Pro rata charges

Pro rata start date

A typical usage of charges with pro rata start dates is during the on-boarding process of a new customer, where you are looking to get the first month's fees charged, as well as synchronising their charges to your monthly billing cycle. In typical cases, any charges created mid-month would start from the beginning of the following month, but in a pro rata charge you would also want to include the additional extra days from the current month so any recurring fees can include additional billing time.

There are two possible scenarios which are covered by the pro rata start date:

Charging at the beginning of the next billing cycle

In this example, a customer started their service on the 15th of May, but you don't want to invoice them until the 1st of June as part of your normal monthly billing cycle. You create a Recurring Monthly charge, and set the charge to start on the 1st of June. You set your "Pro rata start date" to the 15th May.

When you bill the June billing period, Billingbooth will create two line items in the invoice: The first line item will cover the pro rata period of 15th May to 31st May, and the second line item will cover the whole month of June. The reduced period for the first pro rata line item will also be re-calculated, so if the full monthly sell price of the charge is £20.00 then in this example the pro rata line item will come to a total of £10.97 (17 days of May).

Charging for part of the current billing cycle

In this scenario, a customer is due to start service later in the current billing period and you are looking to include those charges in your monthly billing cycle which is earlier than their starting date. In this instance, you create a new Recurring Monthly charge, and set it to start on the 1st May, but set the "Pro rata start date" field to the 15th May.

When you bill the May billing period, Billingbooth will create a single line item in the invoice with a reduced charge period. Instead of the full May billing period, the line item will charge 15th May to the 31st May. The charge amount will also be reduced to the pro rata period, so if the full monthly sell price of the charge is £20.00 then in this example the line item will come to a total of £10.97 (17 days of May).

Termination date

A typical usage of charges with termination dates is when a recurring charge needs to end before it's allocated frequency period where perhaps the customer has terminated service earlier than expected.

An example of this would be a customer that started service on the 1st of May, then at the end of May they decide they're not going to need the service later than the middle of June. You can set the Termination Date field to the 15th June.

Invoicing the May billing period will create an invoice with the regular full monthly charge, but when June gets invoiced Billingbooth will create a line item with a reduced charge period. Instead of the full June billing period, the line item will charge 1st June to the 15th June. The charge amount will also be reduced to the pro rata period, so if the full monthly sell price of the charge is £20.00 then in this example the line item will come to a total of £10.00 (15 days).