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Proration Types

Found on the Subscription Item, the Proration Type field allows you to define how Charges should be calculated for partial periods when the Per Term field is not in use. In general, Proration is typically not used with Consumption-based Usage.

proration_proration_type.png

Note: If a Per Term value is populated, the Proration Type automatically sets to ‘Do Not Prorate’.

 

Prorate Rate by Days

Prorate Rate by Days adjusts the Rate on the Charge based on the number of active days in the Charge Period.

Example:

  • A Subscription Item has a Start Date of 1/15/2020 and End Date of 12/31/2020.
  • The Charge Schedule is set to Monthly (Calendar Month) and the Rate is $50.
  • The Proration Type is set to Prorate Rate by Days.
    • The system will calculate the daily rate of $50 divided by the total number of days in the Charge Period (31 days for month 1) and multiply that by the number of active days in the Charge Period (17 days) to calculate the Term Rate.

proration_proration_type_prorate_rate_by_days.png

 

 

Prorate Quantity by Days

Prorate Quantity by Days adjusts the Quantity on the Charge based on the number of active days in the Charge Period.

Example:

  • A Subscription Item has a Start Date of 1/15/2020 and End Date of 12/31/2020.
  • The Charge Schedule is set to Monthly (Calendar Month) and the Rate is $50.
  • The Proration Type is set to Prorate Quantity by Days.
    • The system will calculate the number of active days in the Charge Period (17 days in month 1) divided by the total number of days in that Charge Period (31 for that month) times the actual Quantity.
    • The resulting number (0.5484 in this case) is used as the Quantity on the Charge. The Quantity * Rate * Term Multiplier is used to calculate Amount.

proration_proration_type_prorate_qty_by_days.png

 

 

Do Not Prorate (Per Term is Blank)

Do Not Prorate means that no adjustments will be made to Rate or Quantity if a Charge Period starts late or ends early. In this case, a flat Rate is charged even if service was only provided for part of a period.

Example:

  • A Subscription Item has a Start Date of 1/15/2020 and End Date of 12/31/2020.
  • The Charge Schedule is set to Monthly (Calendar Month) and the Rate is $50.
  • The Proration Type is set to Do Not Prorate.
    • Each Charge Period will have the same Amount, including for the first partial month.

proration_proration_type_do_not_prorate_term_blank.png

 

 

Do Not Prorate (Per Term is NOT Blank)

Using Do Not Prorate AND Per Term means the Term Multiplier will be adjusted based on the number of active days in the Charge Period.

Example:

  • A Subscription Item has a Start Date of 1/15/2020 and End Date of 12/31/2020.
  • The Charge Schedule is set to Monthly (Calendar Month) and the Rate is $50.
  • The Proration Type is set to Do Not Prorate.
    • The Term Multiplier for the partial period will be calculated as the number of active days in the Charge Period (17 days for month 1) divided by the total number of days in the Charge Period (31 days).
    • The Rate is calculated as Term Multiplier (0.5483871) * Term Rate (50).
    • The Amount is then calculated as Quantity * Term Multiplier (0.5483871) * Rate (27.419355).

proration_proration_type_do_not_prorate_term_not_blank.png

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