1. Cloud Solution Provider

2. Billing Your Customers Considerations in the direct model

3. Cloud Solution Provider In the Direct CSP model, you own the billing relationship with your customers You set the payment terms that are right for your business and create the cash flow model you are looking for You choose the billing systems and software that you use to facilitate your customer billing relationship You prepare and send invoices to your end customers, and maintain receipts of payment You define late payment terms, and the dunning and collections associated with delinquent accounts Interfacing with our APIs will help you track customer transactions and bill at scale

4. Cloud Solution Provider Billing From Microsoft to Partner

5. Cloud Solution Provider Microsoft to Partner - Billing Basics The Partner’s monthly billing date will be the date they agree to the CSP Program terms in Partner Center. Billing dates will be from the 1 st to the 28 th of the month. Program terms agreed to on the 29 th to the 31 st of the month will have a billing date of the 1 st of the next month. A confirmation email will be sent to notify the Partner of their billing date Billing Date CSP Payment Terms are net 60 days All account payments must be made by the invoice due date (60 days after the billing date). Accounts not paid within 60 days of the billing date will be considered delinquent. Delinquent accounts are subject to suspension and/or termination from the CSP program Suspended accounts will not be allowed to create a new customer or order, request a reseller relationship, increase or decrease quantities of subscriptions, order add-on subscriptions, convert or transition a subscription and will be limited to managing existing customers, subscriptions and resources until the account is brought current. Partners can regain full functionality of their suspended accounts when they pay their outstanding bills. Payment Terms Partners will receive one consolidated invoice for all online services (with the exception of Marketplace Offers) 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

6. Cloud Solution Provider 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 shows you the balance due, your recent invoices and reconsolidation files and your last payment. ❷ You can also quickly access your billing history. ❶ ❷ SAMPLE

7. Cloud Solution Provider 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 due is displayed prominently in the Center of the page. ❷ Links to your invoice PDF and reconciliation files are directly below the balance due. ❸ The last payment received is also displayed. SAMPLE ❷ ❸ ❶

8. Cloud Solution Provider SAMPL E NOTE – this invoice is only a sample, exact details may vary by geography (ex: payment instructions, currency, tax treatment) 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 provide 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. The Invoice ❶ ❷ ❸ 8/27/2015 60 ❷

9. Cloud Solution Provider Licensed-Based Billing – Office 365, EMS, CRM Online, Dynamics AX, Intune 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 Subscription start dates will be from the 1 st to the 28 th of the month. Subscriptions purchased on the 29 th to the 31 st of the month will default to the 1 st of the month 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

10. Cloud Solution Provider License-Based Billing – “The Free Period” 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 Subscription term (1 year + free period) - starts when service starts Partner’s Billing Cadence i.e. 15 th of the month Subscription Term Alignment to Partner’s Billing Date

11. Cloud Solution Provider License-Based (Seat Subscription) Reconciliation File See Appendix for detailed descriptions of all columns provided in the Reconciliation File, the screenshot is not showing all available fields.Appendix 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

12. Cloud Solution Provider Usage-Based Billing – Microsoft Azure Azure operates a ‘Pay as You Go’ model in which the partner is only billed in arrears for Azure Services used from subscription start date. Service - category of individual meters Meter – resource for the specific Service attributes deployed (type, size, price, etc.) No “Free Period” for Usage-Based Billing. Usage Based Billing Subscriptions are month-to-month (aligns to Partner bill-cycle) and auto-renewed. Metered service rates can change within the invoice cycle. 30 day notice is provided for price increases via updates to the price list. Price decreases are reflected day of change. Existing subscriptions - billed at the rate in effect at the beginning of the current bill cycle. New subscriptions (created within bill cycle) - billed at the rate in effect at the create date. 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

13. Cloud Solution Provider Price Changes Billing Effective price per Subscription Create Date Example shows logic for a single Resource Meter in a subscription. Logic applies to all Resource Meters Each Service deployed within a subscription will have specific billing logic and rating. Partner selection of service attributes, i.e. tier, size, region, etc. determine Service’s Resource Meter. Azure consumption per Azure Resource Meter is always billed by the list price in effect when subscriptions are created. Azure subscriptions end with each billing cycle and auto-renew. Azure Effective Price Logic Subscription Start Date Billing for services consumed Any Azure services used between the start date of the subscription and the first billing date will appear on the first invoice. Billing for services consumed 1 st Bill3 rd Bill 2 nd Bill Subscription #1 @$1.20/hr @$1.17/hr @$1.33/hr @$1.09/hr Subscription #2 @$1.17/hr @$1.33/hr @$1.09/hr Subscription #3 @$1.09/hr @$1.33/hr $1.17/hr $1.20/hr $1.12/hr $1.33/hr $1.09/hr

14. Cloud Solution Provider Usage-Based Reconciliation File See Appendix for detailed descriptions of all columns provided in the Reconciliation File, the screenshot is not showing all available fields.Appendix The reconciliation file (recon file) includes monthly Summary and Daily views of each customer's billing event. Summary – Total consumption in billing cycle by each unique resource with calculated charges Daily - Daily consumption with Resource Meter details Summary ViewDaily View

15. Cloud Solution Provider 15 Frequently Asked Billing Questions On what day will I receive my monthly invoice? The day you sign your CSP contract will be your billing date. This date is effective as of Pacific Standard Time. Billing dates will be from the 1 st to the 28 th of the month. Agreements signed on the 29 th to the 31 st of the month will have a billing date of the 1 st of the next month. The invoice and recon file will be available on the Partner Center within 48 hours of 0:00 on your billing date. Can I change my billing date? No, once created, a billing date cannot be changed. When and how often are the CSP price lists updated? The CSP price lists (licensed and usage based offers) are updated on Partner Center at a minimum of 30 days prior to 1 st of month. 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. Customer Name field in recon file maps to Customer Name in Partner Center. Customer ID is in development for future version.

16. Cloud Solution Provider Are there any tax implications for partners reselling Office 365 Enterprise E5 Suite with PSTN services? In the United States the price billed to Partners and paid by Partners to Microsoft for the PSTN services includes applicable taxes and fees. In the United States, if a Partner marks up the price of a Microsoft PSTN Service (PSTN Conferencing or PSTN Calling), the Partner will likely be responsible for calculating and remitting PSTN taxes and fees. Partners should contact their tax and legal counsel to understand their specific situation with regard to PSTN services’ regulation, taxes and fees, and their potential liabilities. More information on Office 365 Enterprise E5 Suite with PSTN services can be found on Drumbeat.Drumbeat 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. Frequently Asked Billing Questions - Tax

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