Getting Started on Relationship Invoicing

Relationship Invoicing is different in many ways from the legacy architecture using statements; this guide is to help compare the workflows between the two and provide next steps on setting up the new architecture.

New Terminology

  • Invoice Billing has become Manual / Remittance
  • Customer hierarchies are a hierarchical structure of customers. For example, there may be a grandparent customer with two children, who each have two children of their own.
  • Subscription groups are a collection of subscriptions who are being billed together on a single invoice. To be eligible to be added to a subscription group, the corresponding customer records must be within the same hierarchy. However, not all customers in a hieararchy are required to be in the same group.
    • The primary subscription is the first member of the group. They control when the group as a whole renews.
    • The member subscriptions of a group can renew before the primary does.
    • When a member renews, an individual invoice segment is opened in a pending status to be opened once the group as a whole renews.
    • When a subscription group renews, it issues a consolidated invoice that consists of all the primary subscription’s charges along with any pending segments from member invoices.
  • WhoPays refers specifically to the ability for a subscription group to be paid by someone within the customer hierarchy. A parent company may pay for each of its offices in different locations.
    • Payer is the person who pays for a particular group. They may have their own subscription, or they may just be a single customer record.

Additionally, all subscriptions will now generate an invoice, regardless of whether they are on automatic or remittance billing. In the past, an automatic subscription relied on a statement, whereas an invoice billing subscription had an invoice.

Legacy Actions and their New Equivalents

One of the largest changes to Relationship Invoicing is that actions are made against invoices; previously, the legacy architecture made actions against the subscription balance. One example is the idea of making a negative balance adjustment against a subscription. In Relationship Invoicing, “adjustments” should be be thought of as adding a charge or credit to an issued invoice.

The old balance system could cause confusion, particularly when it came to invoice billing. Negative balances that were made against the subscription could potentially never appear on an open invoice. By targeting the invoice directly for each change, this issue is eliminated entirely.

Here is a list of old subscription actions and how they can be accomplished in the new architecture.

  • Add a one-time charge
    • BEFORE: from the subscription, go to Subscription Actions > Add Charge
    • NOW: from the subscription, go to Invoices > Create New Invoice
Differences in performing a one-time charge.
  • Apply a positive balance adjustment
    • BEFORE: from the subscription, go to Subscription Actions > Adjust Balance > Increase the subscription’s balance by…
    • NOW: from the subscription, go to Invoices > Create New Invoice
Differences in performing a positive balance adjustment.
  • Apply a negative balance adjustment
    • BEFORE: from the subscription, go to Subscription Actions > Adjust Balance > Decrease the subscription’s balance by…. The subscription would be left with a negative balance if the balance adjustment exceeds the current subscription balance.
    • NOW: from the subscription, go to Subscription Actions > Give/Deduct Service Credit > Give Credit. While this action won’t decrease the subscription balance, it will automatically apply the credit at the next applicable renewal.
Differences in performing a negative balance adjustment.
  • Process a refund
    • BEFORE: from the subscription, go to Subscription Actions > Process Refund
    • NOW: from the subscription, go to Invoices > click on the paid or partially paid invoice with the charge that should be refunded > More Options > Refund Invoice > Refund Payment to Payment Profile
  • Process an external refund
    • BEFORE: from the subscription, go to Subscription Actions > Process External Refund
    • NOW: from the subscription, go to Invoices > click on the paid or partially paid invoice with the charge that should be refunded > More Options > Refund Invoice > Record External Refund
Differences in performing refunds.
  • Record external payment on an automatic subscription
    • BEFORE: from the subscription, go to Subscription Actions > Process External Payment
    • NOW: from the subscription, go to Invoices > click on the open invoice that should be paid off > Record Payment > Record External Payment. Note that this will only be possible if the subscription is past due.
Differences in recording an external payment on an automatic subscription.
  • Recording an external payment on a remittance subscription
    • BEFORE: from the subscription, it was possible to record a payment both 1) from Subscription Actions and 2) by clicking Actions > Enter Payment on the invoice itself. Paying the subscription would affect the balance but not any invoice directly; the latter was accomplished by applying the payment to the invoice.
    • NOW: The payment must be applied directly to the invoice. Follow the steps from “Record external payment” above
The old way to record an external payment on an invoiced subscription.
The new way to record an external payment on a remittance subscription. Note that this menu also allows for credit card payments.
  • Apply a payment that will go towards the next billing. In both cases, the payment would be collected outside of Chargify, but they differ in how the payment is recorded on the subscription.
    • BEFORE: from the subscription, go to Subscription Actions > Process External Payment. If payment exceeds the current balance, it will leave a negative balance on the subscription to be paid forward at renewal.
    • NOW: from the subscription, go to Subscription Actions > Record Prepayment
Differences in recording prepayments.

Enabling Relationship Invoicing

Relationship Invoicing is an opt-in feature for new sites. The ability to enable Relationship Invoicing on existing sites will come later.

We recommend doing extensive testing to make sure you understand how your billing flows and customer communication behave with Relationship Invoicing. Even though most of the APIs are compatible and much doesn't change, enough does change that you will want to ensure you understand all of the implications before going live.

Review Your Invoice Settings

Your first task in Relationship Invoicing is to review the settings (via Settings -> Invoices) to configure how you want your invoices to look and act.

We recommend the following first steps:

  1. Upload a logo to display on your invoices
  2. Pick your default collection method, automatic or remittance. Automatic collection attempts to collect automatically from the card on file (or ACH, if enabled), whereas remittance collection prompts the customer for payment, which get recorded against the invoice by a human
  3. Turn on invoice emails for both automatic and remittance collection
  4. Customize your email templates for emails that are sent when invoices are issued

Generate Some Subscriptions

Create a product or two and, optionally, some components. Then, create some subscriptions using your own email address and watch the invoice emails roll in!

Some suggestions:

  • View the invoices online and see how they will be presented to your customers.
  • Tweak your invoice settings to refine the experience for your customers
  • Add some coupons and see how discounts are presented