Recurring Revenue

The recurring revenue feature of Discovery looks against the active services for a given fiscal period and generates fees if that charge has not yet been invoiced. The fees we generate come from the list below:

  1. Scheduled Non-Passthrough Commercial Services
  2. Management Services
  3. Savings Incentives
  4. Invoice Processing Fees (for client invoices we have to print)
  5. Rental Services where Management Company is the Vendor
  6. Device Services where Management Company is the Vendor
  7. Prior Period Adjustments

Imagine a client decreases a service in the middle (15th) of the month, e.g. 2 bins to 1 bin. Because we bill in advance the client has already paid $100 for this service. The cost of the decreased service is now $75. Management Company needs to refund the client half their money back for the next month. For the next month the client owes Management Company $75 (for next month's service) - $50 (prior period adjustment) = $25.

One important thing to note here is that prior period adjustments are generated from revisions to the base_charge of client services.

We use a "timetable" to figure out which services need prior period adjustments. This timetable is populated by comparing the service levels' billing frequency and comparing them from the charges already generated. If there is a difference found then we know we should have either a prior period adjustment or a credit memo.

Here is an example of a prior period adjustment:

June 25 - base_rate = 200 (billed on this day for July 1st invoice June 26) 

base_rate = 300 (changes 1 day later July 25)

base_rate = 300 + $16.67 (billed on this day for August 1st invoice)

However above we are missing the prior period adjustment because from June 26th thru June 30th the charge should have been using the base cost of $300 not $200. July 1st invoice should have been

$200 * 25/30 + $300 * 5/30 = $216.67

However, we only billed $200. So the client still owes us $16.67 from the prior period. Thus for August the client invoice should total to $316.67 instead of just $300.