Budget Billing

Budget Billing is a special stage that processes accounts that have signed up for budget billing plans. On a budget billing plan, an account is billed the same amount each cycle for a utility service with varying consumption levels, such as water. The amount charged on each bill, called the budgeted amount, is an estimated average of the bills for an entire year.

Because the amount billed is only an estimate, it is also important to keep track of the difference between the budgeted charges and the actual charges, called the variance. To settle the variance, the account must be billed for this amount from time to time.

The Budget Billing stage is only invoked if the Budget Billing feature switch is active, and if at least one account is on budget billing. Specifically, the task uses the BUDGETBILLINGFLAG column in the BILLING.ACCOUNT table to tell which accounts are on budget billing.

There are various actions that can be taken for accounts on budget billing. Depending on the status of each budget billing plan, the Budget Billing stage completes these steps:

1. Activate eligible budget billing plans.

   When you sign an account up for budget billing, the plan status is set to I (Initiated). The plan will become active after the plan start date. The first step in the Budget Billing stage is to search for plans with a status of I that have passed their plan start dates, and update the status to A (Active).

2. Calculate budgeted amounts.

   First, note that the Calculate Bills stage will already have calculated the actual charges for accounts on budget billing. The actual charges are the amounts they would be charged if they weren’t on budget billing plans. The actual charges are required to calculate both the budgeted line item amounts and the variance.

   Because the amount of each bill under a budget billing plan is predetermined, budget billing reverses the usual order of bill calculation. Instead of calculating the line items and then adding them up to determine the total amount of the bill, budget billing starts with the bill amount and then adjusts the line items so they add up to this amount.

   When calculating the budgeted amount, there are two types of line items to consider. Non-variable line items represent charges that don’t change from one bill to the next, such as a flat monthly connection fee. Non-variable line items are billed at their actual amounts. Variable line items, conversely, represent charges that are expected to vary, such as a line item for a metered water service. Variable line items are the ones that will be adjusted under a budget billing plan.

   To calculate the variable line items, the Budget Billing stage first subtracts all non-variable line items from the budgeted amount. The difference between the budgeted amount and the sum of the non-variable line items is then distributed among the variable line items. In most cases the distribution is weighted according to the actual amounts of the line items, using this formula:

   line item = (line item actual / total actual) * (budgeted amount - total non-variable)

   For example, suppose a plan has a budgeted amount of $80.00. The account is to be billed for one non-variable line item in the amount of $35.00, and two variable line items in the amounts of $60.00 and $40.00. The non-variable line item is first subtracted from the budgeted amount, leaving a difference of $45.00 to be distributed between the two variable line items. Following the weighted distribution, the line items will be billed at $27.00 and $18.00.

   (60.00 / 100.00) * (80.00 – 35.00) = 27.00

   (40.00 / 100.00) * (80.00 – 35.00) = 18.00

   The one exception is in cases of negative consumption. If an account on budget billing is to be billed for negative consumption, the difference between the budgeted amount and the non-variable line items is distributed equally among the variable line items.

   In addition, note that the bill might also include non-budgeted line items, which are not included in the budgeted amount. Thus the total amount of the bill can be greater than the budgeted amount.

3. Schedule settlements.

   Settlement is the process of billing an account for the cumulative variance under a budget billing plan. The process is broken down into two steps: first creating and scheduling the settlement, then billing the account for the settlement amount.

   The Budget Billing stage of the Bill Run Schedule task will create and schedule annual settlements for any budget billing plans whose next settlement dates are within the billing period for the bill run.

   For each settlement, there will be one record in the BILLING.SETTLEMENT table and one or more records to the BILLING.SETTLEMENTSCHEDULE table, depending on the budget billing plan. Each settlement schedule specifies the scheduled date and the amount to be settled. If the variance is to be settled on the last bill of the plan period, there will be one settlement schedule. If the variance is to be distributed over a certain number of cycle bills, there will be a settlement schedule for each bill.

   Note that you can also use Review Budget Billing or the Budget Billing Plan InfoViewer to schedule settlements manually. In addition, the variance will be settled when you close an account, suspend a service, or cancel a budget billing plan.

4. Process scheduled settlements.

   In this step, the Budget Billing stage creates line items for any settlement schedules whose scheduled dates fall within the billing period of the bill run. Infor Public Sector uses one-off line items for settlements, so you must have defined a one-off line item of type “Settlement” and associated it with the appropriate bill type.

5. Cancel budget billing

   Canceling a budget billing plan is a fairly simple process. The status is changed to C (Closed) and the end date is entered in the PLANENDDATE column of the BILLING.BUDGETBILLINGPLAN table. This step is included in the Budget Billing stage because a canceled plan can’t be closed until its variance has been settled. When you use Review Budget Billing or the Budget Billing Plan InfoViewer to cancel a plan, the status is first set to S (Settlement). After the variance is settled, the Budget Billing stage updates the plan status and the end date. If an account no longer has any active budget billing plans, the BUDGETBILLINGFLAG column in the BILLING.ACCOUNT table will also be set to ‘N.’