About Proration

Calculating Prorated Cycle Fees

BRM calculates the prorated fee for a specified period by multiplying the cycle fee defined in the applicable charge offer by a scale based on the amount of time the charge offer is valid during the cycle. The scale for a whole cycle (unit interval, or usually an accounting cycle) is equal to 1.

BRM calculates the scale for a partial cycle by dividing the number of days in the partial cycle by the number of days in the unit interval within which it falls. The number of days in a unit interval will vary depending on its start and end dates.

If the period for which the prorated fee is being calculated is greater than one unit interval, the scale will be greater than 1. Likewise, if the period is less than one unit interval, the scale will be less than 1. For example, if the cycle fee is $100, and the period being prorated is half a unit interval, the scale for that interval will be 0.5. So the prorated cycle fee is 0.5 * $100 = $50.

BRM does the following to calculate the prorated fee for each charge offer that is valid during the cycle:

Calculates the unit intervals. See "Calculating the Unit Interval".
Calculates the scales for the part of the period to be prorated that falls into each unit interval.
Sums up the scales for all the unit intervals to get the scale for the entire period to be prorated.
Calculates the prorated amount by multiplying the scale for the entire period by the cycle fee amount.

Calculating the Unit Interval

BRM takes into account what the use_number_of_days_in_month entry in the Connection Manager (CM) configuration (pin.conf) file is set to while calculating the unit interval. Also, the use of special days (29th, 30th, and 31st of a month) for billing is taken into account while calculating the unit interval.

Note:

If the timestamp_rounding entry in the CM pin.conf file is set to 0, the unit interval is calculated in seconds because the timestamp will not be rounded to midnight and the proration will begin from the time that is indicated by the timestamp. If timestamp_rounding is set to 1, the unit interval will be calculated in days because the timestamp will be rounded to midnight.

Calculating Unit Interval When use_number_of_days_in_month Is Not Set or 0

If use_number_of_days_in_month is not set or is set to 0, the unit interval is calculated based on the billing time. Assuming the billing time to be March 22, starting from the billing time, BRM calculates the last unit interval by moving to the left (on the time axis) one month at a time until the beginning of the period to be prorated is covered. For example, while calculating the prorated fee for Mar 1–Mar 15, it takes the unit interval as 28 (the number of days between February 22 and March 22) because both March 1 and March 15 fall between February 22 and March 22. See "Example 1: Use_number_of_days_in_month Is Not Set or Set to 0".

Calculating Unit Interval When use_number_of_days_in_month Is Set to 1

If use_number_of_days_in_month is set to 1 and the period to be prorated falls within the same calendar month, the unit interval is the number of days in the whole calendar month in which the period to be prorated falls. For example, while calculating the prorated fee for Mar 1–Mar 15 (both dates fall in March), BRM calculates the unit interval as 31, because March has 31 days. See "Example 2: Use_number_of_days_in_month Is Set to 1".

Note:

If the period for which BRM is prorating the fees is less than a month but spans across multiple months (for example, Aug 19–Sep 15) or if the cycle fee is for multimonth, use_number_of_days_in_month is ignored.

Calculating Unit Interval When Billing Day of Month Is 29, 30, or 31

When the billing day of month (DOM) is set to 29, 30, or 31, the unit interval calculation is based on the option you set for this feature (the forward or back option set in the /config/business_params object.) If the option is set to forward and the month does not have the billing DOM, billing will run on the first day of the next month. If the option is set to back and the month does not have the billing DOM, billing will run on the last day of the previous month. This causes the start date of the unit interval to shift based on what option is set.

Examples of Proration

Following are some examples of proration. In each of these examples, the unit interval is calculated differently. .

Example 1: Use_number_of_days_in_month Is Not Set or Set to 0

In this example, illustrated in Figure 13-1, the prorated cycle fee is calculated for the interval Feb 15–Apr 13 with the billing time as April 22. To calculate the prorated fee for this period, BRM does the following:

Calculates the Unit Intervals for the Period

Starting from the billing time (April 22), BRM calculates the last unit interval by moving to the left one month at a time (on the time axis). Therefore, the last unit interval will be Mar 22–Apr 22. Similarly, it will continue to calculate unit intervals until the start time of the first unit interval (January 22) will be equal to or before the start time of the given period to be prorated (February 15). As a result, it gets the following unit intervals:

Mar 22–Apr 22 (last unit interval)

Feb 22–Mar 22 (second unit interval)

Jan 22–Feb 22 (first unit interval)

Figure 13-1 Example 1

Description of "Figure 13-1 Example 1"

Calculates the Scale

To calculate the scale for the period Feb 15–Apr 13, BRM does the following:

Calculates the scale for the period Feb 15–Feb 22 with the unit interval as Jan 22–Feb 22.

Scale = 7/31 = 0.23

where 7 is the number of days between February 15 and February 22 and 31 is the number of days between January 22 and February 22.
Calculates the scale for the period Feb 22–Mar 22 with the unit interval as Feb 22–Mar 22. This scale is 28/28 = 1 because the period to be prorated is the unit interval.
Calculates the scale for the period Mar 22–Apr 13 with the unit interval as Mar 22–Apr 22.

Scale = 22/31 = 0.71

where 22 is the number of days between March 22 and April 13 and 31 is the number of days between March 22 and April 22.
Calculates the scale for the whole period Feb 15–Apr 13 as the sum of the scales from steps 1, 2, and 3: 0.23 + 1.0 + 0.71 = 1.94.

Calculates the Prorated Amount

If the cycle fee amount is $100, BRM calculates the prorated amount for the period Feb 15–Apr 13 as follows:

1.94 * $100 = $194

Example 2: Use_number_of_days_in_month Is Set to 1

In this example, illustrated in Figure 13-2, the prorated cycle fee is calculated for the interval Feb 15–Apr 13 with the billing time as April 22. Because use_number_of_days_in_month is set to 1, BRM calculates the unit interval based on calendar month for the part of the proration time that falls in the same calendar month. To calculate the prorated fee for this period, it does the following:

Calculates the Unit Intervals for the Period

Starting from the billing time (April 22), BRM calculates the last unit interval by moving to the left one month at a time (on the time axis). Therefore, the unit intervals will be as follows:

Mar 22–Apr 22 (last unit interval)

Feb 22–Mar 22 (second unit interval)

Feb 1–Feb 28 (first unit interval)

Note:

This unit interval is the number of days in February because the entire period Feb 15–Feb 22 falls in February.

Figure 13-2 Example 2

Description of "Figure 13-2 Example 2"

Calculates the Scale

To calculate the scale for the period Feb 15–Apr 13, BRM does the following:

Calculates the scale for the period Feb 15–Feb 22 with the unit interval as Feb 1–Feb 28.

Note:

If the part of the period to be prorated falls in the same calendar month, the unit interval is the number of days in the month. In this example, because the entire period Feb 15–Feb 22 falls in February, the unit interval is 28, the number of days in February.

Scale = 7/28 = 0.25

where 7 is the number of days between February 15 and February 22 and 28 is the number of days in February.
Calculates the scale for the period Feb 22–Mar 22 with the unit interval as Feb 22–Mar 22. This scale is 28/28 = 1 because the period to be prorated is the unit interval.
Calculates the scale for the period Mar 22–Apr 13 with the unit interval as Mar 22–Apr 22.

Scale = 22/31 = 0.71

where 22 is the number of days between March 22 and April 13 and 31 is the number of days between March 22 and April 22.
Calculates the scale for the whole period Feb 15–Apr 13 as the sum of the scales from steps 1, 2, and 3: 0.25 + 1.0 + 0.71 = 1.96.

Calculates the Prorated Amount

If the cycle fee amount is $100, BRM calculates the prorated amount for the period Feb 15–Apr 13 as follows:

1.96 * $100 = $196

Examples Using the 29th, 30th, and 31st for Billing Day of Month

The examples below show the use of special days (29th, 30th, 31st) as the billing DOM because of which the unit interval calculation will be based on the option you set for this feature (the forward or back option set in /config/business_params object). If the option is set to forward and the month does not have the billing DOM, billing is run on the first day of the next month. If the option is set to back and the month does not have the billing DOM, billing is run on the last day of the previous month. This causes the unit interval start date to shift based on the option set.

Example 3a: Use Forward Option with use_number_of_days_in_month Set to 0

This example, illustrated in Figure 13-3, assumes the billing option to be set to forward and use_number_of_days_in_month to be set to 0. To calculate the prorated cycle fee for the period Feb 15–Apr 13 with the billing day of month as April 30, BRM does the following:

Calculates the Unit Intervals for the Period

Starting from the billing time (April 30), BRM calculates the last unit interval by moving to the left (on the time axis) one month at a time. Therefore, the last unit interval will be Mar 30–Apr 30. Similarly, it continues to calculate unit intervals until the start time of the first unit interval (January 30) will be equal to or before the start time of the given period to be prorated (February 15). As a result, BRM gets the following unit intervals:

Mar 30–Apr 30 (last unit interval)

Mar 1–Mar 30 (second unit interval)

Note:

Because February does not have 30 days, and because the billing option is set to forward, BRM calculates this unit interval as beginning on the first day of the next month, which is March 1.

Jan 30–Mar 1 (first unit interval)

Note:

Because January does have 30 days, it calculates this unit interval as beginning on January 30.

Figure 13-3 Example 3a

Description of "Figure 13-3 Example 3a"

Calculates the Scale

To calculate the scale for the period Feb 15–Apr 13, BRM does the following:

Calculates the scale for the period Feb 15–Mar 1 with the unit interval as Jan 30–Mar 1 as follows:

Scale = 14/30 = 0.47

where 14 is the number of days from February 15 and March 1 and 30 is the number of days from January 30 and March 1.
Calculates the scale for the period Mar 1–Mar 30 with the unit interval as Mar 1–Mar 30.

The scale for this period is 29/29 = 1 because number of days to be prorated is equal to number of days in the unit interval.
Calculates the scale for the period Mar 30–Apr 13 with the unit interval as Mar 30–Apr 30 as follows:

Scale = 14/31 = .45

where 14 is the number of days from March 30 and April 13 and 31 is the number of days from March 30 and April 30.
Adds the scales from the steps above to get the scale for the whole period:

Scale for the period Feb 15–Apr 13 = .47 + 1.0 + .45 = 1.92

Calculates the Prorated Cycle Fee Amount

If the cycle fee is $100, the prorated cycle fee for the period Feb 15–Apr 13 will be:

1.92 * $100 = $192

Example 3b: Use Forward Option with use_number_of_days_in_month Set to 1

This example, illustrated in Figure 13-4, assumes the billing option to be set to forward and use_number_of_days_in_month to be set to 1. To calculate the prorated cycle fee for the period Feb 15–Apr 13 with the billing DOM as April 30, BRM does the following:

Calculates the Unit Intervals for the Period

Starting from the billing time (April 30), BRM calculates the last unit interval by moving to the left one month at a time (on the time axis). Therefore, the last unit interval will be Mar 30–Apr 30. Similarly, it continues to calculate unit intervals until the start time of the first unit interval (January 30) is equal to or before the start time of the given period to be prorated (February 15). As a result, BRM gets the following unit intervals:

Mar 30–Apr 30 (last unit interval)

Mar 1–Mar 31 (second unit interval)

Note:

Because February does not have 30 days, and because the billing option is set to forward, BRM calculates this unit interval as beginning on the first of the next month, which is March 1. Also, use_number_of_days_in_month is set to 1, it calculates this unit interval to be 31, the number of days in March.

Jan 30–Mar 1 (first unit interval)

Note:

Because January does have 30 days, this unit interval will begin on Jan 30.

Figure 13-4 Example 3b

Description of "Figure 13-4 Example 3b"

Calculates the Scale

To calculate the scale for the period Feb 15–Apr 13, BRM does the following:

Calculates the scale for the period Feb 15–Mar 1 with the unit interval as Jan 30–Mar 1 as follows:

Scale = 14/30 = 0.47

where 14 is the number of days from February 15 and March 1 and 30 is the number of days between January 30 and March 1.
Calculates the scale for the period Mar 1–Mar 30 with the unit interval as Mar 1–Mar 31.

Note:

Because March 1 and March 30 fall in the same calendar month, the unit interval here will be the number of days in March, because use_number_of_days_in_month is set to 1.

Scale = 29/31 = .94

where 29 is the number of days between March 1 and March 30 and 31 is the number of days in March.
Calculates the scale for the period Mar 30–Apr 13 with the unit interval as Mar 30–Apr 30 as follows:

Scale = 14/31 = .45

where 14 is the number of days from March 30 and April 13 and 31 is the number of days between March 30 and April 30.
Adds the scales in the steps above to get the scale for the whole period:

Scale for the period Feb 15–Apr 13 = .47 + .94 + .45 = 1.86

Calculates the Prorated Cycle Fee Amount

If the cycle fee is $100, the prorated cycle fee for the period Feb 15–Apr 13 will be:

1.86 * $100 = $186

Example 3c: Use Back Option with use_number_of_days_in_month Set to 1

This example, illustrated in Figure 13-5, assumes the billing option to be set to back and use_number_of_days_in_month to be set to 1. To calculate the prorated cycle fee for the period Feb 15–Apr 13 with the billing DOM as April 30, BRM does the following:

Calculates the Unit Intervals for the Period

Starting from the billing time (April 30), BRM calculates the last unit interval by moving to the left one month at a time (on the time axis). Therefore, the last unit interval will be Mar 30–Apr 30. Similarly, it continues to calculate unit intervals until the start time of the first unit interval will be equal to or before the start time of the given period (February 15) to be prorated. As a result, it gets the following unit intervals:

Mar 30–Apr 30 (last unit interval)

Feb 28–Mar 30 (second unit interval)

Note:

Because February does not have 30 days, and because the billing option is set to back, BRM calculates this unit interval as beginning on the last day of the previous month, which is February 28.

Feb 1–Feb 28 (first unit interval)

Note:

In this example, the first unit interval would have started on January 30, because January does have 30 days, but BRM ignores this and takes the number of days in February as the unit interval because use_number_of_days_in_month is set to 1.

Figure 13-5 Example 3c

Description of "Figure 13-5 Example 3c"

Calculates the Scale

To calculate the scale for the period Feb 15–Apr 13, BRM does the following:

Calculates the scale for the period Feb 15–Feb 28 with the unit interval as Feb 1–Feb 28 as follows:

Scale = 13/28 = 0.46

where 13 is the number of days from February 15 and February 28 and 28 is the number of days in February.

Note:

Because February 15 and February 28 fall in the same calendar month, the unit interval here will be the number of days in February because use_number_of_days_in_month is set to 1.
Calculates the scale for the period Feb 28–Mar 30 with the unit interval as Feb 28–Mar 30.

The scale for this period is 30/30 = 1 because the number of days to be prorated is equal to number of days in the unit interval.
Calculates the scale for the period Mar 30–Apr 13 with the unit interval as Mar 30–Apr 30 as follows:

Scale = 14/31 = .45

where 14 is the number of days from March 30 and April 13 and 31 is the number of days between March 30 and April 30.
Adds the above three scales to get the scale for the whole period:

Scale for the period Feb 15–Apr 13 = .46 + 1.0 + .45 = 1.91

Calculates the Prorated Cycle Fee Amount

If the cycle fee is $100, the prorated cycle fee for the period Feb 15–Apr 13 will be:

1.91 * $100 = $191

Example 3d: Use Back Option with use_number_of_days_in_month Set to 0

This example, illustrated in Figure 13-6, assumes the billing option to be set to back and use_number_of_days_in_month to be set to 0. To calculate the prorated fee for the period Feb 15–Apr 13 with the billing day of month as April 30, BRM does the following:

Calculates the Unit Intervals for the Period

Starting from the billing time (April 30), it calculates the last unit interval by moving to the left one month at a time (on the time axis). Therefore, the last unit interval will be Mar 30–Apr 30. Similarly, it continues to calculate unit intervals until the start time of the first unit interval will be equal to or before the start time of the given period to be prorated (February 15). As a result, BRM gets the following unit intervals:

Mar 30–Apr 30 (last unit interval)

Feb 28–Mar 30 (second unit interval)

Note:

Because February does not have 30 days, and because the billing option is set to back, BRM calculates this unit interval as beginning on the last day of the previous month, which is February 28.

Jan 30–Feb 28 (first unit interval)

Note:

Because January does have 30 days, BRM calculates this unit interval as beginning on January 30.

Figure 13-6 Example 3d

Description of "Figure 13-6 Example 3d"

Calculates the Scale

To calculate the scale for the period Feb 15–Apr 13, BRM does the following:

Calculates the scale for the period Feb 15–Feb 28 with the unit interval Jan 30–Feb 28:

Scale = 13/29 = 0.45

where 13 is the number of days from February 15 and February 28 and 29 is the number of days from January 30 and February 28.
Calculates the scale for the period Feb 28–Mar 30 with the unit interval as Feb 28–Mar 30.

The scale for this period is 30/30 = 1 because the number of days to be prorated is equal to number of days in the unit interval.
Calculates the scale for the period Mar 30–Apr 13 with the unit interval as Mar 30–Apr 30.

Scale = 14/31 = .45

where 14 is the number of days from March 30 and April 13 and 31 is the number of days from March 30 and April 30.
Adds the scales for the above steps to get the scale for the whole period:

Scale for the period Feb 15–Apr 13 = .45 + 1.0 + .45 = 1.90

Calculates the Prorated Cycle Fee Amount

If the cycle fee is $100, the prorated cycle fee for the period Feb 15–Apr 13 will be:

1.90 * $100 = $190

Proration for Special Cases

BRM includes proration settings that address customers with cycle arrears fees who purchase, inactivate, and reactivate charge offers within the first cycle.

You choose the rating behavior when such events occur by setting the cycle_arrear_proration parameter in the CM configuration (pin.conf) file:

- fm_rate cycle_arrear_proration = 0|1

Note:

You must restart the CM after you change this parameter.

When you set up proration in a charge, you choose a proration setting for when the charge offer is purchased and for when it is canceled:

To use the purchase-time proration setting to rate periods in which a customer both purchases and inactivates a charge offer, set the cycle_arrear_proration parameter to 0.
To use the cancellation proration setting to rate periods in which a customer cancels a charge offer, set the cycle_arrear_proration parameter to 1.

Special Cases

Some special proration cases may result in unexpected billing results:

A customer purchases, inactivates, and reactivates a charge offer with a cycle arrears fee all in the same accounting cycle. The charge offer is set to prorate on purchase and to charge full on cancellation, and the cycle_arrear_proration entry in the CM pin.conf is set to 1.

In this case, instead of charging a prorated amount based on the total time the charge offer is active during the first cycle, the full amount for the cycle is charged.
A customer purchases, inactivates, and reactivates a charge offer with a cycle arrears fee all in the same accounting cycle. The charge offer is set to no charge on purchase and to prorate on cancellation, and the cycle_arrear_proration entry in the CM pin.conf is set to 1.

In this case, instead of being charged nothing for the first accounting cycle, the customer is charged a prorated amount based on the time the charge offer is active.

For example, if the customer purchases a charge offer, inactivates it after 5 days, reactivates it later for another 5 days before inactivating it, and then reactivates it later for a total of 8 days before the cycle ends, you charge the customer for 5 + 5 + 8 or 18 days of use.
A customer purchases, inactivates, and reactivates a charge offer with a cycle arrears fee all in the same accounting cycle. The charge offer is set to charge full on purchase and to prorate on cancellation, and the cycle_arrear_proration entry in the CM pin.conf is set to 1.

In this case, instead of being charged for the whole accounting cycle, the customer is charged a prorated amount based on the total time during the cycle that the charge offer is active.
With a cycle arrears fee, the customer inactivates and reactivates a charge offer in a cycle other than the cycle in which the charge offer is purchased. The charge offer has proration settings of charge full, no charge, or prorate on purchase and charge full or no charge on cancellation.

In this case, the customer is charged a prorated amount equal to the time the charge offer is active during the accounting cycle from the last reactivation to the end of the cycle. There is no charge for all other active time periods during the accounting cycle.
With cycle forward billing, the customer purchases, inactivates, and reactivates a charge offer in the same period. The charge offer has proration settings of charge full on purchase and prorate on cancellation.

In this case, instead of being charged for the whole accounting cycle, the customer is charged for the whole cycle less the period of time that the charge offer is inactivated.
Note:
- You can set your policy settings so that customers are not charged for short usage periods. This establishes the possibility of long cycles over 30 days for which a customer is not billed.
- For the proration settings Charge for the full cycle on purchase and Don't charge this cycle on cancellation, a cycle is always “1" or less, even if a customer purchases and cancels within a long cycle.
- The following proration settings determine what is refunded when a charge offer for cycle forward billing is inactivated or canceled:
  
  Charge for the full cycle: Nothing is refunded.
  
  Don't charge this cycle: The total cycle fee is refunded.
  
  Charge based on usage: The unused portion of the monthly usage fee is refunded.

Addressing Special Cases

There are several techniques you can use to address any special cases that may occur when customers inactivate and reactivate an account in the same accounting cycle:

Inform your customers of the discrepancies.
Do not allow your customer service representatives (CSRs) to inactivate and reactivate accounts frequently, especially during the first accounting cycle in which a charge offer is purchased.
Because most special cases occur when you use cycle arrears fees, consider using cycle forward fees instead.

About 30-Day-Based Proration

To work in parallel with older legacy billing systems, you can use 30-day-based proration.

In older legacy billing systems, it is common to use 30 days for calculating proration, irrespective of the actual number of days in the month or the billing cycle. By default, BRM calculates proration based on the number of days in the billing cycle. You use 30-day-based proration when you have BRM with an older billing system requiring 30-day-based proration.

Note:

Making 30-day-based proration work with a normal calendar year can cause unexpected behavior. See "Special Cases".

Note:

30-day-based proration cannot be used with multimonth billing cycles.

Examples of 30-Day-Based Proration

Based on your proration setting, BRM calculates the prorated cycle amount differently, which may yield different results.

In the examples below, illustrated in Figure 13-7, Figure 13-8, Figure 13-9, and Figure 13-10, February has 28 days and billing occurs on the second day of every month. The monthly cycle forward fee is $30 and timestamp_rounding is set to 1 days in the CM pin.conf file.

Example 6: Prorated Purchase Fee with 31-day Billing Cycle

Figure 13-7 Example 6

Description of "Figure 13-7 Example 6"

In this example, BRM calculates the prorated cycle fee as follows:

Using 30-Day proration

Calculates the scale using 30 days as the base:

scale = 21/30 = .70

where 21 is the number of days from midnight January 12 to midnight February 2.
Calculates the prorated cycle fee:

cycle fee amount * scale = $30.00 * .70 = $21.00

Using 31 Days in the Billing Cycle

Calculates the scale using 31 days as the base:

scale = 21/31 = .68

where 21 is the number of days from midnight January 12 to midnight February 2.
Calculates the prorated cycle fee:

cycle fee amount * scale = $30.00 * .68 = $20.32

Example 7: Prorated Cancel Fee with 31-day Billing Cycle

Figure 13-8 Example 7

Description of "Figure 13-8 Example 7"

In this example, BRM calculates the cycle fee refund as follows:

Using 30-Day Proration

Calculates the scale using 30 days as the base:

scale = 15/30 = .50

where 15 is the number of days from midnight January 18 to midnight February 2.
Calculates the refund amount:

cycle fee amount * scale = $30.00 * .50 = $15.00

Using 31 Days in the Billing Cycle

Calculates the scale using 31 days as the base:

scale = 15/31 = .48

where 15 is the number of days from midnight January 18 to midnight February 2.
Calculates the refund amount:

cycle fee amount * scale = $30.00 * .48 = $14.52

Example 8: Prorated Purchase Fee with 28-Day Billing Cycle

Figure 13-9 Example 8

Description of "Figure 13-9 Example 8"

In this example, BRM calculates the prorated cycle fee as follows:

Using 30-Day Proration

Calculates the scale using 30 days as the base:

scale = 15/30 = .50

where 15 is the number of days from midnight February 15 to midnight March 2.
Calculates the prorated cycle fee:

cycle fee amount * scale = $30.00 * .50 = $15.00

Using 28 Days in the Billing Cycle

Calculates the scale using 28 days as the base:

scale = 15/28 = .54

where 15 is the number of days from midnight February 15 to midnight March 2.
Calculates the prorated cycle fee:

cycle fee amount * scale = $30.00 * .54 = $16.07

Example 9: Prorated Cancel Fee with 28-Day Billing Cycle

Figure 13-10 Example 9

Description of "Figure 13-10 Example 9"

In this example, BRM calculates the cycle fee refund as follows:

Using 30-Day Proration

Calculates the scale using 30 days as the base:

scale = 15/30 = .50

where 15 is the number of days from midnight January 18 to midnight February 2.
Calculates the refund amount:

cycle fee amount * scale = $30.00 * .50 = $15.00

Using 28 Days in the Billing Cycle

Calculates the scale using 28 days as the base:

scale = 15/28 = .54

where 15 is the number of days from midnight January 18 to midnight February 2.
Calculates the refund amount:

cycle fee amount * scale = $30.00 * .54 = $16.07

Special Cases

When using 30-day proration, there can be unexpected results, as shown in the following examples:

Example 10: Full Purchase Fee Charged When Service Is Provided for 1 Day Less

In this example, illustrated in Figure 13-11, the billing cycle is 31 days. The customer purchases the charge offer on January 3, so the scale is 1. The customer pays the full $30 cycle fee even though the service is available for one day less.

Figure 13-11 Example 10

Description of "Figure 13-11 Example 10"

The prorated cycle fee:

cycle fee * scale = $30.00 * 1 = $30.

Example 11: Full Cancel Fee Refunded When Service Has Been Used for 1 Day

In this example, illustrated in Figure 13-12, the billing cycle is 31 days and the monthly service fee is $30. The customer purchases the charge offer on January 1 and cancels the charge offer on January 2. The scale is 1. The customer gets a full $30 refund even though the customer owned the charge offer for one day.

Figure 13-12 Example 11

Description of "Figure 13-12 Example 11"

The refund amount is:

cycle fee * scale = $30.00 * 1 = $30.

Note:

To avoid such situations, use the number of days in the billing cycle or number of days in the month proration settings, not the 30-day proration setting.

Enabling 30-Day-Based Proration

To enable 30-day-based proration:

Open the CM configuration file (BRM_home/sys/cm/pin.conf). BRM_home is the directory where you installed BRM components.
Edit the following entry:
```
-fm_bill enable_30_day_proration 0
```
where:
- 0 bases proration on the number of days in the billing cycle or number of days in the month. This is the default.
- 1 bases proration on a 30-day month.
Save and close the file.

Using Two Events to Prorate Charges for Charge Offers Whose Validity Ends in First Cycle

When prorating a cycle fee for a charge offer whose cycle validity period ends during the same billing cycle in which it is purchased, BRM can generate one or two events:

One event: By default, BRM generates a single event to charge for the used portion of the cycle.
Two events: BRM generates an event to charge for the entire cycle and then generates an event to refund the charge for the unused portion of the cycle (charge offer cycle validity end date through billing cycle end date).

For example, by default, if the charge offer is purchased on January 1 and its cycle validity period ends on January 16, only one event is generated for a prorated cycle fee for the number of days from midnight January 1 to midnight January 16. If you specify to create two events, the first event is generated for a cycle fee for the number of days from midnight January 1 to midnight February 1, and a second event is generated for a refund for the number of days from midnight January 16 to midnight February 1.

To enable this feature, run the pin_bus_params utility to change the CreateTwoEventsInFirstCycle business parameter. For information about this utility, see BRM Developer's Guide.

To use two events to prorate a cycle fee for a charge offer whose cycle validity period ends in the first cycle:

Go to BRM_home/sys/data/config.

Create an XML file from the /config/business_params object:

pin_bus_params -r -c "Subscription" bus_params_subscription.xml

In the XML file, change disabled to enabled:

<CreateTwoEventsInFirstCycle>enabled</CreateTwoEventsInFirstCycle>

Save the file as bus_params_subscription.xml.

Load the XML file into the BRM database:

pin_bus_paramsbus_params_subscription.xml

Stop and restart the CM.
(Multischema systems only) Run the pin_multidb script with the -R CONFIG parameter. For more information, see BRM System Administrator's Guide.

Prorating Cycle Fees after a Discount Purchase or Cancellation

When an off-cycle discount is purchased or canceled and the discount is configured to support any of the charge offer's cycle forward event types, the cycle fees are discounted for the duration of the cycle for which the discount is valid.

Examples of Cycle Fee Proration

These examples show how cycle fee proration works.

Example 12: Cycle Fee Is Refunded after a Discount Purchase

In this example, illustrated in Figure 13-13, a $30 monthly cycle fee is charged on January 1. An off-cycle discount is purchased on January 15 that discounts 10% of the monthly fee. The 10% discount is applied to the prorated monthly charge of $15 from Jan 15–Feb 1. A refund amount of $1.50 is credited to the account or service balance.

Figure 13-13 Example 12

Description of "Figure 13-13 Example 12"

Example 13: Minutes Are Prorated after a Discount Cancellation

In this example, illustrated in Figure 13-14, a cycle forward monthly event grants 100 minutes. The discount is canceled on January 15. The account made 200 minutes of calls between January 1 and January 15 at $0.10 per minute. The 100 minutes are prorated between January 1 and January 15. The account is granted 50 minutes and is charged $0.10 per minute for the remaining 150 minutes.

Figure 13-14 Example 13

Description of "Figure 13-14 Example 13"

Example 14: Canceled Discount Proration Is Not Taken into Account When Charge Offer Is Canceled

If you cancel a discount for a cycle fee and then you cancel the charge offer that owns that cycle fee, the prorated cycle fee is refunded without considering any discount that was applied. Therefore, the refunded amount might be more than the charged amount. However, this can be corrected by rerating the cycle event.

In this example, an account owns a charge offer with a cycle fee of $60, cancellation proration settings set to Do not charge for the cycle, and a discount of 10% on the cycle fee. At the beginning of the cycle, $54 is charged ($60 cycle fee minus $6 discount). In the middle of the cycle, if the discount is canceled, and $3 is charged back. Later, if the charge offer is canceled and $60 is refunded (because the cancellation proration setting is Do not charge for the cycle). Therefore, the net charge for the cycle is a credit of $3. If you rerate the events for the cycle, the expected charge of $60 will be applicable.

Prorating Cycle Fees When a Discount's Cycle Start or End Date Is Changed

When a discount's cycle start or end dates are changed, cycle fees may be discounted and refunded or charged depending on the new cycle start and end dates.

Examples of Cycle Fee Proration

These examples show how cycle fee proration works.

Example 15: Cycle Fee Is Refunded When a Discount's Cycle Start Date Is Changed

In this example, illustrated in Figure 13-15, a monthly cycle fee is charged on January 1. The monthly fee is discounted from Jan 20–Feb 1, and the discounted amount is credited to the account balance. When the discount cycle start date is changed to January 10, the monthly fee is discounted from Jan 10–Jan 20, and the discounted amount is credited to the account balance.

Figure 13-15 Example 15

Description of "Figure 13-15 Example 15"

Example 16: Cycle Fee Is Charged When a Discount's Cycle Start Date Is Changed

In this example, illustrated in Figure 13-16, a monthly cycle fee is charged on January 1. The monthly fee is discounted from Jan 10–Feb 1, and the discounted amount is credited to the account balance. When the discount cycle start date is changed to January 20, the discounted cycle fee amount is charged from Jan 10–Jan 20 because the discount is no longer valid during this period.

Figure 13-16 Example 16

Description of "Figure 13-16 Example 16"

Example 17: Cycle Fee Is Refunded When Discount's Cycle End Date Is Changed

In this example, illustrated in Figure 13-17, a monthly cycle fee is charged on January 1. The monthly fee is discounted from Jan 1–Jan 10. When the discount cycle end date is changed to January 20, the cycle fee is discounted from Jan 10–Jan 20, and the discounted amount is credited to the account balance.

Figure 13-17 Example 17

Description of "Figure 13-17 Example 17"

Example 18: Cycle Fee Is Charged When Discount's Cycle End Date Is Changed

In this example, illustrated in Figure 13-18, a monthly cycle fee is charged on January 1. The monthly fee is discounted from Jan 1–Jan 20. When the discount cycle end date is changed to January 10, the discounted cycle fee amount is charged from Jan 10–Jan 20.

Figure 13-18 Example 18

Description of "Figure 13-18 Example 18"