Enable Proration of One-Time Charges

You can prorate one-time charges and return credit for them when a subscription is closed.

This ability to prorate subscriptions lets you negotiate for an entire subscription up front and still prorate the charges and offer credit on termination.

You can select the Enable Proration check box from the Edit Product page of subscription-type products that are in draft or active status (if there's no end date).

At the time of closing, you can decide to prorate with credit or prorate without credit. Your close credit method determines how much credit is issued to your customer.

Impact of Close Credit Method on Prorated One-Time Charges

Prorate without credit:

If the charge is billed periodically, and the close date is in the future, the one-time charge is prorated the same way recurring charges are prorated.

If the charge is not periodically billed, no credit is issued to the customer.

Prorate with credit:

If the charge is periodically billed, the one-time charge is prorated, and the appropriate credit is issued. This amount is calculated the same way as recurring charges.

Consider a 3-year subscription from 1-Jul-21 to 30-Jun-24 with a one-time charge of $6000. Billed periodically, this subscription’s billing summary will be as follows:

Period	Charge	Sequence	Interface Date	Invoice Date	Bill-from Date	Bill-to-Date	Amount
1	Sale Price	1	1-Jul-21	1-Jul-21	1-Jul-21	30-Jun-22	$2,000.00
2	Sale Price	2	1-Jul-22	1-Jul-22	1-Jul-22	30-Jun-23	$2,000.00
3	Sale Price	3	1-Jul-23	1-Jul-23	1-Jul-23	30-Jun-24	$2,000.00

If this subscription is closed on 1-Nov-22 using prorate with credit, the credit to be issued is calculated as follows:

((duration of active
                subscription/total duration of the subscription) x one-time charge) – one-time
                charge

Here, the credit will be calculated as ((123/365)x2000)-2000 = -$1326.

Here's the billing summary for this subscription:

Period	Charge	Sequence	Interface Date	Invoice Date	Bill-from Date	Bill-to-Date	Amount
1	Sale Price	1	1-Jul-21	1-Jul-21	1-Jul-21	30-Jun-22	$2,000.00
2	Sale Price	2	1-Jul-22	1-Jul-22	1-Jul-22	30-Jun-23	$2,000.00
2	Sale Price	2	1-Nov-22	1-Nov-22	1-Nov-22	30-Jun-23	-$1,326.027

If the charge isn't periodically billed, appropriate credit is calculated based on the close date. Consider the same 3-year subscription with a one-time charge of $6000.

Product	Quantity	Start Date	End Date	Duration	Period	Bill Frequency	Inv Rule	Billing Date	Period Start	Period Type
Product1	1	1-Jul-21	30-Jun-24	3	Year	Year	Advance	Period Start	Service Start	Actual

Here, if the subscription is closed with prorate with credit on 1-Mar-22, the credit to be issued is calculated as follows:

((duration of active
                subscription/total duration of the subscription) x one-time charge) – one-time
                charge which is ((243/1096) * 6000)-6000 = $4669.70

Here's the billing summary:

Period	Charge	Sequence	Interface Date	Invoice Date	Bill-from Date	Bill-to-Date	Amount
1	Sale Price	1	1-Jul-21	1-Jul-21	1-Jul-21	30-Jun-24	$6,000.00
2	Sale Price	1	1-Mar-22	1-Mar-22	1-Mar-22	30-Jun-24	-4669.70

Things to Keep in Mind

If the one-time charge is recognized immediately in Revenue Management, the revenue contract is revised, on close, to reflect the prorated amount. If the one-time charge is recognized periodically, the revenue contract line is revised as it is for a recurring charge.
You can’t prorate one-time charges for evergreen subscriptions.