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Frequently Asked Questions on Annual Billing
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Frequently Asked Questions on Annual Billing

Q: What's changing?     

A: In response to partner requests we are introducing the ability for our Partners to pay annually for CSP subscriptions, giving the option to choose the billing frequency that works best, on a number of offers.


Q: Who can participate?             

A: Annual billing will be made available to all partner types in all markets where CSP is currently available


Q: When will this be available? 

A: We plan to make this available early in the first quarter of our FY18 (July-Sept 2018)


Q: What do partners need to do to prepare for this change?       

A: To prepare partners should consider how this will be incorporated into their sales motion. Partners using APIs should plan on how to update these APIs if wishing to avail of this option. Partners should also review the changes to the invoice reconciliation files and ensure all impacted team members are informed so that all internal process can be updated if required. Where is this sample reconciliation file?  Can you provide?


Q: What are the benefits of this change?             

A: Partners will have increased flexibility on payment options by subscription allowing them to align to how their customers are invoiced, if desired. Annual billing also reduces the impact of currency fluctuations.


Q: Which Offers are included for annual billing?

A: Initially annual billing will be made available for all O365 subscriptions.


Q: Will there be new offers for annual billing?    

A: No, the offers will remain the same, but partners may now choose monthly or annual billing frequency.


Q: "How do partners select annual billing?          

A: After adding a new subscription partners will be prompted to select annual or monthly billing frequency.


Q: Can a partner add a new license to a subscription with annual billing?

A: Yes, the license quantity for both monthly and annual billed subscriptions can be changed at any time.


Q: Can a partner choose monthly or annual billing for add-on offers?      

A: The add on offer will inherit the same billing frequency as the parent offer (subscription).


Q: Is it possible to switch the subscription billing frequency from monthly to annual and vice versa? 

A: No, once the billing frequency is selected it cannot be updated thereafter


Q: Is annual billing per subscription or per license?                       

A: Billing frequency is on the subscription level.


Q: Can a partner split a subscription between monthly and annual payment?             

A: No, subscriptions cannot be split - the entire subscription must have either monthly or annual billing.


Q: When does an annual subscription renew?                  

A: The service period begins on the subscription creation date and renews 12 months later.  For example, a subscription created on January 10, 2017 will renew on January 10, 2018.


Q: When is the partner billed for an annual subscription?                          

A: Partners are billed for the 12-month subscription on their next billing date.


Q: Do annual subscriptions receive a ‘free period’?                       

A: No, annual subscriptions do not receive a ‘free period’. Information on free trials is available in a separate section of this announcement.


Q: When is the partner billed for the renewal of an annual subscription?

A: Partners are billed on the billing date following the subscription renewal date. For example, if the partner purchases an annually billed subscription on 1/15/17 and their billing date is the 20th, their subscription will renew on 1/15/18 and will be billed for the renewal on 1/20/18.


Q: How does cancellation of annual billing work?               So the “grace period” goes away but we have the ability to cancel within 30 days and receive 100% of the monetary value back?  Does this also apply to monthly?  If not, don’t you see potential for abuse here?  I would hate to see customers ordering annual from us, cancelling, within 30 days, and then going to a different plan or not buying anything because they accomplished what they needed.  I am sure someone will say the free trials will help but they won’t since only Business Premium, E3, and & E5 are being made available for trial to begin with. Not a huge risk but strange.

A: Subscriptions with annual billing cancelled up to 30 days from the subscription creation date will be credited 100% on the following billing date. A subscription can be cancelled at any time during the year by the partner without penalty. The partner will receive a prorated cancellation credit on their next billing date.


Q: How will annual billing work for add-on seats to an existing subscription?             

A: Seats can be added at any time during the subscription, and the cost is prorated.


Q: Are seat decreases allowed with annual billing? How does it work?                  

A: Yes, as with monthly billing, the partner is credited and rebilled on a prorated basis on the following billing date.


Q: Can a customer move an annual payment subscription from one partner to another?           

A: No, subscriptions cannot be moved between partners. The new partner must purchase a new subscription on behalf of the customer. (This applies to both monthly and annually billed subscriptions).


Q: Can a customer have more than one Office 365 subscriptions with different billing frequencies?       

A: It depends. Some offers are restricted to one subscription per customer. If the offer is not restricted, multiple subscriptions of the same offer with different billing frequencies for the same customer can be purchased. The Offer Matrix spreadsheet (column I) located on the Partner Center Pricing and Offers page, details the offer limit/restrictions.


Q: What happens if an Offer price is changed part way through an annually billed subscription?       

A: The offer price at time of purchase is guaranteed through the 12-month subscription term.  The subscription will renew at the current price indicated on the price list.


Q: Is it possible to block annual billing option from a partner’s CSP account or Partner Center?              

A: No, all partners will be able to select annual billing frequency for those offers that support this flexibility.


Q: Does the invoice or reconciliation file indicate if the subscription is billed annually or monthly?    

A: Yes, the license-based reconciliation file column AA indicates if the subscription is billed monthly or annually.


Q: What rows will be seen in the license-based reconciliation file?           

A: A charge will be seen on the license-based reconciliation file on the billing date following the purchase. Let’s call this reconciliation file #1. If no changes are made to the subscription no rows will appear on reconciliation files #2-12. When the subscription renews, a charge will appear again on the following reconciliation file. If a change is made to the subscription a credit and prorated rebill will appear on the following reconciliation file. What was the reason behind this?  Is it purely because of “clutter”?  Right now, our recon files act as a way to view all of our customers and with this change that won’t be possible anymore.  Will the analytics in Partner Center account for this?


Q: Will there be additional “Charge Types” on the file i.e. Column P of the usage files?

A: The initial purchase charge appears as “Prorate Fees When Purchase”.

License changes that result in credit & rebill appear as “Cycle Instance Prorate”.

Cancellation credits appear as “Cancel Fee”.


Q: When an annual subscription is cancelled, what does this look like on the usage file?         

A: The reconciliation file will contain one line item for a cancellation credit. If the cancellation occurs in the first 30 days, the subscription will be credited 100%. If the cancellation occurs after the first 30 days, the subscription will be credited on a prorated basis.


Q: What does it look like on the usage file when seats are added to a subscription with annual billing?             

A: As with monthly billing, the reconciliation file will contain a credit and prorated rebill.


Q: What happens when an annual subscription has a seat decrease?  What does it look like on the usage file when seats are removed from a subscription with annual billing?       

A: As with monthly billing, the reconciliation file will contain a credit and prorated rebill


Q: Is there a mock usage file, documentation, and training materials?     

A: In July 2017, we will publish the FY18 Billing Guide where we will document cancellation and seat change scenarios with visual mock-ups of the reconciliation files. Can we get this please?


Q: Customers billed monthly can reactivate subscriptions and there are subsequent prorates. Is it possible to reactivate a customer billed annually or are all cancellations final?          

A: It is possible to reactivate, within standard data retention timelines.


Q: Are subscriptions billed via annual billing auto renewed after the 12 months?            

A: Yes, as with monthly billing, subscriptions on annual billing will auto-renew 12-months from the purchase date.


Q: How exactly is a cancelled seat or subscription calculated? Is it to the day or to the month?  

A: Cancellation credit is calculated as follows = ((monthly price*12)/365)*days in cancellation period*number of licenses.


Q: How often are incentives calculated on annual subscriptions and how will those incentives be paid?           

A: There is no change in how Microsoft calculates incentives.  We will continue to calculate on monthly billed revenue.  Earned incentive payments will land in accordance with our policy found in our CSP incentive guides. At present, payment cadence is twice per year, 45-days after semester end.


Q: When an annual subscription is sold, how will that annual subscription’s revenue for incentives be recognized (billed or adjusted)?           

A: Incentive calculations will continue to be based on billed revenue.


Q: In cases of annual subscription transactions, how will incentive earnings on those eligible annual subscription transactions be impacted across the various CSP incentive rates (global incentive rates, local accelerator rates and local campaigns)?     

A: Regardless of subscription billing (monthly or annual), partners will continue to earn incentives on eligible transactions which include the global rate (applied to the billed revenue for the period) and the local accelerator (in geos where local accelerators exist) and any potential global campaigns where applicable.


Q: Who can partners contact for incentive-related questions?    

A: Please contact the appropriate regional incentives support team.

Canada – Online Channel Incentives Support NA:

Latin America & Brazil - Online Channel Incentives Support LATAM:

EOC - Online Channel Incentives Support EMEA:

APOC - Online Channel Incentives Support APGC:

Japan - Online Channel Incentives Support Japan:


Q: Are there any changes to APIs resulting from the launch of annual billing?             

A: Partners who wish to leverage annual billing will need to update their APIs in order to apply this functionality.


Q: Where can partners get information relating to the API changes so the necessary changes can be applied?        

A: We have prepared several articles to support partners on making these changes and these can be accessed here and here

Sample code can be viewed here

This documentation should be reviewed and preparations should be made to implement the changes once this functionality has been released in Q1 of FY18.


Q: How will annual billing be reflected in the Pricelist?  Will there be an additional column with ‘Annual price’?  

A: There will be no impact to pricelist which will continue to show the monthly price and which can be multiplied by twelve to calculate the annual price.


Q: How will this reflect in the Offers matrix?      

A: The Offer IDs will remain the same, there will not be unique offer IDs for annual billing


Q: Are price decreases honored during the 12-month term?       

A: As with monthly billing, the price is set for the full 12-month period.


Q: How will the one-time amount (OTA) appear on the reconciliation file?              

A: The one-time amount will appear on Month 1 and the next billing line will be seen one year later if there have been no changes to the subscription.


Q: Will there be an unique SKU for offers where annual billing is the preferred invoicing frequency?     

A: There will not be a unique SKU - billing frequency is assigned to the SKU as an attribute. The option to rename a SKU using a "friendly name" (Partner Centre terminology) exists and could potentially be leveraged to allow differentiation. We noticed this on our license-based usage files.  How do we use this?


Q: Will there be new SKUs for annual billing?     

A: "No, it’s just the payment option that is new."


Q:  At any point in the commitment period can monthly billing be converted to annual?

A: This is not supported at this time. Partners choose the billing period when they create the subscription, and once selected it cannot be changed.


Q: Is annual billing per subscription or per seat?

A: Per subscription, and the same terms of the subscription apply.


Q: When will partners using the API be able to start preparing for and testing annual billing?  

A: Partners who wish to test their API integration in advance of the official launch should join the Early Adopter Program using this link

Participants will have the option to test in a sandbox environment and join the Yammer group to post any questions that arise. Once the functionality is live support will be provided through the Partner Centre Service Request tool on the Support tab in Partner Centre.


Q: Where can partners get support for other questions on this topic?

A: As with all topic Partners can seek support through the creation of a service request on the “Support” tab in Partner Centre


Q: How will the annual billing subscriptions appear in the reconciliation files on each billing date, will they show as “zero”?

A: Partners will only see one billing line on the reconciliation file that is generated following the purchase. The subsequent 11 reconciliation files will not show any billing lines for the subscription, assuming no changes have been made in the meantime and the license has not been cancelled. Following the renewal date they will again see a billing line on the reconciliation file.