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Usage charge proration

Zuora

Usage charge proration

We introduce a new field called proration option under product rate plan charge level, which allows you to select the proration behavior for a specific charge instead of using the tenant level proration logic configured in the billing setting. Meaning you can have different proration behaviors for different charges.

For usage charges, the default tenant setting will not prorate, but with this new field, we have a new value Timebased that allows a usage charge to prorate based on the actual number of days.

This one for usage charge is under advanced consumption.

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The Proration setting under the usage charge billing and frequency provides the following options:

  • NoProration - This is a default current system behavior for a usage charge.
  • TimeBased - This will prorate the usage charge amount using the actual number of days if the billing period is a partial period.

For example:

For a monthly billing period,

The cost per unit charge model is $1

Bill Cycle Day (BCD) = 1

Charge start date = January 15, 2023

Charge end date = January 31, 2023

Total number of days in January = 31

Total usage amount for January = 31 * $1 = $31

Number of prorated days in January = 17

The prorated amount is calculated as follows:

Total amount for the full month * (prorated days/total number of days for the full month)

which is,

$31 * (17/31) = $17