Microsoft annual SKU billing plan

An annual SKU is a billing plan for existing Microsoft SKUs. It allows a Microsoft reseller to align how they charge a customer with Microsoft reconciliation when selling an annual plan. The majority of Microsoft products are available for monthly or annual plans.

When a reseller purchases an annual SKU, they are charged immediately. There is no "grace period" leading to the next billing date like there is with monthly plans. Microsoft does not charge for early cancellations of an annual SKU.

Through the AppDirect Developer Center, you can choose to charge customers either monthly or yearly.

Example

Now: Acme is a Microsoft reseller and an AppDirect customer. Acme has a tiered pricing plan option for the Microsoft Office 365 Business monthly SKU: they charge $8.00 per month and $86.40 per year for this SKU. When Customer A purchases 5 seats on a yearly plan from Acme, they must pay $432.00 ($86.40 X 5) immediately.

On the next invoice, Acme must pay for 5 seats at the monthly list price by Microsoft for this sale ($8.00 X 5 = $40.00). If Customer A does not change their order, Acme pays the same monthly list price for the rest of the year, ($8.00 X 5 X 12 = $480.00).

In the future: Acme is a Microsoft reseller and an AppDirect customer. Acme has a tiered pricing plan option for the Microsoft Annual SKU Office 365 Enterprise E1: they charge $10.00 per month and $108.00 per year for this SKU. When Customer B purchases 5 seats on a yearly plan from Acme, they must pay $540.00 ($108.00 X 5) immediately.

On the next invoice Acme is charged for 5 seats at the annual list price by Microsoft for this sale.

Limitations

The following limitations apply to Microsoft SKUs that have annual billing plans:

• Add-on products must have the same charge frequency as the parent product subscription. This is not validated by the marketplace.
• When purchasing a new subscription or upgrading an existing subscription, you can convert between annual and monthly. The only exception is with limited SKUs such as Business Essential and Business Premium.
• We do not convert existing billing plans. If a customer is currently being billed annually by the marketplace, their Microsoft subscription remains a monthly billing term.