The following billing scenarios will help you understand how a product with a free period will be billed depending on the billing settings defined on account and product level. The free period is applied only to new subscriptions. Every licenses adjustments for existing subscriptions are charged in full.

#1 Scenario - New Subscription is Purchased with Licenses Adjustments

Settings	Scenario
Customer Billing day: 1st of the month product is charged upfront: free period is enabled: Product billing cycle: monthly	On January 15th the customer purchases 5 "Office 365 Business" licenses with price 10.00 € / month On January 25th the customer purchases 3 extra licenses On February 22nd the customer purchases 1 extra license

Generated Charges:

	Invoice Date	Billing Period	Quantity	Unit Price	Discount	Total
JAN	15/01	15/01 - 31/01	5	5.49 €	100%	0.00 €
JAN	25/01	25/01 - 31/01	3	2.25 €	100%	0.00 €
FEB	01/02	01/02 - 28/02	8	10.00 €	0%	80.00 €
FEB	22/02	22/02 - 28/02	1	2.50 €	0%	2.50 €
MARCH	01/03	01/03 - 31/03	9	10.00 €	0%	90.00 €

#2 - New Subscription is Purchased with Licenses Adjustments + Price Protection

Settings

Scenario

Customer Billing day: 1st of the month

product is charged upfront:

free period is enabled:

Product price protection: 12 months

Product billing cycle: monthly

On January 15th the customer purchases 5 "Office 365 Business" licenses with price 10.00 € / month
On January 25th the customer purchases 3 extra licenses
On February 22nd the customer purchases 1 extra license
On June the price for Office 365 Business changes to 11.00 € / month

In cases where a product has both a free period and is under price protection, the price protection period starts after the free period
The protected price is the price the product had on purchase date, not on first billing day. In the above paradigm, the protected price will be the price on Jan 15th regardless if the price changed between Jan 15th and Feb 1st that is the first billing day for this subscription.

Generated Charges:

		Invoice Date	Billing Period	Quantity	Unit Price	Discount	Total
Free Period	JAN 2017	15/01	15/01 - 31/01	5	5.49 €	100%	0.00 €
Free Period	JAN 2017	25/01	25/01 - 31/01	3	2.25 €	100%	0.00 €
Price Protection Period	FEB 2017	01/02	01/02 - 28/02	8	10.00 €	0%	80.00 €
	FEB 2017	22/02	22/02 - 28/02	1	2.50 €	0%	2.50 €
	MARCH 2017	01/03	01/03 - 31/03	9	10.00 €	0%	90.00 €
	...
	FEB 2018	01/02/2018	01/02 - 28/02	9	11.00 €	0%	99.00 €

#3 - New Subscription is Purchased with Licenses Adjustments + Add-on Purchases

You can enable the free period for add-ons too. The period between the first purchase of the add-on and the next billing day of the subscription, it will be free of charge for the add-on regardless of how many add-on licenses you purchase during this period.

Settings	Scenario
Customer Billing day: 1st of the month product is charged upfront: free period is enabled: free period is enabled for add-on: Product billing cycle: monthly	On January 15th the customer purchases 5 "Office 365 Business" licenses with price 10.00 € / month On January 25th the customer purchases 3 extra licenses On February 22nd the customer purchases 1 extra license On March 10th the customer purchases 2 licenses for the add-on "Exchange Online Advanced Threat Protection" with price 2.00 € / month

Generated Charges:

	Invoice Date	Product	Billing Period	Quantity	Unit Price	Discount	Total
JAN	15/01	Office 365 Business	15/01 - 31/01	5	5.49 €	100%	0.00 €
JAN	25/01	Office 365 Business	25/01 - 31/01	3	2.25 €	100%	0.00 €
FEB	01/02	Office 365 Business	01/02 - 28/02	8	10.00 €	0%	80.00 €
FEB	22/02	Office 365 Business	22/02 - 28/02	1	2.50 €	0%	2.50 €
MARCH	01/03	Office 365 Business	01/03 - 31/03	9	10.00 €	0%	90.00 €
MARCH	10/03	Exchange Online Advanced Threat Protection	10/03 - 31/03	2	7.10 €	100%	0.00 €
APRIL	01/04	Exchange Online Advanced Threat Protection	01/04 - 30/04	2	2.00 €	0%	2.00 €
APRIL	01/04	Office 365 Business	01/04 - 30/04	9	10.00 €	0%	90.00 €

#4 Non-Prorated Billing for Subscription with Licenses Adjustments

Since there isn't a specific day that the customer is billed, the first billing cycle of the subscription will be a full month and it will be free of charge.

Settings	Scenario
Customer Billing day: no specific day product is charged upfront: free period is enabled: Product billing cycle: monthly	On January 11th the customer purchases 5 "Office 365 Business" licenses with price 10.00 € / month On January 25th the customer purchases 3 extra licenses On February 22nd the customer purchases 1 extra license

Generated Charges:

Invoice Date	Billing Period	Quantity	Unit Price	Discount	Total
1/01	11/01 - 10/02	5	10.00 €	100%	0.00 €
25/01	25/01 - 10/02	3	5.48 €	100%	0.00 €
11/02	11/02 - 10/03	8	10.00 €	0%	80.00 €
22/02	22/02 - 10/03	1	5.50 €	0%	5.50 €
11/03	11/03 - 10/04	9	10.00 €	0%	90.00 €

#5 - Product Under Promotion

When a product with a free period is under promotion, the promotion will start when the free period will end.

Settings	Scenario
Customer Billing day: 1st day of the month product is charged upfront: free period is enabled: Product billing cycle: monthly Product is under Promotion:	On January 15th the customer purchases 5 "Office 365 Business" licenses with price 10.00 € / month On January 25th the customer purchases 3 extra licenses The product is under promotion that gives 20% off for the first 2 months

Generated Charges:

	Invoice Date	Billing Period	Quantity	Unit Price	Discount	Total
JAN	15/01	15/01 - 31/01	5	5.49 €	100%	0.00 €
JAN	25/01	25/01 - 31/01	3	2.25 €	100%	0.00 €
FEB	01/02	01/02 - 28/02	8	10.00 €	20%	64.00 €
MARCH	01/03	01/03 - 31/03	8	10.00 €	20%	64.00 €
APRIL	01/04	01/04 - 30/04	8	10.00 €	0%	80.00 €

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