Introduction to the subscription management module

In the 2024 Wave 2 release, a new mini-module - subscription management - has appeared as part of the Essentials license. This module meets the growing needs of modern business, with more and more companies providing solutions based on a subscription (subscription) model. 

The set of functionalities brought together in the subscription management module lowers the threshold for entry into this area of doing business and easily enables the automation of business processes through the recording and cyclical accounting of operational activities, as well as a dedicated reporting area that will be developed in future releases.

The capabilities of the module are not limited to the classic billing of subscription services. Areas of potential application include:

• guarantees
• maintenance
• lease or management dues
• sale and settlement of prepaid services

In principle, support for everything that is invoiced on a recurring basis can take place in the subscription management module, which, together with the manufacturer's announced development of functionality, makes this module promising in the coming months.

Link to the manufacturer's website: Manage subscription billing andrevenue and expense recognition | Microsoft Learn

Basic configuration

The operational subscription management layer consists of: ‍

• packages of obligations to provide services
• stock files subject to invoicing
• specifying on the stock file the method of subscription fulfillment
• dedicated lists to manage registered contracts and commitments

Within the drop-down list on the inventory file, we have four options to choose from ( Prices and Sales section, Service Commitment Option field):

o default setting for each existing and newly entered file

o A commitment package cannot be assigned to a file

o not subject to actions within the subscription management module

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Sale with service commitment:

o A commitment package can be assigned to a file

o file is subject to actions within the subscription management module

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Subject of service obligation:

o possible to be set on files of non-stock type

o The file can be added manually on the sales order line, but the inventory value will not be posted on the sales order

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Subject of invoicing:

o possible to be set on files of non-stock type

o A file cannot be added manually on a sales order line

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The service commitment package consists of a header section and lines, where in separate columns the necessary information for further processing should be entered, among others:

• Is the commitment to be invoiced?
• What will be the basis for calculating the invoiced amount?
• What will be the invoicing period and cycle?

After configuring the commitment package, you need to assign the stock files that will be subject to the actions described in it. It is also possible to assign packages from the inventory file.

Application of the subscription module

The subscription module can be freely adapted to changing business conditions. One of the primary applications might be when a vendor offers an extended warranty on selected goods.

After configuring the package and inventory file to be subject to the extended warranty, information about the event will appear on the sales order in the Service Obligations column.

After posting the sales invoice, go to the Cyclical Invoicing page and, after completing the filters, select Create Invoicing Proposal. The system will search the rows of sales documents and indicate for which invoice creation actions should be performed. The Cyclic Invoicing page is also used to manage invoices before they are issued.

After making the selection, select Create Documents from the ribbon. The system will inform you that new documents have been created and will appear in the list of working invoices. The contents of the invoice are the line of the object subject to the service obligation and the lines of comments describing the service. The invoice amount results directly from the calculations for the service obligation package used.

When you post an invoice , an additional section , Accruals of the contract with the buyer, appears, where a full summary of the amounts resulting from the transaction and the date of settlement is available.

In conclusion, the subscription management module described in this post is an idea from software developer Business Central to further "make life easier" for users.

Stay tuned for future posts, where we are sure to present more improvements in this area!