Thread: Pro Rata

Take solace in the fact in the fact that, if you paid by debit card, you probably cost them money .

Seriously... lots of companies prefer to pay on a fixed date. Lots of companies like to do their repeat billing run once a month rather than every day. I can certainly understand why it happens but when you're dealing with such tiny amounts it doesn't make so much sense.

Enjoy being a secret agent for the rest of the month

Nice pun on your second word too Adam :P

Pro rata is too much of a headache imo, I prefer cashflow throughout the month

It shouldn't of billed like that, I don't know how pro-rata got ticked. Anyway - Unticked now

We used to pro-rata a lot of monthly licences for customers. Made things much easier for the customer only paying one bill a month and us as we did monthly billing all on one day and disablements on all on one day.

However we pro-rata based on amount. for 0.07 this would have been rolled into the next monthly bill. Generally if it was greater less than £10 it was rolled into the next billing cycle.

Having said that we then started to struggle with the fact that loads of tickets would be raised on te same day with queries over billing or licence disablements. As such the pro-rata was scrapped and customer payments spread across the month.

So pro-rata has pros and cons.

We tend to roll up any partial amount in to the next monthly billing run - although we only tend to bill larger amounts on a fixed day (1st day of the month) to make it easier for customers and their budgeting etc. so that generally means servers or larger VPS purchases. Any virtual hosting gets billing on aniversary.

It's useful to bill all RackSpace/Colo on a fixed day, as (more-or-less) we have to pay for all our suites in the first few days of each month - so pro-rata'd to the 1st is simply easier to manage

What happens when clients buy multiple services throughout the month? We do pro-rata invoicing as it is the neatest way of doing it, but we do have a minimum invoice value at which point we don't bother sending it (£1) - and tag it on to the next month automatically. For larger customers we have a minimum time threshold, e.g. they won't get invoiced unless it is at least 7 days since the last time. Makes sense for clients ordering small things every day, as some of ours do.