If you need to adjust your agreements so that the customer is not charged for a certain period of time, this guide should help you make the necessary configurations in Operate.
The steps explained here are applicable to both new and existing Licences.
IMPORTANT: This method is not recommended for licences set to autorenew, Our team is currently looking into potential ways to pause memberships and ensure the licence renews correctly. For details, please read the section below, regarding licences on autorenew.
Pausing a membership as described here will not reflect in Occupancy Reports, which will not show the free period you grant. Instead, they will show the regular rent you are supposed to earn in a specific month. Please see Section #4, below, for details.
The procedures below are not recommended for your usual activity; but rather as temporary solutions for special situations.
Please also keep in mind that the procedures below involve editing active Licences and staff will need to have the security access to do so. Administrators can enable the 'Can Edit Activated Licences' permission from the User record, for any staff member who should be able to make changes to active agreements.
Please note that the 'Discount' field on Licence items will not display if List Price Discounts are not enabled. This will not affect your ability to go through these steps.
In order to avoid affecting Occupancy Reports, it will be necessary to add negative charges for the products/services that you want to pause billing for. The process is slightly complex; however it has some benefits:
Customer balances are adjusted correctly and most reports and financial exports will be accurate (There are some implications, please see Section #4, below.)
It is possible to add clarifications on the invoice, related to the pause period. You will have a second invoice line which will add a negative product price to zero-out the invoice total. This line is where you can add a text reference related to the reason of the discount.
You can pause memberships anytime, regardless of the billing schedule.
Below are some possible scenarios that you might encounter, accompanied by the steps to follow in Operate.
1. Granting a free pause with no later charges
This procedure entails granting customers a free rent period for which your organization will not charge later. Customers will be issued an invoice; however they will not be charged (the invoice will be 0).
If you need help setting up an overall Licence, please check our dedicated Knowledgebase section for details.
To configure a membership billing pause on a new Licence:
Edit the Licence you need to adjust.
Add an Office/Service.
Add a duplicate Office/Service item, where you select the same product, but this time adjust the schedule so that it only includes the period which you would like to provide for free. It does not matter if this period is at the beginning or the middle of the customer's billing schedule (in the main Office item, which you should be able to distinguish i.e.: by billing dates or deposit). Also adjust the price of the Office/Service and enter it in a negative value. For example,. if an Office costs £500 per month, then you will enter -500 in the Monthly Price field. You will notice that the Discount field will automatically adjust to double the price - this is normal. Adding a second Licence item with a negative price ensures that the customer's Account Balance does not distort and the normal billing schedule resumes as soon as the schedule of this second item ends.
You can use the 'Reference' field to make clarifications that will display on the Invoice itself. For example, you can add 'Discount' or 'Rent offset' to the item with the negative charge to clarify why this is on the invoice. Feel free to use this field for any text you may need to make it easier for your customers.
For example, if your customer starts renting from 24/03/2020 and you want to fully discount the first four months, simply add the Office to the Licence twice and set the second Office item 'Date From' field to 24/03/2020 and the 'Date To' field to 24/06/2020. On this second Office item, enter the price in negative, for the entire schedule. The two Licence items will balance out the charge to 0. Here is what they would look like:
Once the schedule on the second item ends, regular billing will resume.
Please also keep in mind that you may need to consider changes to your Invoice Template for the reference field or products to show as desired.
2. Delaying the billing and charging for the delay period later
This procedure refers to pausing billing for a member, but charging them later.
To do this, you can start by going through the steps in Section #1 above to configure the period for which you would like to delay billing. This ensures that the customer is not billed throughout that period. They will be issued an invoice; however they will not be charged (the invoice will be 0).
Next, you can set up a billing schedule for the months after the pause, which can be whenever you may want to reinstate billing and recover delayed charges.
IF you have used the setup in Section #1, then normal billing will resume after the pause ends. This ensures that the customer is charged for the normal rent schedule but it does not recover the revenue that has not been collected during the pause.
To charge the customer for this period at a later date, add a third record of the Office/Service to the Licence. Enter the months between which you would like to add the charges. Depending on how you agree with the customer, these can be the same amount of months as the pause period, there can be fewer or more. You will need to make price adjustments accordingly. (i.e.: You might want to break down a 3-months charge into 6 months or sum up 6 months in 3). Below is an example where we are adding a charge for the same amount of months and the same regular price.
Doing this means that the customer is billed on 0 for the pause period and twice for two identical (or different) amounts during the revenue recovery period: once for the regular rent and once for the delayed charges. You can use the Reference field to make clarifications that will display on the Invoice itself. For example, you can add 'Discount' or 'Rent offset' to the item with the negative charge to clarify why this is on the invoice. Feel free to use this field for any text you may need, to make things clear for your customers.
Please note that the 'Discount\ field on Licence items will not display List Price Discounts not enabled. This will not affect your ability to go through these steps.
Example Licence Schedule with Delayed Charges
The table below shows the billing schedule for a Licence with delayed charges for the first four months. The recovery is done month by month, with a double charge of the regular rent price, for the next four months. In the nights month, the normal billing schedule resumes and the customer is only charged the regular rent price.
3. Implications for Licence Approvals
Applying this discount procedure could trigger more approval requests than usual. Your organization may need to adjust relevant policies to make this process run smoother. Requests could occur both for new Licences and for existing ones which are being edited and discounted. Otherwise, the approval process works as expected.
4. Implications for Licences on Autorenew
The method described here is not recommended for licences set to autorenew. This is because the zero-ed out charges will renew as well.
If you still decide to use this method or have used it already, you can rectify the charge by deleting the product records with the negative price. We recommend deleting the item right after the licence autorenews. Deleting it before could potentially cause billing discrepancies.
You can create a list of licences on autorenew using a List view or a Report based on the Licences module, to either of which you can simply add the following filter:
Auto Renew Licence on End Date equals True
5. Implications for Reporting and Exports
Choosing to use any of these procedures might impact either your reporting or exports.
Billing pause periods will not be reflected in Occupancy Reports. These will continue showing the revenue that the space is supposed to earn for the month and therefore will not show months with 0 revenue. They will; however, reflect the extra charges that are added after the pause. For instance, considering the example schedule above, in Section #2: The office costs £1,000/month. If from March to June you are discounting to 0 and recovering the revenue from July to September in equal £1,000 installments, then the report will show £1,000 from March to June and £2,000 from July to September. The subsequent months will be displayed normally; with the £1,000 regular rent price. As you can see, the -£1,000 charges added from March to June are not reflected.
Financial exports might have issues with negative charges. From our experience so far, these could be Sage Line 50 (will show negative charges as 'SC' - Standard Credit Note - and will turn the amounts to positive) and Xero (does not accept negative charges).
Reporting on the products and services you pause billing for
As long as you use the Reference field to enter relevant text on the products/services you pause billing for, it is easy to create a report that lists them all. Please see Creating a New Report in essensys Operate if you need assistance with the basics. Please also keep in mind that in order to create a report, you need to have security access to the Reports module. Admins can enable reports in Security Groups
The report will need to be created by expanding Invoices then choosing Invoices and Invoice Lines in the module selection list.
Next, the report editor will open. Here, please search for the word 'reference'., using the search box to the right of the report preview. Here, under 'Invoice Lines', you will find the 'Reference Text' field. Please click this field and trag it onto the preview, in the position you need.
You can use the same process to add any other fields you may require.
You can save this report for later use as well.
Please remember that this allows you to track rent relief / products/services with paused billing; however it skews the data in Occupancy Reports and Financial Exports, as discussed above.