The Math behind it all – Microsoft Performance Standard for Direct-bill Partners

Microsoft Performance Standard

In the final post of our 3-part series, detailing the new Microsoft Performance Standard for Direct-bill partners, we wanted to take a deeper look into the numbers

As part of this series we have covered the announcement and what it means along with the reaction and feedback from users through a survey:

The Math

Microsoft is indicating two things – they no longer want to manage the business risk associated with smaller transactions and the $300k threshold is what makes the most sense, financially.  In the analysis below, we have a listing of the application, systems, and operating components required to operate the CSP (recurring revenue) business. We have compared what a Direct and Indirect Partner may need from an operating cost:

Operating Costs:Direct PartnerIndirect Partner
Ticketing and Billing 25,00025,000
Automated Provisioning12,000
Customer Self-service Portal2,000
Microsoft Advanced Support for Partners15,000
Support Staffing50,00025,000
Additional Training4,000
Total (Operating Expenses)108,00050,000

Table 1

There are more up-front investments as a Direct-bill partner. The CSP business requires an investment however, this doesn’t convey the full story. To go along with the costs we need to model the revenue and margins that are generated.

With the Direct Bill Model, partners enjoy a bigger margin, more automation, and a deeper relationship with Microsoft. below is an example of a profile of a partner servicing the SMB segment:

Revenue and Margin:Direct PartnerIndirect Partner
Office 365 (per user per month)$20$20
Azure Consumption (per customer per month)$500$500
Partner Margin on Microsoft Elements20%15%
Additional Partner Support Fees (per user per month)$40$40
Partner Margin on Additional Support Fees40%30%

Table 2

A quick example…

Assume you’re a Direct-bill partner and you have 25 users per account. Based on the charts above, your breakeven client number is 50 customers between the direct and indirect program.

 That said, with 25 customers in your CSP business you could be very close to meeting the required revenue threshold. Although this number looks large, you may not be far off with the correct strategy.

The CSP program has been around since 2015 and has been a high-growth area since launched. The number of customers moving to the cloud isn’t going to decrease. If this pandemic has taught us anything, it’s that digital transformation and moving to the cloud will accelerate in the coming months and years. Adding just one customer per month would result in over 50 customers in 5 years.

Typical Customer Profile – ROI

Although there is a greater operating cost associated with maintaining Direct-bill status, there is also a larger revenue opportunity, in the form of margin percentages. This structure incentivizes those who are motivated to scale their business quickly, enabling them to earn greater revenue as they add more clients. Those who think of the CSP business as an opportunity and invest in the infrastructure and systems can realize the scale and better margins to fuel growth.

Microsoft Performance Standard for Direct-bill Partners

As you can see from this chart, there is an initial upfront cost, but your breakeven is achieved when you reach about 25 clients. This calculation assumes about 25 users per client and the strategic investments outlined in Table 1. What’s more, is this your revenue at this number of clients and users would generate $300,000 in revenue, fulfilling the requirement to maintain Direct-bill status.

Final Takeaways:

  • If your CSP footprint is small and recurring revenue is not a growth area for you, you shouldn’t be in the direct program, it just doesn’t make much financial sense.
    • There are great partners out there to help you in these areas.
  • It is significantly more challenging to scale Azure through an indirect provider, so remaining a direct partner can make a big difference in your ability to sell and manage Azure billing.
  • If you have a significant CSP footprint in the indirect program, you could have much greater margins and be doing much better financially in the Direct-bill program.
  • To be successful in the Direct-bill CSP program, it requires investment in systems, people, and process.


As with many Microsoft announcements over the years, this one takes some thought and evaluation. What we hear time and again is that reinvestment of capital into your business in the form of automation can significantly help your business achieve scale, then accelerate growth. That has never been clearer for direct bill CSPs as it is now, which should pave the way for an even more successful 2021.

Work 365 wholeheartedly understands how challenging it can be to scale and grow your business. Contact us to learn more about how we’re helping businesses embrace, scale, and accelerate recurring revenue.

Options for Direct Bill CSPs with Microsoft’s New Requirements

Requirements for Direct Bill CSPs

Microsoft announced a performance standard for Direct-bill Microsoft CSPs.

This announcement has invoked a wide range of reactions from the partners in the Microsoft CSP program. Some partners are reassessing their business models, and others are doubling down on their plans.

Highlights of the announcement include:

  • Microsoft is introducing revenue requirements for the direct bill program. Partners who want to enroll as direct bill partners in the Cloud Solution Provider program must meet at least USD300K in Cloud Solution Provider program revenue during the 12 months before their  required support contract renewal date.
  • This requirement will go into effect in January for current direct bill partners, and partners will need to meet the requirements by their partner support plan renewal date.
  • If partners are not able or would prefer not to meet these updated requirements, they will need to re-enroll as an indirect reseller in the CSP program.

So, what are the options for Direct Bill CSPs?

  1. Stay put and accelerate growth: If you are a direct bill CSP partner that is below the revenue requirement, here are a few specific considerations:
    1. Is this a strategic area of growth and how important is Azure revenue for your business? It is significantly more challenging to scale Azure through an indirect provider, so remaining a direct partner can make a big difference in your ability to sell and manage Azure billing.
    2. What does financial modeling look like? There are additional systems that must be implemented and a system that must be set up, potentially costing additional resources.
    3. Is there is a roadmap and template to follow? If this is a strategic opportunity for your business, you can define the products and services and follow this sort of three-step process. You can also use co-op funds to finance these activities.
  2. Evaluate the right Indirect Provider(s) for you: Indirect providers will welcome you with open arms; however, they are not all the same. Here are a few elements to consider when evaluating an indirect provider:
    1. The big three Distributors provide a wide range of products and services, including hardware, software, and cloud services. The most comprehensive range certainly provides you a one–stop–shop, but your business needs focus and specialization. Some providers have expertise around specific product lines, and your account manager may have specific capabilities. Ultimately, the biggest may not be the best.
    2. Billing alignment will save you time and money. Understand how they invoice you. How will you invoice your customers, and will their invoicing process impact your billing process? These processes can be time–consuming and need to be automated as much as possible. Understand the formats of Azure consumption and license-based invoices. Using a billing automation system like Work 365 will significantly reduce this risk and effort related to billing. Some distributors provide pro-rated refunds on reductions; some offer a free month or a set of free days.
    3. Is there an integration available with your internal systems? Have you invested in a billing and provisioning system? Indirect providers will want you to use their portals to provision all their services. They believe it is difficult to transition services from one provider to another, so a lock-in is inevitable. They will also offer a migration service to move your services over.
    4. Financial impact and Margins are going to be critical to your decision. If you lose on the margin, you could still gain it back on the savings from the ASFP cost (15K/year). At the 300K threshold, you could lose 5% of your margin and still arrive at break-even – this is back of the napkin math. Also, you can manage and expand margins only when you have options in service providers. If you only provision through the distributor portal, it’s more difficult to bundle and even shop around.
    5. Support becomes vital during a service migration or when things break. Distributors sell their support services as differentiation and it comes in the form of pre-sales and post-sales support. Distributors can be great sales partners and provide pre-sales support; it’s when things break where they contact Microsoft behind the scenes to coordinate. The level of support and business you bring in will dictate the margin you receive.


As with many Microsoft announcements, this one takes some thought and evaluation. Reinvestment of capital into your business in the form of automation can help your business achieve growth profitably. At Work 365, we understand navigating the CSP business. We have a passion for building solutions that help our users navigate these challenges now and into the future.

Three Steps to Accelerate your Recurring Revenue Business

Recurring Revenue Business

Technology organizations have a growing list of channels to grow their business, with subscriptions and recurring revenue at the top of that list. Technology firms’ success relies on their ability to adjust, implement, and accelerate, based on their clients’ shifting needs.

This ability begins with an understanding that growth can be a moving target – when to maintain the status quo, when to follow the pack, and when to branch out on your own and establish differentiation.

But we continue to hear that without a strong foundation, rooted in proven best practices; you’ll be fighting an uphill battle from day 1. Ultimately, client engagement is proving to be the most consistent driver for business separating from the pack.

Here are three critical steps to enable and engage your customers for sustained business growth.

Sales and Product Management

This first step is self-explanatory on the surface: you need to know which products you’re selling and how you’re going to sell them. Understanding your product capacity, including how to differentiate, is critical when enabling your sales teams. If they don’t know what they can sell, how are they supposed to sell it?

Equally important is how you’re going to sell these products, and product positioning manifests in a few ways, which are easy to take for granted. Too often, companies will take products and publicize the product’s features, slap a satisfaction guarantee on it (or an “unmatched customer service” guarantee), and call it a day.

This strategy fails to recognize the challenges your clients are trying to solve, and what makes your company different. If you’re a Microsoft CSP, this is particularly important because the core product offerings you provide are not dissimilar from other competing CSPs.

At the core of any business, you must be able to define which products and services you’re selling (including subscriptions and one-time items), have an established pricing strategy with stated price lists, and a plan for your core-bundle offers. Bundling can evolve in many ways, so your team needs to understand your core bundles’ uniqueness as part of your sales strategy.

How to accelerate: as your practice grows, you should consider three main areas to kick that growth into high gear:

  1. Embrace Integration – explore automating your product catalog management and provisioning.
  2. Internal Incentives and Sales Performance Incentive Funds (SPIFFS) – Reward your sellers and maximize the sale of products that promote your business’s growth.
  3. Sales Incentives – how to reward your sellers and maximize the sale of products that promote your business’s growth.

Online Presence

In the digital economy, a company’s online presence is vital for their business to thrive. This is especially true for fostering more robust relationships with your clients and effectively messaging your differentiation to prospects.

We know what customers are asking for: transparency, agility, and attentive customer service. Yet each of those three areas poses a unique challenge of their own for companies embracing recurring revenue models. Providing clarity and agility can be particularly tricky if you’re manually managing hundreds of inquiries and change requests per month, exponentially increasing the internal effort needed to provide the level of customer services your clients desire.

The good news is many companies are actually nailing their online presence and delivering on the service their customers need. It all starts with self-service, a portal where your clients are empowered to view and manage their licenses, view billing data, and view new products and services available to help grow their business. Installing a branded customer self-service portal is a surefire way to deliver transparency, agility, and exceptional customer service, while also providing a platform to accelerate growth.

How to accelerate: once you have your self-service portal installed with your company branding, you can elevate your presence even further with the following tactics:

  1. Visitor Tracking Google Analytics – gain critical insights on what your customers are viewing to ensure your products and services align with their needs.
  2. Case and Ticket Management – streamline processes to boost customer satisfaction.
  3. Knowledge Base – build data streams and gain a better understanding of your customers.

Every company can improve its online presence, and even amidst a pandemic, Zuora’s Subscription Economy Index finds that subscription sales remain resilient, rising 12% in Q2 2020 alone. Providing your clients with a hassle-free, transparent process for navigating inquiries and requests is a recipe for increased engagement.

Automation and Integration

In a recent interview with current CEO of Zuora Tien Tzuo, there were some fascinating thoughts from Steve Cakebread (former CFO of Salesforce) around Automation and the subscription economy. Automation and the subscription economy are forever intertwined, with each facilitating growth of the other. The rapid rise in subscriptions isn’t possible without Automation; otherwise, it would be too painful to bill and collect cash on a monthly or annual schedule (it also wouldn’t make financial sense).

What Steve says is: “Automation is key. A lot of companies realize this way too late. You can’t just throw bodies at the problem anymore. People don’t want to do that kind of work these days.” Of course, he’s right. Too often, the standard procedure is adding headcount or resources to solve the problem. But for many growing small businesses, that’s not an option.

There are only two options: slow your growth, or automate. If you’re a business owner, the choice is clear: you have to find a way to automate. But how and where to start? An audit of your sales process is a good start, and being honest and objective with your evaluation is critical. From there, you’ll be able to target gaps and where your effort is overly manual. This is your foundation for transforming your business, identifying areas for investment – if you’re a CSP, integration with Partner Center is also worth exploring or integrating into your accounting system. As Steve mentioned, people don’t want to be working in excel spreadsheets all day, so enabling an automated, integrated flow across your systems is paramount. You also want to allow notifications and alerts through Power Automate’s flow.

How to accelerate: with your foundation in place, you want to continue eliminating overly manual workflows. The next four areas are how we see the best companies operating:

  1. Provisioning Integration with 3rd Party providers
  2. Payment Integrations for Cash Collection
  3. Provider Integrations for Provisioning
  4. Business Intelligence Reports – gain operational and sales insights

Once you begin to apply these tactics, you’ll be better informed, operating more efficiently, and gaining critical insights into how your business should grow recurring revenue. One other quote of sage advice from Steve: “Make sure you’re in a position to take advantage of the data. We would have done so many things at Salesforce differently if we just had access to the data.

8 Signs You Need to Invest in Your CSP Business

CSP Business

There is an expansion in CSP revenue for Microsoft partners, as demand continues to rise within the Microsoft Cloud market. Yet, we also see CSPs struggling to accelerate past initial roadblocks to scale their recurring revenue. As your client number begins to increase, so does the workload and the customer’s expectations. What results is a bottleneck creating friction in your revenue growth plan.

If your CSP business is experiencing any of these eight friction areas, it’s time to examine a new process and/or system.

1. You’re using Excel Spreadsheets and emails to track your customer’s changes

This first example is very common, and if you’re reading this, I’m sure you’re nodding your head. Tracking changes through email communication, then documenting that change in an excel spreadsheet can be painful work. Steve Cakebread called out this type of process in a recent interview with his former colleague, Tien Tzuo: “automation is key. A lot of companies realize this way too late. You can’t just throw bodies at the problem anymore. People just don’t want to do that kind of work these days.”

2. Revenue/Sales Models and Billing are not aligned

A sales strategy not aligned with your billing processes is a recipe for significant friction amongst critical teams. Striking the right balance between allowing your sales team to be more creative in product definition, pricing, and deal terms and your billing teams’ ability to support and provision these requests is paramount. Creating a harmonious workflow between each team enables your sellers to spend more time closing business, with your billing team collecting Cash more efficiently.

3. Sales Teams are spending too much time to turn around quotes

If you’re a sales team member, you dread having that quote returned to you with corrections from your billing team. If you’re a sales leader or a business owner, you want your sales team out in the field selling. Creating a standard process for quoting, including product definition, terms, and pricing parameters, frees up your sales team to sell more. Having to customize pricing on every deal creates friction in your sales velocity and slows revenue.

4. Waiting until you receive Microsoft/Provider Invoices to invoice your customers

This area is also quite common with CSPs, who are keen on waiting for providers to invoice before sending out client invoices. The result is friction with cash flow and increasing risk, in that you don’t know what your customers have purchased and have no record through the billing period. This strategy is reactive, which customers don’t like and can lead to attrition.

5. Collecting cash before provisioning

We see this a lot from Dynamics customers, and it’s an outdated model that can decrease client satisfaction. This strategy often stems from the difficulty in accommodating changes or tracking changes between collecting Cash and provisioning. This area is ripe for automation and needs to be examined before your customer satisfaction begins to decrease.

6. You only have one billing frequency

What’s best for you is not always what’s best for the customer, unfortunately. However, this challenge is a good thing because your client list is beginning to grow, and enabling your team to offer multiple billing frequencies without impacting the business is a natural step in your CSP business’s growth. Customers expect certain flexibility, and promoting this within your systems will empower your sales teams to close deals faster.

7. You don’t let customers self-manage

We’re now deep in the customer experience conversation because this is one request we repeatedly hear from customers: they want transparency and the ability to manage their licenses on their own. In the CSP world, customer experience is the leading indicator of customer retention, and providing an optimal experience is why customers stay. Creating a self-service portal is what customers want. Of course, you should put guard rails in place, including a view into when changes were made and by whom. Manually entering these changes, creating reports to track the changes, then processing the addition/reduction all creates a long process.

8. You spend too much time on reconciliation

Reconciliation is undoubtedly a hot-button concern for all billing teams. They want everything to match up correctly, and rightfully so. The fastest way to alleviate this concern is to have an integrated system that connects provisioning with billing. This automation relieves stress on your billing team, mitigates the risk of any error, and helps everyone focus on the areas of work that excite them.

If you’ve read this far, so you must be experiencing at least one of these challenges. The good news is Work 365 has you covered. Even better news: Microsoft Incentive Co-op funds can be utilized for the purchase of Work 365. If you’re a CSP partner and want to accelerate your business’s growth this year, visit the page to learn more about Work 365.

Work 365 is the holistic business application built on the Microsoft Cloud, boosting customer engagement, unlocking sales and service opportunities, and collecting Cash. Explore how Microsoft CSP Partners are growing their business with Work 365.

Use your Microsoft co-op incentives as a CSP reseller to accelerate growth

Microsoft co-op incentives

Quick Background: In Jan 2020, Microsoft started accumulating funds through the co-op program for its CSP resellers. CSP partners have been accumulating funds that can be deployed starting in July 2020.

These co-op funds can be used by Microsoft channel resellers towards qualified activities that grow their business. In addition to driving demand co-op investment funds are meant to help resellers focus on these critical areas:

  1. Creating and sustaining recurring revenue – greater certainty and stability.
  2. Maximize customer engagement – invest in relationships and become a trusted advisor, increasing engagement and adoption.
  3. Deliver additional services – upsell and cross-sell opportunities.

The Microsoft co-op guide directly lists various qualified activities, including demand generation activities like tradeshows and events. Neither of which are viable opportunities in a COVID-dictated 2020. Along with marketing activities, what is not always obvious is the opportunity to automate processes. Microsoft Direct resellers incur a significant burden in managing and provisioning seats and services.

Investing in a branded self-service site that allows your customers to manage their current services, while also purchasing new services, saves you time and resources and grows revenue.

Resellers with self-service portals can offload almost 80% of provisioning changes, significantly increasing customer satisfaction, and freeing up time to pursue other value-adding activities.

The guidebook explicitly states that you can use these funds for branding activities. These branded self-service portals facilitate customer engagement, demand generation, and revenue growth in five main ways:

  1. It’s what clients want.
    • Customers want increased transparency, the ability to manage services themselves, and real-time insight into costs and billing.
  1. It’s a direct channel for customer collaboration and communication.
    • Once implemented, these portals provide targeted information and allow your team to communicate (and market) directly to these customers when managing this portal.
  1. They eliminate work for your team and the customer.
    • Fewer emails, less back-and-forth, more automation = less effort.
  1. It unlocks upsell and cross-sell opportunities.
    • These portals provide additional visibility into product catalogs, and your unique offerings, facilitating more in-depth conversations around business needs.
  1. Payments and billing are automated.
    • Add unique services, your IP, and other new products to the existing subscription account.

The good news?

Work 365 helps you accomplish all the above, and you can apply co-op funds to utilize Work 365 solutions.

How does Work 365 help:

  1. Create your own company-branded, self-service portal.
    • Work 365 enables you to build a portal for your customers to view usage data, access personalized pricing, and create a customized product catalog.
  1. Integrate your Provisioning, Billing and Payments systems with Work 365.
    • Focus more on business needs and product value through more in-depth discussions with clients on how to grow their business.
  1. Identify business trends and insights with the data and reporting.
    • Have all your teams work in one system that includes all your customer data.

The Microsoft co-op program incentivizes resellers to invest in their growth using Microsoft funds. Work 365 can help you along with that journey.

To learn more about how Work 365 can help you accelerate your business growth at scale, while using co-op funds for the investment, follow the link  HERE.

Sales acceleration with Product Catalog and Pricing at your finger tips

Product Catalog and Pricing

Sales are customer-initiated through self-service or through your internal Sales team. Either way, both of these channels rely on having accurate pricing and service availability. The CSP product catalog for Microsoft partners has close to a thousand subscription services with changes to product availability and pricing along with availability in different regions around the world.

Having current pricing in your product catalog for your sales team can boost sales, save time, and increase customer satisfaction. A customer using Microsoft Cloud services will tend to consume services in an additive way. They may start out with a basic service, add security, voice, and other services as they become more aware of their needs, transition existing services, or just adopt new products as they become available. The partner center makes it quite easy to provision new services. However, the provisioning process when it is disconnected from the sales and billing process creates a significant operational challenge for any Cloud Services provider.

Catalog Management

Catalog management or product catalog management helps you organize and consolidate e-commerce product data into a single, digital point of reference. In an optimal selling environment, the catalog maintains and stores product information for an e-commerce business client-facing portal and or your internal sales team. It’s the strategic process of managing and maintaining your product catalog to ensure the quality of your product data across all sales channels. It includes how you organize, standardize, and publish your product data to each channel. 

Catalog management ensures the quality of product data, by allowing an admin to update the product information in a catalog, so that customers can make informed buying decisions. The seller can help buyers make those decisions by providing important details for their decisionsThese solutions are typically bundled with additional e-commerce marketing software and other support tools. 

If you think about the concept of catalog management, it seems very simple, right? You just must maintain a single catalog of all the products you sell online. 

Unfortunately, this is hard to do for many reasons: 

  • Product Updates – in our industry, products are been constantly added, removed and their prices can change anytime. How would you keep up with all these changes? Is your sales team selling the product with the right pricing and markup?
  • Product Relationships – different types of products can make SKU management more complex and often have parent-child relationships that can be hard to manage. How do you ensure that SKUs relate to its parent item, but also are represented as individuals? 
  • Conciliate Third-Party Product Data – If you receive product data from third parties like Microsoft Partner Center, this data can come in all sorts of formats. You must make sure all attributes from different distributors are organized as necessary for your optimal operation.
  • Selling on Multiple Channels – another challenge of product data is managing it across multiple sales channels. Each of these channels requires a specific format of your product data for listing purposes.  
  • Customer-specific Pricing – the same product can vary in price according to your buyer. This is common practice in our industry. Individual customers or groups can have their own specific pricing structure. It’s important to maintain this information because you’ll want to ensure that the right prices show online for the right customers. Offering the best buying experience possible.  

Product data can become messy, fast. It can be tedious and time-consuming for businesses to normalize product data from other sources to meet their internal requirements. In our industry, many businesses often have large teams who spend weeks compiling, updating, and publishing product data. Not only is it hard on your operations, but it can also result in the wrong and inconsistent data on your website for customers. 

With all these issues in mind, our team developed a simple, straightforward forward but robust product catalog for our Work 365 Billing and subscription application. Watch our quick video about our new feature! 


If you have any questions don’t hesitate in scheduling a demo.

​​Best Practices to Get Paid Faster – Building a Successful Recurring/Subscription Business​

Recurring or Subscription Business

As Simon Sinek says – “Start with Why”?

Volumes play an important role in a recurring or subscription business. This revenue is billed more frequently, in fact monthly- for 1 customer you are generating 12 invoices a year! The invoices are typically smaller in size than one-off sales. If you are reselling products (which is true for most Microsoft CSP Partners), the margins are tight. If customers don’t pay or delay payments, there is an impact on cash-flow.

How to Collect Cash Faster?

Step 0: Sell to who will pay: In order to make sure there is no risk of non-payments you need to establish credit limits, do background checks and ensure that you won’t be left with the proverbial “bag in hand”- this is typically part of your Sales Process.

Step 1: Invoice Accurately. An accurate invoice is correct on all counts.

  • Who has the check or credit card? It could be the finance department, the procurement department, and the IT manager or relevant stakeholders who would need to approve your invoice.
  • What are exactly are they getting billed for? Are all the services and subscriptions correct, prices, changes in quantities, and refunds clearly shown in the invoice so that there isn’t any confusion?
  • When do they need to pay and most importantly receive the invoice? Is the invoice being sent to the customer on the correct date and with the correct due dates?  The invoice needs delivery needs to predictable. We see so many cases where customers have cash flow issues but are not able to generate an accurate invoice on the correct date based on the billing frequency.

Step 2: Invoice: Delivery, Persistent, Actionable, Convenient: It’s imperative your invoice is delivered to the right stakeholders in a medium that is acceptable to them (email, mailed physical signed copies). Is the invoice persistent? Can the invoice be easily accessed by the intended audience? A self-service portal that shows their orders and invoices would allow them to access your invoice when they need it. Is the invoice actionable: Does it clearly state how to pay you and how convenient is it to pay you?

“The customer experience is the sum total of all customer moments. The invoice is a defining customer moment. “

What Systems are Involved in Generating an Invoice and Collecting Cash?

The problem with the above situation is that while you’ve got all the pieces together:

  • There are multiple logins/identities
  • Your brand is diluted and there is no consistency is not there because of the different looks and feels.
  • Data is the new oil – and it’s messy to have oil all over the place
  • Access to these systems is limited and to a few people. The lack of access to this data creates problems like selling to customers you don’t want to, inability to create an accurate invoice.

What is Required for a Successful Billing Automation Solution to Generate Accurate Invoices and Collect Cash?

  • Customer data in one system 
  • Single Identity 
  • Single Portal for everything: what they’ve bought from you, when they bought is from you, agreements, invoices 

Cash Collection is a business function: 

  • Credit Limit should be associated with Aging Data and affect new Sales 
  • The customer Payment information should be in the customer system 
  • Automate Collections using Payment Gateways 
  • Don’t reward bad behavior – Credit Holds so that provisioning is stopped 

Work 365 offers a Billing and Subscription application that helps cloud companies archive the necessary requirements and processes to grow your revenue. Learn more here.

Adjusting the Billing Contract to the New Frequency Using Work 365

Billing Contract Changes

Annual billing contracts are always great if you can get your customer to agree with them. It is great for your cash flow; it reduces the impact of the billing standpoint and your collection. Several companies enjoy the facilitation Annual Contracts brings to the table. But in today’s ever-changing environment you might be asked by your customers to change their billing cycle.

Then, what should you do?

There are two specific scenarios that you want to think about when it comes to change a Billing Cycle from annual to monthly or quarterly:

Scenario 1

The relationship changes at the renewing of the contract. The customer had an Annual contract and now wants a Monthly contract.



  • Run the Change Log Invoice

This step is important because if there were any changes that happened between the last billing date and the last time you invoiced your client. You want to make sure you will include all those changes to the new invoice which you can see using the Change Log Invoice.

  • Adjust the Sales Unit and Sales Price, if needed

Work 365 can divide or multiply based on which sales unit was set up as the sales price and adjust on what needs to be invoiced at the time the invoice is generated. You need to take extra care if you sell your own IP where the annual price is different from the monthly price.

  • Adjust the Billing Contract to the new frequency

This is the simple step you need to perform in the billing contract to change the frequency of your invoice.

Scenario 2

The relationship changes in the middle of the contract. The changes are made mid-cycle. They want to add more licenses or products and they don’t want an Annual billing right now to conserve their cash flow. If you add the new changes to the current billing contract the invoice that is generated will show the balance for the year.


  • Create a brand-new subscription to accommodate the change and associate it with the new billing contract

You will want to create a new subscription and associate it with a new billing contract because this is an existing relationship that will be billed using the original frequency as it was set up in the billing contract.

The Need for Collecting Cash Fast

Collecting Cash Fast

Accounts Receivables processes can take up valuable time and energy in any organization. This is why “Collecting Cash fast” is one of the key metrics for building a successful recurring business. Very often the longer it takes to collect cash the higher the risk of collecting that cash correctly. You need to ensure that you are collecting the payment as quickly as possible.

Work 365 supports the typical billing frequencies – Monthly, Quarterly, and Annual billing. Some of the data we see with users of the application and the billing frequencies:

More than 70% off the invoicing is on a monthly basis. Monthly billing is the most common way of billing CSP and cloud services. Annual billing tends to be used by ISV’s and other solution providers that bundle their products or package their solutions through CSP.

Collecting cash through automated systems lowers the risk of non-payment, and reduces your DSO (Days of Sale Outstanding).mUsing manual processes like check payments is not practical for monthly payments. Typically, you want to keep your DSO to 30 days and lower than 7 days for monthly billing contracts.

Work 365, maintains the schedules for your billing relationships and using the integrated payment solutions can provide a convenient way to collect cash either through credit cards or direct debit solutions through Global leaders in payment solutions like Stripe,, and GoCardless.

The video above demonstrates how you can leverage these integrated payment providers directly into Work 365.

So, what’s your DSO? Let us know your thoughts schedule a demo to discuss these options.