Setting Component Allocations

Setting Component Allocations

Reference

Setting Component Allocations

In order for Chargify to assess charges for your Components, you must report to us the Component’s status (i.e. quantity used or allocated, or whether the feature was enabled or not) for each Subscription.

In the UI, you can perform each of the following actions for a component:

  • View Usage History: View the amount and dates when a component has been used.
  • Record Usage: Make note of recent usage for the billing period
  • Change Global Component Pricing/Details: Change the name, description, unit price, etc. of a component.

Components are billed in advance, on the same billing cycle as the product they are associated with. If your Customer subscribed to the parent Product on the 23rd of the month, then he’ll get billed for any Components on the 23rd of each month, assuming the product is on monthly billing cycle. Chargify simply looks at the quantity on the billing date and then bills accordingly.

The exception to advance billing is Metered Components, which are billed in arrears according to the usage recorded during the billing period.

Future releases may allow for averaging of the count, “high-water mark”, 95th percentile, etc. There are a number of approaches we’ve heard about that will be interesting to consider.

Reporting Metered Component usage

For Metered Components, you record the amount your customer uses some “widgets” (units). At the end of the billing period, Chargify will bill your customer for the total number of widgets reported, and then we will reset the widget count to zero and the whole process starts over for the new billing period.

Note: this differs from Quantity-based Components, which DO NOT reset to zero at the start of every billing period.

You can report metered usage in the Admin UI by navigating to a subscription and selecting the “Components (Line-Items)” tab. This will display a list of all the available components.

Click the ‘Ops’ button to reveal the context navigation and click the ‘Record Usage’ link.

Enter a quantity and (optionally) a memo, and press ‘Record’. The quantity must be an integer (whole number).

Note that if you enter a decimal amount for the quantity, it will be silently truncated (not rounded). For example, if you enter 5.5, it becomes 5.

All recorded usage for a billing period will be tallied and charged at the end of the period.

Reporting Quantity-based allocations

For Quantity-based Components, you can record when your customer changes the quantity of “widgets” (units) being utilized, but the assumption is that those widgets stay in use by your customer forever, until some future change.

A common use-case is software license fees, where you want to collect $100/month for each employee of your customer who accesses your service. So you might set the quanity to 3 and Chargify will bill your customer $300 every billing period until you change the quantity.

Note: this differs from Metered Components, which DO reset to zero at the start of every billing period.

Quantity component allocations can be updated using the Admin UI by selecting the component from the “Components (Line-Items)” tab when viewing a subscription.

Reporting On/Off component status

On/Off components can be toggled using the Chargify UI by selecting the component from the “Components (Line-Items)” tab when viewing a subscription.

Proration

Chargify supports proration for Quantity-based and On/Off components. Depending on your ‘proration scheme’, changes to the allocated quantity during a period will result in either a charge or a credit to the subscription.

Note that proration is done based on the length of the current billing period for the subscription, not the billing period configured for the product.

If you modify the Next Billing Date, you may need to calculate and apply any prorations manually for that billing period.

Similarly, if you have a trial period that is not the same length as the product’s billing period, then you may need to calculate and apply any prorations manually during the trial period.

Proration ‘Upgrades’ vs. ‘Downgrades’

When changing the allocation of a component, Chargify considers the change an ‘upgrade’ if the new computed cost is greater than the previous cost, and a ‘downgrade’ if it is less.

Proration Schemes

The action that Chargify takes when a prorated allocation occurs is called the ‘proration scheme’. The default scheme is defined under Site Settings, but it can also be overriden at the time that the allocation is created. Because it is often unclear at the time whether the change will be an upgrade or a downgrade, you will set both schemes when the allocation is created.

Proration Scheme Types

  • Prorate + Accrue (prorate-delay-capture): A charge is added for the prorated amount due, but the card is not charged until the subscription’s next renewal

  • Prorate + Process (prorate-attempt-capture): A charge is added and we attempt to charge the credit card on file. If it fails, the charge will be accrued until the next renewal.

  • Full Cost + Process (full-price-attempt-capture): A charge is added for the full price of the component change, and we attempt to charge the credit card on file. If it fails, the charge will be accrued until the next renewal.

  • Full Cost + Accrue (full-price-delay-capture): A charge is added for the full price of the component change, but the card is not charged until the subscription’s next renewal.

  • No Cost Change (no-prorate): No charge is added.

The available ‘downgrade’ schemes are:

  • Prorate: A credit is added for the amount owed.

  • No-prorate: No credit is added

NOTE: Proration uses the current price of the component as well as the current tax rates. If either has changed since the beginning of the period, then you may want to calculate the amount and apply the proration manually by adding a charge or credit to the subscription.

Viewing Component Usage History

You can easily view the past month’s usage per component by selecting View Usage History.

Updating Component Quantities

Each Chargify Site defaults the proration setting to prorate + accrue.

Update Quantity is signifigantly different than Record Usage in the UI. When you are updating a quantity, this is specifically for a quantity-based component. This is often confused with Record Usage which is only for metered components. The true difference is metered components reset to zero at the beginning of each billing period.