Managing Allowances

Allowances can be created as part of a contract creation process or a contract change process. Let’s look at the steps involved when a new contract is created along with an allowance:

1. Create a subscription order with an allowance subscription product.

   In SAP Subscription Order Management, a new subscription order is created, released, and leads to the creation of a provider contract in SAP Convergent Charging and SAP Convergent Invoicing.

2. In SAP Subscription Order Management, a chargeable item charging request is sent to Convergent Charging. The chargeable item is processed.
3. During the execution of the price plan of a charge, a "Create Allowance" operator component is executed. This step creates an allowance based on the information passed in the chargeable item.
4. The charge calculates its rates and triggers a billable item charging for the allowance the customer has purchased. This billable item will contain the amount of 100,- € charged to the customer, which will end up on the customer’s invoice.
5. Additionally, the consumption item is passed to SAP Convergent Invoicing in the status "rated", so that during a rerating process the allowance creation is repeated as well.
6. The allowance initialization sets up counters as needed, and triggers a billable item of its own to capture deferred revenues. The billable item will contain the following field values:

When the allowance is activated, SAP Convergent Charging can be used to send a billable item for information purposes. The item is not important with regards to deferred revenues.

In this example, the activation process triggers the creation of a billable item that is assigned to a specific billable item type, that signals the availability of the balance from a certain time onwards.

1. Activation Date is reached → Trigger.
2. Create BIT for allowance activation from allowance logic.

The following figure shows the allowance consumption process with billable items for deferred revenue realization.

1. The process usually starts with a mediation system sending a usage data record for rating and charging to SAP Convergent Charging.
2. The consumption item is passed on to SAP Convergent Invoicing in the status "rated".
3. For the debit part of the invoice, the charge processing the consumption item creates a billable item in SAP Convergent Invoicing with a normal usage tariff.
4. The consumption item is passed to a dependent charge responsible for allowance consumptions. This charge sends the usage to all available allowances for settlement.
5. The consumption of the allowance balance triggers from an "Allowance Event Sender" component in the dependent charge. The charge sends an allowance event based on an allowance event class to the allowance logic.
6. The allowance settles the consumption with its available balance and updates the allowance event accordingly. It also creates a billable item that reflects the consumed amount of the allowance balance to realize the appropriate deferred revenue.
7. Optionally, if the consumed amount is not (completely) covered by the balance amount of the allowance, the allowance event is passed to subsequent valid allowances for processing.
8. Once the allowance event has been processed and updated by all qualified allowances, it is passed back to the dependent charge, that has sent the allowance event in the first place.
9. The dependent charge uses the updated consumption item to create a discount billable item with the volume of the total allowance consumption (returned in a previous step).

When allowances expire, a trigger is available to execute a specific allowance logic. Usually this allowance logic reports any remaining balance in the allowance as expired, and thus as eligible to be posted as revenue.

The allowance expiration is a three-step process:

1. When the expiration date is reached, the corresponding trigger executes the associated allowance logic tree.
2. Depending on deferred revenue requirements, the allowance may or may not create a billable item to allow for a proper revenue realization.
3. Create a dependent item (see convergent invoicing functionality) for the creation of a credit billable item.

The allowance interface is a collection of parameters and counters that are added to all allowances. Some functionalities require you to add a parameter or counter to the allowance interface before you can use it elsewhere.

The allowance property introducer is such a component. While the allowance interface is there for a reason, you should always be aware that adding a parameter or counter will add this parameter or counter to ALL allowances–also to the ones you will design in the future. Parameters and counters you have added to the allowance interface cannot be removed anymore.