Is your organization equipped with the necessary business technology to excel in the subscription economy? In this blog I aim to discover how Dynamics 365 Finance can provide the support you need. 

Previously, only select sectors like periodicals, health clubs, and newspapers operated under subscription models.

Nevertheless, a growing array of enterprises providing recurring products or services have adopted subscription billing as a dominant business approach. Presently, subscription-based models find favor across industries including music, film, television, and product-as-a-service (PaaS).

By streamlining billing procedures, this model supports firms in bolstering customer retention and achieving reliable revenue expansion.

Businesses can manage the whole subscription lifetime, from creation to invoicing and payment processing, using the powerful subscription billing features that Microsoft Dynamics 365 Finance delivers. 

Furthermore, Microsoft Dynamics 365 Finance’s Accounts Receivable tool keeps track of client invoices and incoming payments.

Subscription Billing: At a glance

Microsoft Dynamics 365 Finance Subscription Billing streamlines the process for organizations by enabling them to create and manage subscription plans effortlessly. It tracks usage, automates billing, and simplifies payment procedures. Within the subscription billing module, businesses can tailor billing models to meet specific customer needs and usage patterns. These models help identify accounts receivable. Pricing options fall into three categories: one-time charges, recurring fees, and usage-based costs. Furthermore, Microsoft Dynamics 365 Supply Chain Management provides oversight for accounts, monitors usage, and automates billing tasks.

Three Subscription Billing Modules

These three modules can be utilized either independently or grouped together for enhanced functionality.

  • Recurring Contract Billing: This module streamlines recurring billing models and offers comprehensive price management capabilities to govern pricing and billing parameters. It also facilitates contract renewals and consolidated invoicing.
  • Revenue and Expense Deferrals: This module eliminates manual processes and reduces reliance on external systems. It assists in managing revenue by providing real-time insights into monthly recurring revenue.
  • Multi-element Revenue Allocation: For handling complex pricing and revenue allocation across various teams, the multi-element revenue allocation module ensures compliance and transparency in revenue recognition.

Subscription Billing Configuration

Before implementing Subscription Billing in Microsoft Dynamics 365 Finance and Operations, organizations need to establish subscription plans defining pricing and billing terms for their services. These plans can be customized to accommodate multiple pricing models and structures based on user or customer requirements. Factors such as the number of users, data usage, service duration, or other significant usage parameters drive the design of pricing models. Once set up, subscription plans can be assigned to individual customer accounts.

Subscription Billing Management

After configuring subscription plans, businesses can efficiently manage the Subscription Billing process using Microsoft Dynamics 365 F&O. The platform tracks customer usage, calculates charges based on pricing models, generates invoices, and handles payments. Additionally, robust reporting capabilities enable detailed analysis of customer usage, invoice status, and payment status, providing valuable insights into subscription billing operations.

Setting up Subscription Billing in Microsoft Dynamics 365 Finance: Prerequisites

set up Subscription Billing in Microsoft Dynamics 365 Finance, setup subscription model, setup OTT model

Before enabling Subscription Billing in Microsoft Dynamics 365 Finance, it’s crucial to disable the Revenue Recognition feature. Here are the steps:

  • Navigate to the Feature Management workspace in Microsoft Dynamics 365 Finance. Click on the “All” tab and enter “Revenue recognition” in the filter. Select the feature name as the filter criterion.
  • Choose the “Revenue recognition” feature and opt to disable it.
  • Once disabled, filter by “Subscription billing” in the Feature Name and select the module filter to proceed with the setup.
Subscription billing setup, D365 Finance
  • Opt for the Subscription billing feature and enable it.
  • Select one of the three modules from the previously mentioned list and enable it.
  • Repeat step 5 for the remaining two modules.
Subscription billing, Subscription ERP, OTT ERP

Wrapping Up

Subscription billing serves as a potent asset for enterprises providing recurrent products or services, and the integration of Microsoft Dynamics 365 Finance with Dynamics 365 Supply Chain Management offers an extensive subscription billing feature.

Through this capability, businesses can oversee the complete subscription lifecycle, from invoicing to payment processing, and reap advantages such as consistent revenue streams, enhanced customer retention, and streamlined billing operations.

Moreover, enterprises can harness the integration of subscription billing with other Microsoft Dynamics 365 applications, ensuring a cohesive customer journey and simultaneous access to customer data.

Happy Reading!!

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