What are recurring base fees and how to use them in contracts
This guide is about Recurring Base Fees. After reading this guide, you’ll have a basic understanding of base fees and how to add them to your contracts.
Required User Rights
To be able to use these operations, you’ll need at least the following user right: 3150 Menu – Contracts.
Recurring Base Fee
A Recurring Base Fee is one of the charging models in Good Sign Contract Model. The other charging models are Usage-Based Fees, One-Time Fees, and Work Invoicing. These will be discussed in other user guides.
Recurring Base Fees are continuous service subscriptions provided against a recurring fee with a predefined period and charge. For example, a company selling a SaaS solution can have a recurring fee that is based on the number of individual logins (per seat). The charges are always done separately for each month, but the charges can be invoiced in arrears or in advance for a given period, such as quarterly, semi-annual or yearly. The price of the Recurring Base Fee may also change over time.
Pricing models that can be used with Recurring Base Fees are:
- Unit
- Volume
- Tier
- Block
Charging models can be seen under Contracts and Contract Lines.
Charging models are used when creating a new Contract Line. To create a new Contract Line, select Management and then New Contract Line.
After pressing New Contract Line, a pop-up window appears where you can select the suitable Profile (Charging model) for the Contract Line:
By selecting Recurring base fee from the profiles drop-down menu, a new window appears:
There are no mandatory fields, but below is a table of the most used fields and their descriptions:
| Field | Description |
| Contract Line Valid From | Start date of the Service |
| Contract Line Valid To | End date of the Service |
| Charge offset months | You can define whether to invoice in advance or in arrears in the Charge offset months field. The current month is 0. Thus, if you want to invoice a year in advance, select 11. |
| Pricing model | Unit pricing, Tier pricing, Volume pricing and Block pricing. |
| Product | The product charged from this contract line is added to the Product field |
| Quantity |
Quantity of service Products to be included in the service. (Here, we are using a service Product called ”Monthly Base Fee”. We have set it up in the Product Catalog. A logical quantity for a monthly base fee is 1. |
Tip: If you wish to add a new service, first add it to the product catalog and then it will be available for selection in the contract lines
If Valid From is set to future, the charges will be formed the next morning of the valid from date. If a Valid To date is set, there will be no charges formed after that date. If the Valid To field is left empty, the field is then “evergreen” and there is no date limit for the charges other than the Valid From date.
Charge offset will change the formation of the charges so that the charges are formed in advance or in arrears.
After filling the needed fields, press Save.
Note! After the needed fields have been filled, an automatic charge will be made the next morning at 6 am Finnish time (given that the contract, contract line, product and price are valid at the time)