Charge component is the billing component of the service opted by a customer. The charge component depends on the contract agreed by the customer and the organization providing the services.
Different charge components are Subscription, Rental, Membership, Maintenance, Installation etc. Some of these components are charged periodically and some are levied on demand. Charges components can be of three different types like, recurring, non-recurring and usage based.
Charge components are used based on the need. For example, to book sales under different GL Heads, to visually present the difference in the nature of the charge, to handle different tax rules on different types of charges and to group and track open items (receivables).
Charge components are defined in Charge Component screen.
For example:
Consider a customer with following details:
Contract start date = 15th Jan 2008
Contract Period =12months
Billing Frequency = 1
Billing cycle month =1
Billing cycle date = 1 (1st of every month)
The charges that will be generated are:
Regular charges (all recurring charge including subscription charge) from 01/02/2003 to 31/01/2008
Prorata charges (based on the prorata rule defined in the system)
All kind of NRC charges such as Hardware charge, installation charge, etc.