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Proration and Plan Changes

Overview

This article explains the affects of proration when a customer changes plans in the midst of a billing cycle.

Note: The tables in this article provide general examples of proration periods and resulting charges or credits. Actual proration periods and resulting charges or credits will vary depending on the plan type, billing intervals, and whether you are adding, canceling, or switching plans.

Changing to a More Expensive Plan

This example describes the different proration types and resulting charges or credits that would exist if a customer who is billed on the 15th of every month were switched from monthly Plan A to monthly Plan B on 4/27/15.

  • Plan A's monthly recurring charges are $30.
  • Plan B's monthly recurring charges are $60.

You can select the type of proration that suits your business needs.

Proration Type Plan A: Credit Amount Unused service:
​4/27 through 5/14		 Plan B: Charge Amount New service:
 4/27 through 5/15		 Prorated Total
As of 4/27		 Charge for Plan B
5/15 Invoice		 Charge for Plan B
on 6/15 Invoice and All Future Invoices for the Subscription

None

None

None

$0 balance

$60

$60

Full proration

$18

($1 daily cost x 18 days of unused service)

$36

($2 daily cost x 18 days of new service)

$18 charge

($36 charge - $18 credit)

$60

$60

Charge only proration

None

$36

($2 daily cost x 18 days of new service)

$36 charge

$60

$60

Credit only proration

$18

($1 daily cost x 18 days of unused service)

None

$18 credit

(Applied to 5/15/15 invoice.)

$42

($60 charge - $18 credit)

$60

 

Changing to a Less Expensive Plan

This example describes the different proration types and resulting charges or credits that would exist if a customer who is billed on the 15th of every month were switched from monthly Plan B to monthly Plan A on 4/27/15.

  • Plan A's monthly recurring charges are $30.
  • Plan B's monthly recurring charges are $60.

You can select the type of proration that suits your business needs.

Proration Type Plan A:
Credit Amount
Unused service:
​4/27 through 5/14		 Plan B:
Charge Amount
New service:
4/27 through 5/15		 Prorated
Total
As of
4/27		 Charge
for Plan A
5/15 Invoice		 Charge
for Plan A
6/15 Invoice		 Charge for Plan A
on 7/15 Invoice and All Future Invoices for the Subscription

None

None

None

$0 balance

$30

$30

$30

Full proration

$36

($2 daily cost x 18 days of unused service)

$18

($1 daily cost x 18 days of new service)

$18 credit

($18 charge - $36 credit applied to 5/15/15 invoice.)

$12

($30 charge - $18 credit)

$30

$30

Charge only proration

None

$18

($1 daily cost x 18 days of new service)

$18 charge

$30

$30

$30

Credit only proration

$36

($2 daily cost x 18 days of unused service)

None

$36 credit (Applied to 5/15/15 invoice.)

$0

($30 charge - $30 credit = $6 credit balance applied to 6/15/15 invoice.)

$24

($30 charge - $6 credit)

$30

 
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