Proration & Credits
Three settings decide what a customer is credited or charged when a subscription changes before its term ends. Each one answers a different question:
| Setting | Question it answers | Where it applies | Where to set it |
|---|---|---|---|
| Plan changes (Prorate now / Start a new term) | Is a mid-term plan change split at the change date? | Plan and frequency changes only | Subscription Settings |
| Unused Period Credit Policy | Does a cancellation credit the unused part of the term, and how much: nothing, a prorated share, or the full term? | Cancellations only | Cancel Subscription settings, or overridden on each cancellation |
| Proration Method | When a term is split, how are the unused days counted? | Every prorated credit and charge | Subscription Settings |
The first two decide whether a term is split. Proration Method is the calculator they both use once it is.
Which settings apply to each event
| Event | Plan changes | Unused Period Credit Policy | Proration Method |
|---|---|---|---|
| Plan change, Immediately or Specific Date | ✓ | – | ✓ when prorated |
| Frequency change (for example monthly → annual) | ✓ | – | ✓ when prorated |
| Plan or frequency change, End of Term | – | – | – |
| Cancellation, Immediately or Specific Date | – | ✓ | ✓ for Issue prorated credits |
| Cancellation, End of Term | – | – | – |
| Early termination fee on a contract | – | – | ✓ |
| Adding an add-on, Plan Based Billing | – | – | ✓ (a share of 0 charges the full term) |
| Adding an add-on, Multi Frequency Billing | – | – | – |
| Pause, resume, renewal, expiry | – | – | – |
End of Term changes and cancellations never prorate: they take effect at the renewal, when no days of the term are left unused.
Adding an add-on mid-term with Plan Based Billing: the add-on runs to the end of the current term and is charged only for the part of the term left, counted with Proration Method. For example, a ₹500/month add-on added to a yearly plan with 45 of 365 days left is charged ₹6,000 × 45/365 = ₹739.73. If the method leaves nothing to prorate while days remain (Whole months with no complete month left), the full term is charged instead of nothing. With Multi Frequency Billing the add-on starts its own billing cycle at full price. See How an addon added mid-term is priced.
Edge cases to know
| Situation | What happens | How to avoid it |
|---|---|---|
| Proration Method Whole months on monthly plans | A term never has a complete month left after day 1, so mid-term changes and prorated cancellations credit nothing. With Prorate now, plan changes cost nothing until the renewal. | Use Whole months only if your plans are yearly or longer |
| Plan changes Start a new term + a mid-term downgrade | The customer pays the cheaper plan in full and loses the unused part of the more expensive plan | Schedule downgrades for End of Term |
| Proration Method 30/360 in February | Each February day is worth more than its share of the real calendar: 16 of 30 instead of 14 of 28 days | Expected with 30/360; use Actual days to bill by the calendar |
| Issue full credits on a cancellation late in the term | The whole term is credited even with one day left | Use Issue prorated credits as the default and full credits only case by case |
| Add-on added mid-term under Plan Based Billing with Whole months on a monthly plan | Charged the add-on’s full price for the term, however few days are left | Use Actual days or 30/360 |
Proration Method in one line each
| Method | Unused share of the term |
|---|---|
| Actual days (default) | Calendar days left, counting the change day, ÷ days in the term |
| 30/360 | The same, but every month counts as 30 days and every year as 360 |
| Whole months | Only complete months left count; a part-month counts as nothing |
All the examples below use Actual days unless they say otherwise. For a side-by-side comparison of the four methods, see Proration Method.
Plan changes
Setup for every example: a customer is on a ₹1,000/month plan. The term runs 1 Jun – 30 Jun (30 days). The change takes effect Immediately on 16 Jun, which leaves 15 of 30 days unused.
Same billing period (₹1,000/month → ₹3,000/month)
| Plan changes | Proration Method | Credit for the old plan | Charge for the new plan | Customer pays | Term |
|---|---|---|---|---|---|
| Prorate now | Actual days | ₹1,000 × 15/30 = ₹500 | ₹3,000 × 15/30 = ₹1,500 | ₹1,000 | Unchanged: 1 – 30 Jun |
| Start a new term | any | none | ₹3,000 in full | ₹3,000 | A new term starts: 16 Jun – 15 Jul |
| Prorate now | Whole months | ₹0 (no complete month left) | ₹3,000 in full for the rest of the term | ₹3,000 | Unchanged: 1 – 30 Jun |
A monthly term never has a complete month left after day 1, so with Whole months a mid-term change between monthly plans credits nothing for the old plan and charges the new plan in full for the rest of the term. A change never comes at no extra charge: when the method leaves nothing to prorate while days remain, the full price applies.
A downgrade works the same way with the prices swapped. Going from ₹3,000 to ₹1,000 on 16 Jun with Prorate now credits ₹1,500 and charges ₹500, a net credit of ₹1,000. With Start a new term they pay ₹1,000 for a new term and the unused ₹1,500 is not credited. To avoid that, schedule downgrades for End of Term.
Different billing period (₹1,000/month → ₹10,000/year)
A change to a different billing period always starts a new term on the change date: here, 16 Jun to 15 Jun next year.
| Plan changes | Proration Method | Credit for the old plan | Charge for the new plan | Customer pays |
|---|---|---|---|---|
| Prorate now | Actual days | ₹500 | ₹10,000 in full | ₹9,500 |
| Start a new term | any | none | ₹10,000 in full | ₹10,000 |
Add-ons during a plan change
Add-ons billed with the plan follow the plan. With Plan changes Prorate now, their unused part is credited using the same Proration Method. With Off, nothing is credited for them either. See Plan & Frequency Changes.
Cancellations
Setup for every example: a ₹3,000/month subscription, term 1 Jun – 30 Jun, cancelled Immediately on 16 Jun (15 of 30 days unused). The Plan changes setting has no effect on cancellations.
| Unused Period Credit Policy | Proration Method | Credit |
|---|---|---|
| Don’t issue credits | any | ₹0 |
| Issue prorated credits | Actual days | ₹3,000 × 15/30 = ₹1,500 |
| Issue prorated credits | Whole months | ₹0 (no complete month left) |
| Issue full credits | any | ₹3,000, the whole term, for any cancellation before the term ends |
A cancellation at End of Term earns no credit under any policy.
The policy in Cancel Subscription settings is only the default. An admin can choose a different policy on each cancellation, for example Issue full credits for a customer leaving after a service problem. Proration Method can’t be changed for a single cancellation: it is one rule for the whole tenant.
For how the credit is posted and refunded, see Cancellation.
Choosing your settings
| You want to… | Plan changes | Proration Method | Unused Period Credit Policy |
|---|---|---|---|
| Bill fairly by the day everywhere (recommended) | Prorate now | Actual days | Issue prorated credits |
| Prorate upgrades but never refund on cancellation | Prorate now | Actual days | Don’t issue credits |
| Restart the term on every upgrade, with prorated refunds on cancellation | Start a new term | Actual days | Issue prorated credits |
| Give every month the same value, for finance or accounting reasons | Prorate now | 30/360 | Issue prorated credits |
| On annual plans, credit only complete unused months | Prorate now | Whole months | Issue prorated credits |
Avoid Whole months on monthly plans unless you intend mid-term changes and add-ons to be charged in full and cancellations to credit nothing.
To stop refunds on cancellation, set Unused Period Credit Policy to Don’t issue credits. There is no “No proration” method: a value saved that way before counts as Actual days.