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Part 1: Understand Amendments and Proration

Zuora

Part 1: Understand Amendments and Proration

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Overview

Zuora Internal Documentation. This article is intended for Zuora only. Do not share or distribute publicly.

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Amendments

In Zuora, an amendment represents any change to a customer’s subscription. For example, you utilize amendments within Zuora to cancel a subscription, upgrade a subscription to a different rate plan (bronze to silver), or increase the number of seats purchased on an existing subscription.

You can use amendments to:

  • Change the terms and conditions of a contract
  • Add a product to a subscription
  • Remove a product from a subscription
  • Update an existing product within a subscription (for example, update its price or quantity)
  • Renew a subscription in advance of the auto-renewal date
  • Cancel a subscription.
Note: In addition to making amendments on a subscription, you might need to make periodic changes to a customer's account or payment information.  These changes, covered at the end of this milestone, are not amendments but rather are changes to a customer account in Zuora.

Proration

When you make amendments to a subscription in the middle of a customer's billing cycle, it is important to understand that prorated charges or credits may occur. For example:

  • If you change a customer's rate plan in the middle of a month, the customer may incur a partial month's credit for the unused portion of the original plan and a partial month's charge for the new plan
  • If you add more seats to a subscription in the middle of a month, the customer may incur a partial month's charge for these newly added seats
  • If you cancel a subscription in the middle of a month, the customer may be due a credit for the remainder of the month where your service will not be used.

Zuora allows you unlimited flexibility in specifying how you want proration to be calculated for subscription amendments.  For example, if you do not want any proration in your business operations, you can turn off this global setting within Zuora.  On the other hand, if you want proration to occur on upgrades or downgrades but not on cancellations, then you can make use of amendment effective dates to achieve your desired behavior.

As you explore the mechanics of performing amendments in the subsequent parts of this milestone, we urge you to refer to our article on how to make effective use of proration in Zuora.