Subscription
The Subscription function in ERPNext v16 enables you to track items such as software licenses, support contracts, memberships, and even rent payments that your firm must make on a monthly, quarterly, or annual basis. The Subscription master contains everything it needs to automatically create Purchase Invoices for suppliers or Sales Invoices for customers regularly. This implies that bills are always right and that there is less labour to perform by hand.
The way ERPNext works is a good example from the real world. You may usually receive hosting and support for a complete year. Each customer’s subscription has a start and end date. The customer must renew their subscription in order to keep utilising the service once the subscription period finishes. The Subscription feature in ERPNext maintains track of when these subscriptions end and sends out renewal bills on time. This makes sure that billing proceeds smoothly and that follow-up is done correctly.
To see the list of subscriptions, go to:
Home > Accounting > Subscription Management > Subscription
From this list view, you may create new subscriptions, see your current ones, keep track of their status (active, trial, cancelled, etc.), and handle renewals.
Prerequisites
Before you make and use a Subscription, you should complete the following:
The Subscription Plan shows you what you’re paying for, how much it costs, and how often you’ll get paid. At least one Subscription Plan must be linked to each Subscription.
How to Sign Up for a Subscription
To start a new subscription, do these things:
1. On the Subscription list, click New.
2. Choose the kind of party you wish to deal with: a client (for repeat sales) or a supplier (for recurring purchases). Choose the right party next.
3. Choose the Start Date, which is the day the subscription starts and the day the billing cycle starts.
4. You can enter an End Date if you know that the subscription will only be good for a particular amount of time. The subscription will last eternally unless the user cancels it.
5. Pick how many days you have until the payment is due. This lets the customer know how many days they have to pay the Sales Invoice after it is made.
6. Pick one or more Subscription Plans that you want to use for this subscription.
7. Click Save to finish the subscription.
Based on the start and end dates of the subscription, the billing interval, and the number of intervals established in the associated Subscription Plan(s), ERPNext automatically works out the exact dates when invoices should be sent out.
3.1 Period of Trail
If you allow users sample your service before they buy it, you can set a start and end date for the trial period in the Subscription. During this trial period, customers can use the service for free, thus there won’t be any bills sent out. The Subscription status will say “Trialling” while the trial is going on. This makes it easier to discern the difference between trial memberships and ones that are currently active and cost money.
3.2 Disable automatic renewal
You may be sure that your subscription won’t automatically renew when the current billing period finishes if you tick the “Cancel At End Of Period” box. This choice will prohibit ERPNext from making bills after a year if you have a yearly membership. This is perfect for contracts or subscriptions that only continue for a short period and shouldn’t renew on their own unless you want them to.
3.3 Taxes
If you choose a Sales Taxes and Charges Template, you can add taxes immediately to a Subscription. This makes sure that all the invoices sent out through the Subscription have the appropriate tax structure, rates, and accounting entries. Tax templates keep everything the same and make sure they obey the requirements. For further details, please see the documentation for the Sales Taxes and Charges Template.
With ERPNext v16’s Subscription function, businesses can automate regular invoicing, keep track of subscription lifecycles, handle renewals and expirations, and keep their financial records accurate with very little support from people.
3.4 How to Use Discounts
With ERPNext v16, you can directly add additional discount directly at the Subscription level. This assists you in providing the clients with amazing prices without necessarily modifying the price of the Item or Subscription Plan. Depending on the needs of your business and accounting, you may issue discounts on the Net Total (before taxes) or the Grand Total (after taxes).
You can set the discount as a percentage, and ERPNext will calculate how much it is for each Subscription invoice that comes in. If you give the subscriber a 2% discount and it costs $12,000, the system will know that the discount is $240 and will take it off the bill. This makes sure that your monthly payments are always the same, and you don’t have to modify the discounts by hand every time you charge.
3.5 Create Invoices Without Having to Do Anything
The Subscription feature of ERPNext v16 allows setting invoices to generate on its own based on the set billing rate and requirements as defined in the Subscription Plan, which is also one of the best.
The frequency at which the bills are delivered (daily, weekly, monthly, yearly etc.) is determined by the plan. In case you check the box beside GENERATE INVOICE at the beginning of period, the invoice will automatically be made the moment the subscription period comes. It occurs frequently when upfront payments are made such as in the case of SaaS or annual maintenance agreements.
When you tick the box in the element of generating new invoices after past due date, ERPNext will continue generating new invoices even when the previous one is late or has not been paid. This will be valuable to companies that do not wish to have unpaid debts to hinder their ability to issue bills in later days.
When you switch on Generate Invoice Early, ERPNext will make the invoice a specified number of days before the billing period finishes, as set in Generate Invoice Days Early. This helps clients pay on time by letting them get their bills early.
By default, all invoices created from a Subscription are delivered automatically, which means they go right to the General Ledger. If you turn off “Submit Invoice Automatically,” the invoices won’t be issued soon away. They will be preserved as drafts instead. You can then look them over and send them yourself.
3.6 Follow the months of the year
The Follow Calendar Months option makes sure that billing periods are the same as genuine calendar months instead of date ranges that change all the time. This is especially crucial for monthly or quarterly subscriptions since customers want their bills to come at the same time every month or quarter.
- For example, if the billing period is set to Monthly with an interval count of 3 and the Subscription Start Date is 15-04-2020,
- The billing period would be from April 15, 2020, to July 14, 2020, if the Follow Calendar Months option is not switched on.
- If Follow Calendar Months is turned on, the first bill will cover the time from April 15, 2020, to June 30, 2020, which is the conclusion of the calendar month.
This option is great for keeping customers happy, making accounting easier, and keeping reporting the same.
3.7 Ending a Subscription
People who want to discontinue their subscription right away can do so by clicking the “terminate Subscription” button in the Subscription document. ERPNext ceases issuing new bills for your subscription as soon as you cancel it.
If you terminate your membership, any invoices that have already been sent will stay the same. This means that your accounting and Audit records will stay the same. This makes it easy to keep track of churn and check the figures again.
3.8 How to Change a Subscription
The Fetch Subscription Updates button will provide you the latest information from the system, such as new bills. This makes sure that the Subscription document always presents the most up-to-date billing status and history, especially when jobs that are scheduled to run in the background issue invoices.
