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    Prorating Products
    • 28 Apr 2023
    • 2 Minutes to read
    Contents

    Prorating Products

    • Updated on 28 Apr 2023
    • 2 Minutes to read
    Article Summary

    You can prorate products you sell alongside plans and {{variable.contracts} to charge customers for their usage of the product on their first billing cycle rather than the full price.

    For example, a customer starts a contract on the 15th but is billed on the 1st of every month. The contract is prorated to charge them from the 15th to 1st of the following month, instead of the first month in full.

    If you add a parking spot product worth $100 to their contract without proration enabled for the product, the customer will be charged $100, even if they only use that parking spot for two weeks instead of the whole month.

    With product proration enabled for that product, they'll be charged half of the product price since they're only using that product from the 15th until the end of the month.

    You can prorate a product whenever it is sold through a plan or contract by default or prorate it only when necessary via plan, contract or proposal settings.

    You cannot prorate products outside of a prorated plan, a prorated contract, or a proposal that includes a prorated plan.

    Proration relies on the invoice period of plans and contracts to determine how much you should charge customers.

    Products proration also applies to contracts that haven't been invoiced.

    If you add a product to a customer's contract set to start and be invoiced in 5 days and you then enable proration for that product after creating the contract — the product will automatically be prorated by the time the customer is invoiced.

    Plans must also be prorated to allow product proration.

    If the plans you use to create contracts and proposals don't have proration enabled, you won't be able to prorate products you include with them.

    Prorate Products by default

    You can prorate any of your products by default. If a product is included in any plan as a component, contract as a product invoiced alongside the contract.

    ProductProrationToggle

    1. Log in to the Admin Panel if you aren't already.

    2. Click Inventory > Product.

    3. Click on the relevant product.

    4. Enable the Always adjust the price of this product if invoiced alongside a prorated contract toggle.

    5. Click the Save Changes button.

    Repeat the process for every other product that you want to prorate when included in plans, contracts, or proposals.

    Now that you've prorated your products, you can include them in plans, contracts, and proposals. The product will always be prorated if the plan or contract is also prorated. After the customer's first prorated billing cycle, the customer is charged full price for that product every billing cycle or until their contract is canceled.

    Prorate Products as a one-off

    You can also choose to prorate products only when needed within any prorated contract. This is an option if you only want to prorate products in specific instances rather than by default. You can prorate products via contract whether they are part of a proposal or not.

    From a contract

    1. Log in to the Admin Panel if you aren't already.

    2. Click Finance> Contracts.

    3. Click on the relevant contract.

    4. Click on the Plans tab.

    5. Click on the plan that should include a prorated product.

    6. Enable the Always adjust the price of this product if invoiced alongside a prorated contract toggle.

    7. Click the Save Changes button.

    Repeat the process for every other product that you want to prorate when included in plans, contracts, or proposals.

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