the invoice)
Set the condition to 'All Services'
Set threshold to $0
Set discount = 10%
Providing a tiered wholesale discount for large customers:
Enter a name
Enter the invoice detail (discount description to appear on the invoice)
Select a service if you want to narrow down what the user must purchase to acquire the discount and what service the discount is applicable to, otherwise set the condition to 'All Services'
Setup Tiers similar to the image above. This means:
If the charges for the services under conditions totals up to $10 but is less than $100, the customer will receive a 1% discount on the charges relating to services/usage listed under Conditions
If the total reaches $100 but is less than $1,000 the customer will get 2.5% discount on the specified services
If the total reaches $1,000 or more the highest level discount of 10% will be applied against the services specified
Providing a discount for a specific type of usage:
Enter a name
Enter the invoice detail (discount description to appear on the invoice)
Set a condition to UDR Class in the drop down list, select the name of the UDR Class you want to provide a discount for (for example 'Long Distance')
Set the threshold to $0 to give a discount for any usage of the class you just specified in conditions
Providing a discount for all usage and all services:
Enter a name
Enter the invoice detail (discount description to appear on the invoice)
Set a condition to UDR Class > ALL UDR Classes in the drop down list
Set a condition of Services > All Services
Set threshold to $0 if you wish to automatically grant a discount (e.g. 10% off all service and usage charges on the invoice)
Discount by Fixed Amount
Fixed amount discounts like percentage discounts require a Condition to be met for Tiers to be checked (in the example below 'DSL Service' must be charged on the invoice for the Tiers to be evaluated, if no DSL Service is billed for then no discount is applicable when the invoice is closed). If the condition is met and a tier is reached the invoice discount will be the discount amount specified for the Tier ($0.10, $2.50 and $100.00 in the example below).
Discount by Service Count / Volume
As of EngageIP 8.5.25.2 it is possible to discount based on the number of billed services on an account. This permits discounts to be awarded based upon the the volume of services purchased. Volume discounts are compatible with the Bulk Package Component, meaning bulk package quantities configured on an account will be considered when calculating tier thresholds.
To setup a discount based on service count do the following:
Load the EngageIP account you wish to add the discount on
Under Components click Add and select Invoice Discount
Populate the initial fields
Name - this is the internal name of the discount, for instance 'Volume Discount'
Inactive - this check box can be used to turn this discount on or off
Invoice Detail - this is the text that will appear on the invoice next to the discount amount. This text should describe the discount e.g. "Volume Discount"
Service - this defines the associated service which will be used to determine the General Ledger code (GL Code is a component at the service level) and ties into the resulting StatementDetails
Set the Tier Type Calculation to Count
On the left side specify the Amount Conditions (the Amount Conditions indicate which services the discount will be calculated against, for example if this is set to 'All Services' then the Tiered discount value will be applied to all service charges on the invoice)
On the right side of the page click Add Count Condition
Enter the service you wish to use as the condition. 'All Services' will count up all services on the account, a specific service or services (using multiple conditions) will total up the services you have selected when determining if a tier has been met
Configure discount tiers based on the volume of services the customer must reach (sample below)
Click Save when finished
Given the Count Conditions and Tiers in the images above the invoice discount would be as follows:
If Services A & B on the account totaled up to one hundred active services when the invoice was closed, the total charges for all services on the invoice would be discounted by 10 percent
If Services A & B on the account totaled up to one thousand active services when the invoice was closed, the total charges for all services on the invoice would be discounted by 15 percent
If Services A & B on the account totaled up to twenty-five hundred active services when the invoice was closed, the total charges for all services on the invoice would be discounted by 20 percent
Multiple Invoice Discounts
Multiple Invoice Discounts will discount on top of the discounted amount if the Service specified under 'Conditions' matches the additional invoice discount components. For example:
Two Invoice Discount Components are setup, the first with an 'Amount' condition the second with a 'Count' condition:
invoice discount component #1
Condition: Service > Service A
Tier Type Conditions: Amount
Tiers $100 threshold with a 10% discount
invoice discount component #2
Condition: Service > Service A
Tier Type Conditions: Count
Tiers 50 count threshold with a 10% discount
If both conditions above are met ($100 or more is charged in the period for 'Service A' and a total of fifty or more Service A services are active on the account when the invoice is closed) and the charge for Service A on the invoice is $200, then the discount will be 10% of $200 ($20) for the first invoice discount calculated and then 10% of $180 ($18) for the second invoice discount calculation, making the final discount displayed on the invoice $38.
If the conditions differ on the invoice discount components or the condition is set to 'Services > All Services' then the discounts will not be calculated on top of each other.
Note: Invoice discounts are executed in alphabetical order based on the NAME of the invoice discount. If you have multiple discounts crossing over the same services and want one applied before the others, be sure to name them correctly e.g.
"1 - Discount for all services"
"2 - Discount for Long Distance"
You can use the "Invoice Detail" portion of the invoice discount configuration to have the invoice display a more user friendly discount name (e.g. "Courtesy Discount for service" etc.)
Reopening Invoices
When opening and closing a previously closed invoice on a customer account, the percentage or fixed discount applied will be based on the current tier configuration of the Invoice Discount component on the account, not the historical discount value. Â For example:
In March an Invoice Discount component is added to a customer account and set at certain tier to apply a 10% discount on all services.
In April the Invoice Discount component on the account is modified and the tiered discount value is changed to 20% off on all services.
In April the March invoice is re-opened and then closed again. At the time of closure the discount will be re-calculated based on the current invoice discount component configuration (i.e. if the tier was initially met in March, then a 20% discount will be applied to the March invoice instead of the original 10% discount).
To adjust for a discount that should not have been applied you can add a debit/credit. See the Managing Transactions article for instructions on applying these transactions.