Subscription Pro Rating & Billing

Learn more about what to expect when configuring your subscription billing.

 

When purchasing a subscription, clients expect to pay the same amount each month they are subscribed. While this is true, subscription pricing can be influenced by several factors such as promotions, fees, the effective date, the expiration date, the Billing Day and pro rating.

This article will explain what to expect when subscriptions are prorated at checkout in addition to canceling a prorated subscription with an expiration date (if applicable). You will also find billing scenarios for subscriptions where pro rata is not applied.

 

 

How it Works

1. Billing Terminology

2. Pro Rata Billing at Checkout

3. Billing at Checkout without Pro Rata

4. Pro Rata on Expiration Date

 

1. Billing Terminology

Familiarize yourself with subscription billing jargon to ensure an ideal configuration.

  • Effective date: The day the subscription is active and can be used to register to activities. Clients can purchase a subscription before it becomes effective.
  • Purchase date: The day the client buys the subscription. By default, recurring billing takes place on the same day of the month it was purchased, unless a Billing Day is specified or it was purchased before its effective date.
  • Billing Day: All clients with the active subscription are billed recurrently on the same day of the month, regardless of when it was purchased. If toggled, a client can purchase a subscription at checkout and be billed again in the same month on the Billing day. NOTE: If a subscription is purchased after the Billing Day, the client is charged for two subscription periods at checkout.
  • Pro Rata: Rather than charging a subscription in full, the price can be prorated to reflect the number of activity occurrences (or days) that remain in the billing cycle.
  • Billing Cycle: The monthly billing cycle based on a subscription's purchase date, effective date or Billing Day. Each subscription charge covers one billing cycle.
  • Occurrences: If a subscription is used to register to an activity, occurrences represent the number of times the activity occurs within the month (e.g. an activity that takes place twice a week has 8 occurrences during the month). If a subscription is purchased without registering to activities (e.g. gym membership), occurrences represent the number of days left within the month at the time of purchase.

 

2. Pro Rata Billing at Checkout

You may wish to prorate subscription prices at checkout depending on the occurrences that are left in the billing cycle when clients make their purchase. Occurrences can represent the number of activity occurrences or it can represent the number of days remaining in the month.

Prorating_EN.png

 

Below are scenarios of how subscriptions are prorated upon purchase:

  

Purchasing Before the Effective Date / Before the Billing Day

Scenario: Buying a prorated subscription before its effective date and before the Billing Day.

Billing Day: The 25th

Effective date: May 15th

Purchase date: May 10th

  • May 10th (at checkout), client pays a prorated amount to cover the remaining occurrences (or days) left in May (15th-31st).
  • May 25th, client is invoiced the full subscription to cover for June 1rst-30th.
  • June 25th, client is invoiced the full subscription to cover for July 1st-31st.

Purchasing_a_sub_before_its_effective_day_or_billing_day_with_PRO_RATA_EN.png

 

Purchasing Before the Effective Date / After the Billing Day

Scenario: Buying a prorated subscription before its effective date but after the Billing Day.

Billing Day: The 5th

Effective date: May 15th

Purchase date: May 10th

  • May 10th (at checkout), client pays a prorated amount to cover the remaining occurrences left in May (15th-31st).
  • In addition, they pay the full subscription to cover for June 1st-30th. They pay for two subscription periods. One is charged partially and the other is charged in full.
  • June 5th, client in invoiced the full subscription to cover for July 1st-31st.
  • July 5th, client is invoiced the full subscription to cover for August 1rst-31st.

 

Purchasing After the Effective Date / Before the Billing Day

Scenario: Buying a prorated subscription after its effective date but before the Billing Day.

Billing Day: The 25th

Effective date: May 5th

Purchase date: May 10th

  • May 10th (at checkout), client pays a prorated amount to cover the remaining occurrences left in May (10th-31st).
  • May 25th, client is invoiced the full subscription to cover for June 1st-30th.
  • June 25th, client is invoiced the full subscription to cover for July 1st-31st.

 

Purchasing After the Effective Date / After the Billing Day

Scenario: Buying a prorated subscription after its effective date and after the Billing Day.

Billing Day: The 25th

Effective date: May 5th

Purchase date: May 27th

  • May 27th (at checkout), client pays a prorated amount to cover the remaining occurrences left in May (27th-31st).
  • In addition, they pay the full subscription to cover for June 1st-30th. They pay for two subscription periods. One is charged partially and the other is charged in full.
  • June 25th, client is invoiced the full subscription to cover for July 1st-31st.
  • July 25th, client is invoiced the full subscription to cover for August 1st-31st.

Purchasing_a_sub_after_billing_day_WITH_PRORATE_EN_2.png

 

Purchasing Before the Billing Day (no Effective Date)

Scenario: A client buys a prorated subscription before the Billing Day with no effective date.

Billing Day: The 25th

Effective date: Unset

Purchase date: May 10th

  • May 10th (at checkout), client pays a prorated amount to cover the remaining occurrences left in May (10th-31st).
  • May 25th, client is invoiced the full subscription to cover for June 1st-30th.
  • June 25th, client is invoiced the full subscription to cover for July 1st-31st.

 

Purchasing After the Billing Day (no Effective Date)

Scenario: A client buys a prorated subscription after the Billing Day with no effective date.

Billing Day: The 25th

Effective Date: Unset

Purchase Date: May 27th

  • May 10th (at checkout), client pays a prorated amount to cover the remaining occurrences left in May ( 27th-31st).
  • In addition, they pay the full subscription to cover for June 1st-30th. They pay for two subscription periods. One is charged partially and the other is charged in full.
  • On June 25th, client is invoiced the full subscription to cover for July 1rst-31st.

 

When the Billing Day and Effective Date are the same

Scenario: A client buys a prorated subscription with the same Billing Day and effective date.

Billing Day: The 10th

Effective date: May 10th

Purchase date: May 15th

  • May 10th (at checkout), client pays a prorated amount to cover the remaining occurrences left in May (15th-31st).
  • In addition, they pay the full subscription to cover for June 1st-30th. They pay for two subscription periods. One is charged partially and the other is charged in full.
  • On June 10th, client is invoiced the full subscription to cover for July 1st-31st.

 

 

3. Billing at Checkout without Pro Rata

Organizations are not required to prorate subscriptions. If no Billing Day or expiration date are specified, pro rata is not necessary and a subscription's effective date has no bearing on the price at checkout.  The client pays the full subscription price.

However, specifying a Billing Day can affect the amount charged at checkout.  

Below are scenarios of subscriptions (without pro rata) at checkout when:

 

Purchasing with No Billing Day specified

Scenario:  A client buys a subscription with no effective date or Billing Day set.

Billing Day: Unset.

Purchase date: May 10th (This becomes the monthly billing date and the effective date)

  • May 10th (at checkout), client pays the full subscription to cover for May 10th-June 9th.
  • June 10th, client is invoiced the full subscription to cover for June 10th-July 9th.
  • July 10th, client is invoiced the full subscription to cover for July 10th-August 9th.

 

Purchasing Before the Billing Day

Scenario: A client buys a subscription before the Billing Day.

Billing Day: The 25th

Purchase date: May 14th

  • May 14th (at checkout), client pays the full subscription to cover for May 14th-31st.
  • May 25th, client is invoiced the full subscription to cover for June 1st-30th.
  • June 25th, client is invoiced the full subscription to cover for July 1st-31st.

Purchasing_sub_before_billing_day_NO_PRORATE_EN.png

 

Purchasing After the Billing Day

Scenario: A client purchases a subscription after the Billing Day.

Billing Day: The 25th

Purchase date: May 27th

  • May 27th (at checkout), client pays the full subscription to cover for May 25th-31st.
  • In addition, they pay the full subscription to cover for June 1st-30th. They pay for two subscription periods. One is charged partially and the other is charged in full.
  • On June 25th, client is invoiced the full subscription to cover for July 1rst-31rst.

Purchasing_a_sub_after_billing_day_NO_PRORATE_EN.png

 

 

4. Pro Rata on Expiration Date

A subscription can be prorated on the final billing month when an expiry date is configured and pro rata is enabled. Subscriptions are terminated one day before the next billing cycle. Clients can benefit from their subscription and associated services up until expiry. When expired, the subscription is no longer active and clients are removed from associated subscription-based activities.

  • When a subscription has a Billing Day, the billing cycle runs from the 1st to the end of the next month (e.g. June 1st-30th)
  • When the purchase date is the billing day, the billing cycle runs from the day of the month it was purchased up until the same day of the following month (e.g. June 14th-July 13th).

set_the_expiry_EN.png

  

Prorated Subscription cancellation with Billing Day

Scenario:  Cancellation of a prorated subscription with a Billing Day and expiration date.

Billing Day: The 25th

Expiration date: May 27th

  • March 25th, client is invoiced the full subscription to cover for April 1st-30th.
  • April 25th, client is invoiced a prorated amount to cover for May 1st-27th.
  • May 27th, the subscription is expired.

 

Prorated Subscription cancellation with no Billing Day

Scenario: Cancellation of a prorated subscription with expiration date but no Billing Day.

Billing Day: Unset

Purchase date: March 14th (This becomes the billing date by default)

Expiration date: May 27th

  • March 14th, client is invoiced the full subscription to cover for March 14th-April 13th.
  • April 14th, client is invoiced the full subscription to cover for April 14th- May 13th.
  • May 14th, client is invoiced a prorated amount to cover between May 14th-May 27th.
  • May 27th, the subscription is expired.

 

 

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