Its likely you are updating your MSA or Microsoft contracts to reduce your liability with New Commerce. I talked about this more in my previous article but your contracts terms should state that the customer be obligated for a full year term to get existing rates or they have to pay the premium to stay on monthly’s. (This needs to be black and white in my opinion). On the PSA side you really have two options:

• Maintain your existing contracts/agreements
  • Pros
    • You don’t have to manually create all new contracts
  • Create new contracts
    • Pros
      • You don’t have to close date/cancel legacy line items for old M365 skus when you upgrade to NCE product line (Basically start fresh)

The massive complexity that comes up now between contracts and NCE is renewal dates. Renewal dates are going to be on a per subscription basis at the time of purchase or “upgrade” from the legacy products. Its possible that you could have MANY different renewal dates on a PER COMPANY BASIS if they are not ordered on the same day. To add to this complexity, there are no decrements or cancellations mid-term, even on a monthly contract, after the first 72 hours of purchase/increment.

I know all of this gets super confusing so let us break this down in an example. Taking the example from above we have a customer purchasing two subscriptions of BP on an annual and monthly. In your PSA tool you would first think to just add both of these subscriptions to the same agreement:

M365 BP Annual Paid Monthly =>Monthly agreement/contract

M365 BP Monthly => Monthly agreement/contract

For the sake of simplicity lets say both of these were purchased on 2/1/22 so they both have the same renewal DAY. You could add some automation on the PSA side to alert customer contacts when the annual was 30 days from renewal so they could have a chance to change their seats and you could tell them that all seat changes for monthly must be submitted by prior to the first of the month. (This would allow you to make changes before your next billing cycle.)

Let us now look at an example where these were not the same renewal

M365 BP Annual Paid Monthly =>Renewal = 02/01/23

M365 BP Monthly => Renewal = 03/04/23

What do you do here? If you invoice out on the 1^st of the month, you can’t simply tell the client that they have to get in all their changes prior to the first of the month. I say that because technically, you cannot move down in seat count until you hit that renewal (in this example, 3/4). This means if you were to change their billable quantity in PSA, there would be a discrepancy between you and the distributor (meaning you would be paying more for those 4 days where the seat count was higher).

You would essentially have to bill them the full month of March for seat count on 3/1, decrement on your renewal, get a prorated credit from the distributor, and add that credit to their April invoice. (this way you wouldn’t ever be billed more than you are invoicing out.)

What a nightmare that could become across all customers. Mostly because you have to know your window in which you can decrement (credit reconciliation aside).

This leads to two potential options here to help reduce operational overhead

1. Try to “upgrade” or purchase NCE products on the first of the month to match up your billing cycle
2. Create separate agreements/contracts per subscription if they have different renewal dates.
   1. This is one way to create more automation about the alerts of upcoming renewals

Based on the above, the worst possible thing you could do with NCE is to start “upgrading” customers current subscriptions on random days in the month.