This article introduces how to calculate total amount for recurring charges with partial period proration. It gives you the formulas and examples of calculating total amount and prorated amount.
With recurring charges for any periods less than a month, the total amount is equal to the sum of prorated amount for partial months plus charge amount for full months.
The calculation of prorated amount for partial months depends on the setting of the following billing rules:
If Bill recurring charges for partial month (with monthly based billing periods)? is set to Yes, prorated amount is calculated. You can choose to calculate prorated amount either using 30 days in a month or using actual days in a month by setting the When prorating a month, assume 30 days in a month or use actual days? billing rule.
The following table describes formulas and examples of total amount calculation with different billing rules.
When prorating a month, assume 30 days in a month | When prorating a month, use actual days |
---|---|
Total_amount = Price_per_month * (Number_of_full_months + (Prorated_days/ 30) ) | Total_amount = Price_per_month * (Number_of_full_months + (Prorated_days/Actual_number_of_days_of_the_prorated_month) ) |
Example Scenario:
With the above example scenario and the billing rule of assuming 30 days in a month, the total amount is calculated based on the formula:
Total amount on the invoice: $146.67 = $100 * (1 + 14/30)
With the above example scenario and the billing rule of using actual days in a month, the total amount is calculated based on the formula:
Total amount on the invoice: $145.16 = $100 * (1 + 14/31)
With recurring charges for partial weekly billing periods, the total amount is equal to the sum of prorated amount for partial weeks plus charge amount for full weeks.
The calculation of prorated amount for partial weeks depends on the setting of the Bill recurring charges for partial week (with weekly based billing periods)? billing rule. If this billing rule is set to Yes, the prorated amount is calculated.
You can use the following formula to calculate the total amount:
Charge_amount = Price_per_week* (Number_of_full_weeks + (Prorated_days/7 ) )
Example Scenario:
In this example, the total amount is calculated based on the formula:
Total amount on the invoice: $528.57 = $100 * (5 + 2/7)
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With recurring charges for partial quarter, semi-annual, or annual billing periods, the total amount is equal to the sum of the prorated amount for partial billing periods plus charge amount for full billing periods.
The calculation of prorated amount for partial billing periods depends on the setting of the following billing rules:
If Prorate recurring charges for partial period? is set to Yes, the prorated amount is calculated. The results of the proration depend on the combination of the When prorating periods greater than a month, prorate by month first, or by day? and When prorating a month, assume 30 days in a month or use actual days? billing rules.
The following table provides you the formulas and examples of the total amount calculation with different bill rules.
When prorating a month, assume 30 days in a month | When prorating a month, use actual days | |
---|---|---|
When prorating periods greater than a month, prorate by month (If Bill recurring charges for partial month (with monthly based billing periods)? billing rule is set to Yes) | Total_amount = Price_per_month * (Number_of_full_months + (Prorated_days/30) ) | Total_amount = Price_per_month * (Number_of_full_months + (Prorated_days/Actual_number_of_days_of_prorated_month) ) |
When prorating periods greater than a month, prorate by day | Total_amount = Price_per_billing_period * (Number_of_full_billing_periods + Prorated_days/Number_of_days_of_prorated_period) Use 30 days to calculate Number_of_days_of_prorated_period. For example:
| Total_amount = Price_per_billing_period * (Number_of_full_billing_periods + Prorated_days/Actual_number_of_days_of_prorated_period) |
Example Scenario:
With the above example scenario and the following billing rules:
The total amount is calculated based on the formula:
Total amount on the invoice: $560.00 = $1200/12 * (5 + 18/30)
With the above example scenario and the following billing rules:
The total amount is calculated based on the formula:
Total amount on the invoice: $558.06 = $1200/12 * (5 + 18/31)
With the above example scenario and the following billing rules:
The total amount is calculated based on the formula:
Total amount on the invoice: $570.00 = $1200 * (171/360)
With the above example scenario and the following billing rules:
The total amount is calculated based on the formula:
Total amount on the invoice: $562.19 = $1200 * (171/365)
See Billing Period Alignment for more information about charge calculation with different billing period alignments.