Billing Hierarchy

The billing hierarchy includes two types of accounts:

Responsible Account — An account with one or more associated managed accounts.
Managed Account — An account with an associated responsible account.

Billing hierarchy enables accounts to be linked so that a responsible account is invoiced for all charges of its associated managed accounts. Managed accounts are not invoiced.

When running a bill cycle, invoices are generated in one of two ways for accounts in a billing hierarchy:

Generate one aggregated invoice on the responsible account that includes charges from all managed accounts.
Generate a batch of individual invoices on the responsible account for each managed account.

An account that is not part of a billing hierarchy is neither a responsible account nor a managed account.

The Enable Responsible Account Management Billing system setting must be set to True to enable the creation of billing hierarchies. If you have created a billing hierarchy and change the setting of this system setting from True to False, you do not have to first remove a managed account from a responsible account.

System settings are managed in the Admin application’s Company module. Refer to System Settings for more information.

Billing hierarchy also affects how discounts are applied. The application of an account-level discount depends on whether they were applied at the responsible account level or at the managed account level:

An account-level discount on a responsible account applies to all invoices rolled up from their managed accounts to the responsible account and overrides any discount that may have been applied to a managed account.
If no account-level discounts are applied to a responsible account, then any discounts applied on a managed account will be applied to the managed account’s invoice item(s) and reflected on the responsible account’s invoices.

A managed payment method can be configured as part of the process of linking a managed account to a responsible account or it can be added after a managed account is linked. Managed payment methods are added as a payment method the managed account. If the payment method is configured for auto-payments and added as a managed payment method on the managed account, it can be used via the billing account hierarchy to make payments for orders that occurred on the managed account.

For example, a managed payment methods used for Stored Value Service (SVS) auto top-up contribution orders is added to a responsible account and then added to the managed account. An order is then made on the managed account using that managed payment method. The resulting payment for that order will be made from the responsible account.

Refer to the following topics in the User Guide for more information on creating a billing hierarchy:

Refer to Responsible and Managed Accounts if setting up billing hierarchy in the Customer Billing application.
Refer to Manage Billing Hierarchy if setting up billing hierarchy in the Accounts application.

Billing hierarchy is different than an account hierarchy. Refer to the Account Hierarchy Knowledge Base article for more information.

Topic updated: 07/2024.