Streamlining contract billing with Dynamics Finance: Three real-world scenarios.

As business models grow more complex, especially in service and subscription-based industries, managing contract billing efficiently has become a critical challenge. Manual processes, rigid systems, and disconnected tools often lead to billing errors, customer frustration, and revenue leakage. 

Microsoft Dynamics 365 Finance offers a Subscription Billing module designed to bring automation and flexibility to contract billing. Whether you’re billing annually, based on usage, or against milestones, the module enables finance teams to handle complexity without customization. 

In this post, we’ll explore three real-world billing scenarios that demonstrate the power of Dynamics Finance Subscription Billing in streamlining processes and improving cash flow visibility. 

The need for flexible contract billing. 

Traditional billing systems often assume one-size-fits-all logic: invoice monthly, recognize revenue as billed, and repeat. But today’s businesses operate on diverse revenue models—from fixed annual subscriptions to metered usage to project-based services with milestone billing. 

Without flexibility, finance teams are forced to rely on spreadsheets or manual workarounds to handle exceptions—adding risk and complexity. In contrast, Dynamics Finance’s Subscription Billing module supports varied billing frequencies, pricing strategies, and recognition schedules—all in one place. 

By automating these processes, organizations reduce billing cycles, improve accuracy, and deliver a better customer experience. The result? More predictable revenue, fewer billing disputes, and less time spent chasing down manual adjustments. 

Scenario 1: Annual subscription with deferred revenue. 

Consider a customer who signs a three-year annual data storage subscription. Each year, they’re billed $1,200 upfront. Instead of recognizing all revenue immediately, the Subscription Billing module defers it—spreading recognition evenly over 12 months. 

With built-in deferral schedules, finance teams can easily track what’s been billed, what’s deferred, and what’s been recognized—all without spreadsheets. As each month passes, the system automatically recognizes $100 in revenue, maintaining compliance and providing accurate financial reporting. 

Key benefits: 

• Automates revenue deferral and recognition. 
• Increases transparency in financial reporting. 
• Reduces manual workload and risk of error. 

Scenario 2: Usage-based billing with tiered pricing. 

Let’s say that same customer pays based on how much data they use—up to a capped amount. For example: 

• First 100 GB: $3/GB.
• Next 200 GB: $2/GB.
• 300+ GB: $1/GB.
• Monthly max: $1,000.

With usage-based billing, the Subscription Billing module calculates charges dynamically based on entered consumption data. It applies the correct tiered pricing, enforces the maximum cap, and produces a clean, accurate invoice. 

Even if a customer uses 850 GB in a month, the system ensures they’re not billed more than $1,000—preventing overcharges and disputes. 

Key benefits: 

• Supports dynamic, scalable billing models. 
• Ensures billing accuracy with automated pricing rules. 
• Enhances customer trust through transparent invoices. 

Scenario 3: Milestone-based billing. 

For service-based businesses, billing often hinges on project milestones rather than fixed dates. In our example, a $10,000 implementation fee is broken down into: 

• 40% upon contract signing. 
• 20% after the design phase. 
• 40% upon project completion. 

The module allows teams to set up milestone templates and allocate billing percentages accordingly. When a milestone is completed, the invoice is triggered—no need to retroactively adjust or manually create separate billings. 

Key benefits: 

• Aligns billing with project progress. 
• Reduces manual intervention for milestone tracking. 
• Improves cash flow with timely invoicing. 

Watch it in action: Contract billing in Dynamics Finance.

See how contract billing works in practice. This short demo highlights how Advanced Subscription Management manages a range of billing scenarios—from annual subscriptions with deferred revenue to usage-based pricing with tiered rates and milestone-based billing.

Streamline your operations with automated contract billing. 

From annual subscriptions to usage-based pricing and milestone billing, Dynamics 365 Finance Subscription Billing supports a wide range of contract types with built-in automation. 

By reducing manual work and aligning invoicing with actual service delivery, finance teams gain greater control, accuracy, and visibility. And for businesses that outgrow the core module’s capabilities, Binary Stream’s Advanced Subscription Management (ASM) extends functionality with even more flexibility—like self-serve portals and custom field tracking. 

If you’re managing complex contracts and want to simplify your billing process, now’s the time to explore subscription billing solutions that scale with your business. 

The CFO’s guide to scaling subscription billing in Dynamics 365 Finance.

In this exclusive guide, you’ll discover:

• The hidden costs of not extending Dynamics 365 Finance’s subscription billing capabilities.
• How to choose the right add-on solution to eliminate inefficiencies.
• The ROI of a dedicated subscription management solution, real-world success stories included.

Don’t let outdated processes hold your finance team back. Download the guide today and take control of your subscription-based operations.