A Billing Contract represents a billing relationship with a specific customer. Each Billing Contract defines specific attributes about its particular billing relationship such as payment terms, billing frequency, and refund policy. Since contracts are designed around recurring revenue, they also contain information about start and end date, and auto renew settings. A Billing Contract also controls settings for the invoices related to it including the invoice template, contract specific discounts, and automation settings like auto-send. Some settings that are defined at the global or account level can be overridden at the Billing Contract level. Finally, Billing Contracts are the container for the items being billed such as subscriptions, recurring services, and one-time purchases.

A customer may have more than one Billing Contract associated with their account. This allows for variance in billing scenarios with that customer such as billing in advance for licenses and billing in arrears for usage or consumption. In Work 365, invoicing will always begin at the Billing Contract level. Every subscription, one-time purchase, and value add service must be associated with a Billing Contract in order to be invoiced.

Before you begin

You must be a licensed Work 365 user with either the Work 365 Admin, Work 365 Billing, or Work 365 Sales security role assigned to you to create new Billing Contracts. Users with the Work 365 Provisioning security role cannot create new Billing Contracts. For more information, see Security Roles and Permissions.

Create a new Billing Contract

New Billing Contracts can be created in a variety of ways. Below is a description of the methods to create a new Billing Contract followed by instructions on configuring the Billing Contract.

Within a customer account

Creating a Billing Contract from within a customer account is advisable as this will automatically populate the Customer field of the Billing Contract with the current account.

In Work 365, navigate to a specific Account.
On the Account form, go to Billing and Invoicing, then within the Billing Contracts section, select ➕New Billing Contract.
On smaller screen sizes, the ➕New Billing Contract command may be consolidated into the overflow menu found by clicking the more commands ⋮ icon.

From the Billing Contract views

In Work 365, use the area selector at the bottom of the left-hand navigation to change to either the Subscription Management or Billing and Invoicing area, then select Billing Contracts.
In the command ribbon at the top, select ➕New.

Configure a new Billing Contract

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Some settings of a Billing Contract cannot be changed after the contract has been created and saved for the first time. Be sure to plan accordingly when creating new Billing Contracts. If a permanent setting must be changed after the Billing Contract has been saved, then a new Billing Contract must be created. Permanent fields are indicated below with a ¹.

Once a new Billing Contract has been created using a method above, fill in the information on the General tab of the record. Required fields are denoted with an asterisk*.

Name* Enter a name for the Billing Contract. The recommended naming convention is the name of the customer followed by a descriptor of the contract: "Contoso Annual Licenses" or "Fabrikam Monthly Azure"
Type*¹ Select the type of Billing Contract. In Work 365 Power, only the Recurring type is available. Organizations migrating from the Work 365 Dynamics version may remember the Item Based type. This field cannot be edited after the Billing Contract is saved.
Customer* Choose the Account associated with this Billing Contract. If the new Billing Contract was created from within a customer account, this field will be prepopulated.
Billing Frequency* Select the billing frequency for the contract. The options are Monthly, Quarterly, and Annual. The billing frequency dictates how often invoices are generated for the contract. Subscriptions of a higher magnitude of commitment can be billed on more frequent contracts, but the reverse is not possible. I.e., an annual subscription license can be billed with the Monthly billing frequency. However, a monthly subscription license cannot be billed on an Annual billing frequency.
Payment Terms* Choose the payment terms for this Billing Contract.
Billing Policy*¹ Select the billing policy for the contract. The options are Advance or Arrears. This field cannot be edited after the Billing Contract is saved.
Process Refunds* Select the method for processing refunds on this Billing Contract. The options are Use Global Setting, Yes, or No. For more information, see Process Refunds.
Currency Choose the currency using the lookup field. This currency will be used for invoicing with this Billing Contract.
Is Default This option allows you to designate a Billing Contract as the default contract for a customer. When set to Yes, new subscriptions synced from an automatic provider will automatically be added to this contract.
Product Type Choose the primary type of product that will be added to this Billing Contract. Product type can be used for categorization and reporting for the Billing Contracts. It is important to note that selecting a product type does not prohibit you from adding products of other types to the Billing Contract. Product types can be configured in the Administration area of Work 365. The native product type options are CSP, Managed Service, and Support.
Prorate Unit Select whether a proration strategy for additions and mid-cycle changes to subscriptions on this contract. The options are:
Days wherein additions and mid-cycle changes are prorated to the day of the change,
Months wherein additions and mid-cycle changes are prorated to the month of the change, or
Use Global Setting which reflects to option configured in the Admin Hub.
Discount (%) Fill in the discount percent that applies to products in this Billing Contract. This discount stacks with the already selected Pricing Strategy assigned to the customer account. For example, if the customer's pricing strategy is "Retail - 5%", entering a number for Discount (%) will increase the discount beyond the 5% granted by the pricing strategy. Enter percentages as whole numbers rather than decimals. I.e., for a 5% discount, fill in 5 rather than 0.05.
Tax Service If applicable, choose the tax service that will apply to this Billing Contract. For more information, see Setting up Taxes in Work 365.
Tax Rate Group If applicable, choose the tax rate group that will be applied to this Billing Contract. For more information, see Setting up Taxes in Work 365.
Primary Billing Contact Choose the Contact associated with the customer Account who will serve as the primary billing contact for this Billing Contract. The primary billing contact will automatically receive a copy of invoices based on this contract when they are sent out of Work 365.
Secondary Billing Contact Choose the Contact associated with the customer Account who will serve as the secondary billing contact for this Billing Contract. This contact will also receive a copy of invoices related to this contract when they are sent out of Work 365.
Additional Invoice Recipients Add email addresses for any additional recipients who should receive a copy of the invoices that are sent for this Billing Contract. Multiple email addresses must be separated by commas.
Start Date* Select the start date for the Billing Contract. This will dictate the billing cycle of the contract.
End Date* Select the end date for the Billing Contract. This field can be used to determine which contracts are coming up for renewal.
Auto Renew This option allows you to dictate if the contract will renew automatically when it reaches its end date. This setting does not cascade to the subscriptions and services in the Billing Contract. Selecting Yes or No for this field will not impact the auto renew settings associated products.
Contract Term (Months)* Enter the number of months for the term of this Billing Contract. This typically aligns with your billing frequency. When auto renew is set to Yes, the Billing Contract will automatically be extended by this number of months when it reaches its end date.

Once the required fields and any desired optional fields have been completed, select 💾Save in the command ribbon. This will finalize the creation of the Billing Contract.