How proration is calculated
Take a plan at EUR 30 a month, upgraded to a EUR 60 plan on day 10 of a 30-day cycle, with 20 days left. The customer is credited 20/30 of EUR 30, which is EUR 20, for the unused part of the old plan, and charged 20/30 of EUR 60, which is EUR 40, for the new one.
The difference, EUR 20, is due now or added to the next invoice. From the next cycle the customer pays EUR 60.
The choices a billing system makes
- The unit of time: by the day or by the second
- When to bill the difference: at once or on the next invoice
- Downgrades: a credit, a refund, or a change at the end of the period
- Quantity changes, such as seats added partway through
- Rounding, and tax on each prorated line
Why proration matters
Proration keeps billing fair when customers change plans freely, which is what self-service products invite. Without proration, an upgrade either waits for the next cycle or charges for time already paid.
The cost is complexity. Each adjustment is its own invoice line and ledger entry, credits have to be carried forward and used, and an amount the customer did not expect is a common cause of support contacts and disputes.
Where Proration shows up in a platform
Modules that do the work
- LedgerThe double-entry book of record behind every balance, fee and transfer.
- CheckoutA hosted checkout for cards, wallets, bank payments and crypto, routed to the best provider.
- BackofficeOne console to run the platform: customers, money, risk, content and staff permissions.