Changelog

Proration

What is Proration?

Proration is the proportional adjustment of billing charges when a swap or plan change occurs mid-cycle. It ensures customers only pay for the actual time each asset was used.

Key Concepts & Terms

Term

Definition

Unused Period

The part of the billing cycle not used under the original asset.

Adjustment Credit Note (Adj CN)

A credit applied directly to an existing invoice to reduce its unpaid balance.

Refundable Credit Note (Ref CN)

A standalone credit issued when the invoice is already paid; can be refunded or applied later. If linked to a payment, it can be refunded or applied to another outstanding invoice. If not linked to a payment, it can only be applied to another outstanding invoice.

Pro-rata Invoice

A new invoice covering the remainder of the current cycle under the new asset's rate.

Full Invoice

The regular billing invoice for the upcoming complete cycle.

Calculation Formula

Pro-rata Amount = (Days in Unused Period ÷ Total Days in Cycle) × Booking ongoing fees

Billing Scenarios & Adjustment Logic

For all billing frequencies—and regardless of payment method—the process unfolds in a consistent structure:

  1. Calculate unused period on the existing asset and issue an Adjustment Credit Note.

  2. Issue a pro‑rata invoice for the remaining period on the new asset.

  3. Generate the full invoice for the next billing cycle.

  4. Handle credits differently based on whether the current invoice is unpaid, paid electronically, or paid via credits.

Special Handling Examples:

  • Scenario: Last Invoice Unpaid

    • Create and apply Adjustment Credit Note (Adj CN) to reduce the outstanding balance.

    • Issue the pro-rata invoice for the new asset and the full invoice for the next billing cycle.

  • Scenario: Last Invoice Paid via Electronic Payment

    • If any amount is still outstanding, create and apply an Adj CN to reduce the balance.

    • If there is a remaining amount for the unused period of the last invoice, issue a Refundable Credit Note (Ref CN) linked to the payment — refundable or applicable to another invoice.

    • Issue the pro-rata invoice and the full invoice for the next billing cycle.

  • Scenario: Last Invoice Paid Using Credits

    • If any amount is still outstanding, create and apply an Adj CN to reduce the balance.

    • If there is a remaining amount for the unused period of the last invoice, issue a Ref CN not linked to a payment — can only be applied to another invoice.

    • Issue the pro-rata invoice and the full invoice for the next billing cycle.

  • Scenario: Last Invoice Paid Using Credits and Electronic Payment

    • If any amount is still outstanding, create and apply an Adj CN to reduce the balance.

    • If there is a remaining amount for the unused period of the last invoice:

      • Issue a Ref CN linked to the payment — refundable or applicable to another invoice.

      • Issue a Ref CN not linked to a payment — can only be applied to another invoice.

    • Issue the pro-rata invoice and the full invoice for the next billing cycle.

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