Billing and Invoicing Microsoft Cloud Solution Provider

Content Billing Basics Invoices on Partner Center Reconciliation Files on Partner Center Licensed Based Billing Usage Based Billing Billing FAQ’s Reconciliation File Details

Billing Basics This module introduces Microsoft billing basics for Cloud Solution Providers, at the end of this module you will understand your billing date, payment terms and rules and how licensed based (subscriptions) and usage based (consumption) billing is provided to you.

Microsoft Cloud Solution Provider Program Billing Basics The Partner’s monthly billing date will be the date they sign their relevant Partner Agreement A confirmation email will be sent to notify the Partner of their billing date Billing Date Payment Terms – net 30 days All account payments should be made by the invoice due date (30 days after the billing date) Delinquent accounts are subject to suspension and/or termination from the CSP program Payment Terms One consolidated invoice for all online services Billing is based on seats sold and/or metered consumption of services depending on the services An Offer price is only guaranteed for the term of the subscription. Any appropriate Price list changes will come into effect upon subscription renewal Billing Rules Invoice and reconciliation files will be delivered in the Partner Center Files will be available for both viewing and download Invoice Availability Adjustments and credits are “in arrears” and will appear on the next monthly billing invoice after the credit or adjustment is applied Credits for test accounts and integration testing are not authorized. Please see the notes for details about how you can avoid charges for testing Adjustments/Credits/Cancellations In order to avoid subscription charges for testing, it is necessary to cancel the subscription during the “free period”, this will result in no charges being applied to your account. Please see Subscription Billing – “The Free Period” for more details. Note, this billing rule does NOT apply to consumption usage charges for Azure services – all consumption charges are the Partner’s responsibility

Licensed-Based Billing The Partner is not billed for any charges during the initial period from a subscription start date to the Partner’s first bill date (up to one full month) for subscription based services Up to One Free Month Incentives Subscriptions are annual and auto-renewed Billing is in 12 monthly payments per annual subscription The Partner is billed in advance for next billing period for subscription based services (based on seats at the end of prior billing period) Partner is billed/credited in arrears for any seat changes (Pro-Rata calculation based on seat-days) Pro-rata calculation uses the following formula: [ROUND((ROUND(Unit Price * Quantity / Number of days in pro-rated Month, 2) * Number of pro-rated days) / Quantity, 2) * Quantity] Payments are billed for seats sold (not seats provisioned) Billing Rules Early termination fees are currently not charged for cancellation of licensed based services Cancellation credits for licensed based services are pro-rated for unused days for mid-cycle cancellations (as well as seat decreases per the formula above) Adjustments Credits Cancelations

License-Based Billing – “The Free Period” Subscription Term Alignment to Partner’s Billing Date Free Service are provided in the period from the start date of the subscription to the date of next consolidate bill (which is the same for all subscriptions provided by the partner). This is regardless of seat count. Following this, 12 monthly advance charges aligned to Partner’s bill date apply. This results in simpler billing reconciliation All subscriptions auto-renew for a new 12 month period with 12 monthly advanced charges if not canceled in line with the appropriate agreements. The Free Period does not apply to Usage-Based services. Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Annual agreement charges billed as a series of Advance Monthly Charges Free 12/15/x0 1/15/x1 2/15/x1 3/15/x1 4/15/x1 5/15/x1 6/15/x1 7/15/x1 8/15/x1 9/15/x1 10/15/x1 11/15/x1 Subscription term (1 year + free period) - starts when service starts Partner’s Billing Cadence i.e. 15th of the month

Usage-Based Billing Usage Based Billing Billing Rules Adjustments Azure operates as Pay as you go model in which the partner is only billed for Azure services used. Azure usage charges start from the subscription start date and consists of charge for data consumed. There is no “Free Period” for Usage-Based Billing. Usage Based Billing Subscriptions are month-to-month and auto-renewed. Billing is monthly in arrears. Billing is based on usage. Metered service rates can change mid-month. Any Rates that move down will be reflected for the entire billing month; any rates that move up will be reflected the beginning of the next month. One consolidated invoice is provided for all subscriptions. The Partner is billed in arrears for the previous billing period (based on usage at the end of prior billing period). The Partner is billed in arrears for service changes (i.e. usage on any new service started during the month). Billing Rules Payments with adjustments will appear on the next monthly billing invoice. At present early termination fees are not charged for cancellations. Credits of any type, including SLA credits, will appear on the next monthly billing invoice. Adjustments Credits Cancelations

Reconciliation Files on Partner Center This module will show you how to access crucial billing information and your invoices directly on Partner Center and give you an example of a Microsoft invoice.

SAMPLE Billing Overview The Partner Center Dashboard Overview is where you will find a high level summary of your account. ❶ In the lower part of the Dashboard a dedicated Billing Summary show you the balance due, your recent invoices and reconsolidation files and your last payment. ❷ You can also quickly access your billing history. ❷ ❶

SAMPLE Billing Details Page The Partner Center Dashboard Billing Page is where you will find a summary of your billing activity. The top half of the page is current billing activity and trend. The lower half is the billing history section. ❶ The total account balance is displayed prominently in the Center of the page. ❷ Links to your invoice PDF and recon files are directly below the balance due. ❸ Last payment received is also displayed. SAMPLE ❶ ❷ ❸

The Invoice Your invoice can be viewed online or downloaded on the Partner Center Dashboard Billing Page. The invoice is a summary of all charges (across the program and products) for the current monthly period. ❶ Total Current Charges is the amount the Partner is due to pay by the ❷ payment due date. ❸ The Payment Instructions gives details on how to pay your invoice. The instructions vary from region, please refer to your invoice for the actual payment instructions. The invoice does not contain details about the charges. Details of charges including customer references are located in the appropriate Reconciliation Files. ❷ ❶ ❸ SAMPLE NOTE – this invoice is only a sample, exact details may vary by geography (ex: payment instructions, currency, tax treatment)

Invoices on Partner Center This module will introduce you to the reconciliation files available on Partner Center and point out how to use them.

License-Based (Seat Subscription) Reconciliation File The reconciliation file (recon file) provides a detailed “line-item” view of each billing event These billing events can be tied back to the orders within the Partner Center using the “Syndication_Partner_Subscription_Number” from the recon file and the “Subscription ID” from the Partner Center See Appendix for detailed descriptions of all columns provided in the Reconciliation File, the screenshot is not showing all available fields.

Usage-Based Reconciliation File The reconciliation file (recon file) provides a monthly summary view of each billing event These billing events can be tied back to the orders within the Partner Center using the “Reseller ID & Name & Reseller BillableAccount ID” from the recon file and the “Subscription ID” from the Partner Center See Appendix for detailed descriptions of all columns provided in the Reconciliation File, the screenshot is not showing all available fields.

Subscription Billing (License Based) Common Scenarios This module will show you common billing scenarios, how they are handled from a billing perspective. New Subscription is purchase Subscription remains unchanged for a billing period New Subscription is purchased with seat adjustments during the free period Seat increase / decrease for existing billed subscription Cancelation – no set changes prior to cancelling Cancelation – seat changes prior to cancelling

Subscription Start Date Basic Billing Scenarios: 1) New subscription is purchased The period between the start date of the subscription and the first billing date (for this subscription) is FREE, regardless of activity (ex: seat changes) The recon file will still show this initial use to reflect the seat count at each point * First Bill Cut Subscription Start Date Any Usage between the start date of the subscription and the first billing date (for this subscription) will be provided FREE OF CHARGE First Advance charge billed for the subscription * If a subscription is cancelled before its first billing cut, charges will not be applied to the account and won’t even be generated in the reconciliation file. This is particularly important if Partners want to perform testing but do not want to pay for subscription charges for testing.

Basic Billing Scenarios: 2) Subscription remains unchanged for a billing period Operating Unit A, performs no actions on subscription 123 during the billing period between June 15th and July 14th. Since there is no variation, the only charge reflected on the July 15th bill will be the advance charge for the following month July 15th (Billing Cut) Advance Charge: For the Whole Month Period from June 15th to July 14th billed on June 15th (on previous invoice) Advance Charge: For the Whole Month Period from July 15th to August 14th for 15 seats Assuming the Charge per Subscription per month is 10 USD , charge would be 10 USD x 15 seats = 150 USD The detailed table below describes the line items you would see in the reconciliation file for the above scenario: Since there is no variation, the only charge reflected on the July 15th bill will be the advance charge for the following month Subscription_Start_Date Subscription_End_Date Charge_Start_Date Charge_End_Date Charge_Type Unit_Price Quantity Amount Total_Other_Discount Sub_Total Tax Total_For_Customer 6/3/2013 0:00 6/15/2014 0:00 6/15/2013 0:00 7/14/2013 23:59 OLSRecurringCharge 10 15 150 165

Basic Billing Scenarios: 3) New subscription is purchased with seat adjustments during the free period Operating Unit A, whose billing cycle is on the 15th day of each month: Orders subscription 123 on June 3rd for 10 seats of SKU E3. On June 8th, Increases the seat count of the subscription 123 to 20 seats On June 12th, Decreases the seat count of the subscription 123 to 15 seats June 15th (Billing Cut) June 3rd June 8th June 12th Prorated Usage From: June 3rd To: June 7th For: 10 seats ZERO CHARGE Prorated Usage From: June 8th To: June 11th For: 20 seats ZERO CHARGE Prorated Usage From: June 12th To: June 14th For: 15 seats ZERO CHARGE Advance Charge: For the Whole Month Period from June 15th to July 14th. Assuming the Charge per Subscription per month is 10 USD , charge would be 10 USD x 15 seats = 150 USD The detailed table below describes the line items you would see in the reconciliation file for the above scenario: Due to the up to 30 days free incentive the first 3 line items will be charged at 0 Unit Price (as all of these seat changes occurred during the incentive period) The fourth line item will be the advance charge for the next billing period (from June 15th to July 14th in this example) Subscription_Start_Date Subscription_End_Date Charge_Start_Date Charge_End_Date Charge_Type Unit_Price Quantity Amount Total_Other_Discount Sub_Total Tax Total_For_Customer 6/3/2013 0:00 6/15/2014 0:00 6/7/2013 23:59 OLSRecurringCharge 10 6/8/2013 0:00 6/11/2013 23:59 20 6/12/2013 0:00 6/14/2013 23:59 15 6/15/2013 0:00 7/14/2013 23:59 150 165

Basic Billing Scenarios: 4) Seat increase / decrease for existing billed subscription Operating Unit A, performs the following seat adjustments to the existing subscription 123 during the period from July 15th to August 14th : On July 20th a seat decrease to a total of 12 On July 31st a seat increase to a total of 18 On August 10th a seat decrease to a total of 10 Items Included In the billing on August 15th: Jul 15th (Past Billing Cut) Aug 15th (Billing Cut) July 20th July 31st Aug 10th Prorated Usage From: July 15th To: July 19th For: 15 seats 26.61 USD Prorated Usage From: July 20th To: July 30th For: 12 seats 46.84 USD Prorated Usage From: July 31st To: August 9h For: 18 seats 63.87 USD Prorated Usage From: August 10th To: August 14th For: 10 seats 17.74 USD Advance Charge: For the Whole Month Period from August 15th to September 14th for 10 seats 110 USD Reversal of the Advance Charge: For the Whole Month Period from July 15th to August 14th. = - 165 USD

Basic Billing Scenarios: 4) Seat increase / decrease (cont.) (A) Price (B) Seats Charge Start Date Charge End Date (C)Number of days (D) Number of days in proration Period Sub Total (without Tax) * A x B x (C/D) 10 15 7/15/2013 7/19/2013 5 31 24.19 12 7/20/2013 7/30/2013 11 42.58 18 7/31/2013 8/9/2013 58.06 8/10/2013 8/14/2013 16.13 Prorated Charge Calculation: * Rounding may vary depending on currency considerations The detailed table below describes the line items you would see in the reconciliation file for the previous scenario: Subscription_Start_Date Subscription_End_Date Charge_Start_Date Charge_End_Date Charge_Type Unit_Price Quantity Amount Total_Other_Discount Sub_Total Tax Total_For_Customer 6/3/2013 0:00 6/15/2014 0:00 7/15/2013 0:00 8/14/2013 23:59 OLSRecurringCharge Credit 10 15 -150 -15 -165 7/19/2013 23:59 OLSRecurringCharge 24.19 2.42 26.61 7/20/2013 0:00 7/30/2013 23:59 12 42.58 4.26 46.84 7/31/2013 0:00 8/9/2013 23:59 18 58.06 5.81 63.87 8/10/2013 0:00 16.13 1.61 17.74 8/15/2013 0:00 9/14/2013 23:59 100 110

Basic Billing Scenarios: 5) Cancellation - no seat changes prior to cancelling Operating Unit A cancels subscription 123 on August 25th: Since the whole period has been billed in advance in the last billing statement, a “credit for unused days” is provided covering the period from August 25th to September 14th The credit for unused days should be the only line item regarding subscription 123 The line item should also reflect the Subscription End date as August 25th 2012 Aug 15th (Past Billing Cut) Sept 15th (Billing Cut) August 25th Previously Billed Advance Charge 10 seats from August 15th to September 14th 100 USD Consumed portion of the advance charge from August 15th to August 24th Credit for unused days From: August 25th To: September 14th For: 10 seats The detailed table below describes the line items you would see in the reconciliation file for the above scenario: Subscription_Start_Date Subscription_End_Date Charge_Start_Date Charge_End_Date Charge_Type Unit_Price Quantity Amount Total_Other_Discount Sub_Total Tax Total_For_Customer 6/3/2013 0:00 6/15/2014 0:00 8/25/2013 0:00 9/14/2013 23:59 OLSRecurringCharge Credit 10 -67.74 -6.77 -74.51

Basic Billing Scenarios: 6) Cancellation - seat changes prior to cancelling Assuming instead of Cancelling subscription 123 without making any seat changes Operating Unit A: First, decreases seats on August 25th to 5 seats Then, Cancels the subscription on September 1st Follows same logic as a bill change the advance charge is reversed and the actual use is using the same proration formula. The last portion from September 1st to September 14th is still provided as a “credit for unused days”. So, the bill on September 15th will reflect four line items related to Subscription 123. Aug 25th Sept 1st Aug 15th (Past Billing Cut) Sept 15th (Billing Cut) Previously Billed Advance Charge 10 seats from August 15th to September 14th 100 USD Prorated Usage From: August 15th To: August 24th For: 10 seats Prorated Usage From: August 25th To: September 14th For: 5 seats Credit for unused days From: September 1st To: September 14th For: 5 seats Reversal of the Advance Charge: For the Whole Month Period from August 15th to September14th. = - 100 USD The detailed table below describes the line items you would see in the reconciliation file for the above scenario: Subscription_Start_Date Subscription_End_Date Charge_Start_Date Charge_End_Date Charge_Type Unit_Price Quantity Amount Total_Other_Discount Sub_Total Tax Total_For_Customer 6/3/2013 0:00 6/15/2014 0:00 8/15/2013 0:00 9/14/2013 23:59 OLSRecurringCharge Credit 10 -100 -10 -110 8/24/2013 23:59 OLSRecurringCharge 32.26 3.23 35.49 8/25/2013 0:00 5 11.29 1.13 12.42 9/1/2013 0:00 -22.58 -2.26 -24.84

Consumption Billing (Usage Based) Common Scenarios This module will show you common billing scenarios for Azure

Subscription Start Date Azure Billing Scenario Billing is based on usage. A Partner is only billed for Azure services used, including during the initial period from subscription start date to the Partner’s first bill date (up to one full month). The recon file will show all usage by subscription. Subscription Start Date First Bill Cut Any Azure services or applications enabled and used between the start date of the subscription and the first billing date will appear on the first invoice. First invoice billed for the subscription, in arrears. Any Azure usage, including new services or applications enabled and used during the billing month, will be billed on the next invoice, etc. If a subscription is cancelled before its first billing cut, charges for any Azure usage will be generated in the reconciliation file. For useful information on how to create and/or use Azure services or applications, go to www.azure.com and select the “Features” heading.

Billing FAQ This module will provide answers to Frequently Asked Question about billing and your invoice

Frequently Asked Billing Questions Cloud Solution Provider Program On what day will I receive my monthly invoice? The day you sign your current CSP contract will be your billing date. This date is effective as of Pacific Standard Time. Can I change my billing date? No, once created, a billing date cannot be changed. Who does my invoice come from? Your monthly invoice and recon files will be delivered to the Partner Center where you can view and download them. How do I contact Microsoft regarding questions about my invoice or recon file? All questions or disputes should be raised through submitting a Service Request from the CSP Partner Center. How do I pay my invoice? Each monthly invoice will list the payment instructions for your operating country and currency. My billing admin has left my company - how do I update my billing admin? You must submit a Service Request in the Partner Center in order to update your billing admin contact. How do I tie my customer transactions in my recon file to my customer records in the Partner Center? The Syndication_Partner_Subscription_Number maps to the Subscription ID in the Partner Center.

Frequently Asked Billing Questions Tax On what location I will be taxed? Partner’s will be taxed based on their details (not the end customer) as the billing relationship is between Microsoft entity and the Partner. Where I can submit my Tax ID As a Partner you have two options: during on-boarding or submit via service request in order to update your Tax ID. The changes will be reflected on the next billing cycle. Where I can submit my tax exemption certificates Partners are required to submit tax documentation via service request in order to be exempted from tax charges. The changes and appropriate refunds will be visibility on the next billing cycle. Will I receive my documents in hardcopy version All documents, such as invoices will be provided electronically unless you are in a location where hardcopies are required and pre-approved by Microsoft. Where can I get more details on taxes? Further details can be provided by your local tax office or your tax advisor.

Reconciliation File Details This module provides you with exhaustive details about the columns used in the reconciliation files.

Reconciliation File Columns – Detailed Description Comment Sample Operating_Unit Unique identifier for specific billing entity Useful detail but not for reconciliation. Same in all rows. 8dd03642-test-test-test-46b58d356b4e Customer_Number Customer unique identifier in Microsoft billing platform Unique Identifier associated to customer in Microsoft billing platform. It may be useful to identify customer when contacting support but not for reconciliation. 123456789 Order_ID Order unique identifier in Microsoft billing platform Unique Identifier associated to order in Microsoft billing platform. It may be useful to identify order when contacting support but not for reconciliation. 566890604832738111 Subscription_ID Subscription unique identifier in Microsoft billing platform Unique Identifier associated to subscription in Microsoft billing platform. It may be useful to identify subscription when contacting support but not for reconciliation. NOTE: This is not the same as the Subscription ID on the PAC. Please see Syndication_Partner_Subscription_Number usCBMgAAAAAAAAIA Syndication_Partner_Subscription_Number Unique identifier for subscriptions A customer can have multiple subscriptions for the same plan, so this is an important for Recon File analysis. This field maps to the Subscription ID in the Partner Admin Console. fb977ab5-test-test-test-24c8d9591708 Offer_ID Unique Offer ID Standard Offer ID as per pricelist 306855 Durable_Offer_ID Unique Durable Offer ID 1017D7F3-6D7F-4BFA-BDD8-79BC8F104E0C Offer_Name Service offering purchased by the customer Standard Service Name Microsoft Office 365 (Plan E3) Subscription_Start_Date Subscription start date is the day after the order is submitted By looking at subscription start date in conjunction with end date, you can understand if we are still within the first year of the subscription or the subscription has renewed for the following year. Time is always the beginning of the day - 0:00; irrelevant. 1/23/2014 0:00 Subscription_End_Date Subscription end-date - 12 months + x days after start date (to align to Partner Billing date) or 12 months from renewal date At renewal prices are aligned to current pricelist. Customer communication may be required in advance of automated renewal. Time is always the beginning of the day – 0:00; irrelevant. 2/1/2015 0:00 Charge_Start_Date Start day of the charges This is the most important field for reconciliation; it calls out the start day of the charges. This becomes very important when customer changes seat numbers as it will multiply lines in Recon File and the charges will be per day (pro-rata calculation). 2/1/2014 0:00 Charge_End_Date End day of the charges This is the most important field for reconciliation; it calls out the end date of the charges. This becomes very important when customer changes seat numbers as it will multiply lines in Recon File and the charges will be per day (pro-rata calculation). 2/28/2014 23:59

Subscription Reconciliation File Columns – Detailed (cont.) Description Comment Sample Charge_Type Specifies the type of charges or adjustment Event Action Event Description CYCLE_INITRES Initial usage free of charge Charge CYCLE_FEE Advance monthly charge CANCEL_PRORATE Reversal of last period’s advanced charge Proration CYCLE_INSTANCEPRORATE Prorated adjusted usage charge for seat adjustment Credit for unused days upon cancellation CREDIT MSFT Issued Credit Credit Column Description Comment Sample Unit_Price Price per seat Key field for reconciliation with Partner system information 6.82 Quantity Number of seats 2 Amount Total of Price for Quantity Useful to check that amount calculation matches on how you calculate this for your customers 13.32 Total_CAL_Discount Not available Irrelevant column. N/A Total_Other_Discount Amount of discount applied to these charges Orders with discount (special deal), IUR or new subscription eligible for free month incentive will have discount in these columns. IUR and free month have 100% discount 2.32 SubTotal Total before tax To be checked if it matches with expected total in case of discount 11 Tax  Tax amount charged Tax treatment applied per each geography’s tax rules and each specific Partner’s tax circumstances Total_for_customer Total after tax To be checked only for those Partners that are charged Tax in the invoice Currency Same for all rows. Each billing entity has only one currency. To be checked only with first invoice or after major billing platform updates EUR Customer_Name Customer name as reported in PAC Test Customer A

Usage-Based Reconciliation File Columns – Detailed Description Sample Service Name Name of the Azure service All Services Service Type Utilized to further break down the Service for Windows Azure services Service Bus – Individual or Pack SQL Azure database – Business or Web Edition ResourceGUID The identifier that rolls up all Service data and ties it to the price list DA41BC5F-C52D-4464-8A8D-8C8DCC43503B Resource/Resource Name Name of the Azure Resource Data Transfer In (GB) Data Transfer Out (GB) Region The region the usage applies to. Primarily used to assign rates to data transfers as rates vary by region. Asia Pacific, Europe, Latin America, North America Consumed Quantity The amount of service consumed (hours, GB, etc.), during each month of the selected quarter Consumption Price This rate is calculated using the monthly consumption charges for a unit of service. $.03/min MeteredRegion This column identifies the location of a data center within the region for services where this is applicable and populated. East Asia, South East Asia, North Europe, West Europe, North Central US, South Central US MeteredService This column is utilized to track the individual Microsoft Azure service that may not be specifically identified in the Service Name column. For example, data transfers are reported as "Microsoft Azure - All Services" in the Service Name column. This MeteredService column will indicate which specific service the usage pertains. AccessControl, CDN, Compute, Database, ServiceBus, Storage MeteredServiceType Project ServiceInfo1 The number of ServiceBus connections that were provisioned and utilized on a given day. For example, if you had an individually provisioned connection during a 30 day month, Service Info 1 would read “1.000000 Connections / 30 days”. If you had a 25 pack of ServiceBus connections provisioned and you had utilized 1 during that day, your daily usage statement for that day would indicate “25 Connections / 30 Days – Used: 1.000000”.