Effective Dates and Price Proration

This section describes how proration applies to different types of calculation rules. Proration implies assessing charges proportionately.

The term "proration" describes two different issues:

• Prorating a charge whose value changes during a bill period. For example, if a tax rate changes during a bill period and you've indicated that such changes should be prorated, the system prorates the tax change (e.g., 20 days at 5% and 10 days at 6%).
• Prorating charges when the time period being billed is not in sync with the time period in which the charges were defined in the rate. For example, if a rate contains a flat monthly charge and the bill period spans two months, the flat charge must be prorated.

This is a complicated topic as it's possible for many proration issues to exist on a single bill. For example, on a single bill:

• The rate structure can change several times during the bill period (i.e., multiple rate versions are effective).
• The taxing authority changes the tax rate.
• The customer's tax exemption changes.
• The customer-specific price can change.
• etc.