Pro Rata billing

Problem Description

Imagine you have a monthly subscription that you want billed at the first of each month. If a new customer wants to start his subscription on the 15th, billing him for the entire month is problematic as the customer only receives services from you for half of it. A similar problem occurs if a contract ends in the middle of the month.

This is where Nitrobox Pro Rata Billing comes into play. We will calculate your customer's exact amount due relative to the service they receive.

📘

Only for Recurring Options

Pro Rata calculation is only done for Recurring Options. One Time Options, Usages and Line Items are not affected.

How does it work

We will calculate the exact amount of days the customer receives services for in their first and last billing period and use it to calculate the actual price that will be billed for those periods:

[Price / (total days in billing period) * (active days in billing period)]

Example

You offer a 9,99EUR monthly subscription that should be billed at the beginning of each month. A new customer signs a contract that starts on January 15th. They will be invoiced 5,48EUR for their first month.

9,99EUR / 31 (days in Jan) * 17 (active days in Jan)