Proration Rule Overview

Proration Methods

Ordway supports two methods of partial period prorate that can be enabled by navigating to Setup > General Settings > Subscription Settings > Prorate Partial Period Charges.

Once enabled, you can select between two separate prorations methods:

• Prorate by month first
• Prorate with exact days

This is a global setting and is used in all recurring charges that have Partial Period Proration selected for the Proration Rules with its Billing Information.

Prorate by month first - Calculate the number of full months in the billing period and then calculate partial month proration by taking the number of active days in the partial month divided by the total number of days in the same month.

Prorate with exact days - Calculate the number of active days in the billing period and divide by the total number of days in the billing period.

Proration Rules

For recurring charges, Ordway supports three different proration rules that can be used for billing. The prorated amount to be billed to a customer is reflected in the Unit Price of a prorated billing schedule line. The description of a line will also include an additional tag of [partial period] to indicate that a billing schedule line has been prorated.

• Partial Period Proration - Prorated amount will be billed to the customer for the first partial month/period of the billing period selected for the charge. Mid-contract changes will also include proration. These changes include mid-period changes such as additional units or a change in price. Mid-contract cancellations will also result in proration and a negative billing schedule line will be generated to account for the amount the customer can be credited.
• Current Full Period - Full amount will be charged in the first billing period based on the charge ready date. No prorated amount will be billed or credited to the customer upon cancellation.
• Next Full Period - Full amount will be charged in the next full billing period from the first charge ready date. No prorated amount will be billed or credited to the customer upon cancellation.

Examples: 

See the attached file at the end of this article. You can save it and review the calculations. 

Prorate by Months

Prorate by Days