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Re: How proration credit calculated and remove proration from Invoice.

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Zuora Support

How proration credit calculated and remove proration from Invoice.

For a Monthly Subscription, When a product rate plan charge is removed from May-2019 with effective date 24/05/2019 which has monthly service period from 22/05/2019 to 21/06/2019. Need to understand how proration credit calculated for June-2019 invoice and how to remove them from the invoice. (22nd of June generates Monthly Proration Credit of -67.35 USD)

 

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Zuora Support

Re: How proration credit calculated and remove proration from Invoice.

When a product rate plan charge is removed within the services period which has already been invoiced, a prorated credit will be created for the remaining period from the date of removal.

 

In our case, the charge has already been billed for the service period 22/05/2019 to 21/06/2019 and when we create an amendment to remove the product rate plan charge on 24/05/2019, prorated credit will be created for the 05/24/2019-06/21/2019.

 

So the calculation of the credit amount is (Unit Price / No of days in month) * (No of days billed) i.e  ( 72 / 31 ) * 29 = 67.35.

 

In order to avoid the proration credit we must create the amendment for removal of the product rate plan charge, we need to set the effective date as next service period start date. Otherwise, as you remove the product in the middle of the billed period, system will create credit back the proration period. 

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1 REPLY 1
Highlighted
Zuora Support

Re: How proration credit calculated and remove proration from Invoice.

When a product rate plan charge is removed within the services period which has already been invoiced, a prorated credit will be created for the remaining period from the date of removal.

 

In our case, the charge has already been billed for the service period 22/05/2019 to 21/06/2019 and when we create an amendment to remove the product rate plan charge on 24/05/2019, prorated credit will be created for the 05/24/2019-06/21/2019.

 

So the calculation of the credit amount is (Unit Price / No of days in month) * (No of days billed) i.e  ( 72 / 31 ) * 29 = 67.35.

 

In order to avoid the proration credit we must create the amendment for removal of the product rate plan charge, we need to set the effective date as next service period start date. Otherwise, as you remove the product in the middle of the billed period, system will create credit back the proration period. 

View solution in original post