Prorations

When a subscription period is shorter than a full billing interval, Yorlet can prorate the charge so the customer only pays for the days they are billed for. You control this when you update a subscription, and you can see the result in the invoice Preview before you save.

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When prorations apply

Prorations apply when the invoice period is shorter than the subscription’s usual interval. Common cases include:

• You change the Billing anchor so the next invoice covers only part of a period.
• A subscription starts mid-period.
• A subscription ends or is cancelled before the period would normally finish.
• The final period before an end date is shorter than a full interval.

Prorations do not apply to:

• One-off invoice items
• Items where Create prorations is turned off
• Periods that are a full interval (or longer)
• Differences of a single day, which are ignored to avoid tiny adjustments

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Control prorations when you update

There are two controls, and they work together.

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Create prorations on an item

When you add or edit a subscription item, Create prorations is on by default. Leave it on if this item should be adjusted on a short period. Turn it off to always charge the full amount for that item, even when the period is shorter than usual.

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Prorate changes on the subscription

When you set a Billing anchor, Prorate changes appears under Billing cycle settings. It is on by default.

• On: the next invoice is prorated, so the customer pays for the days in that period.
• Off: the next invoice charges the full item amounts, even if the period is shorter.

Turning Prorate changes off applies to the next invoice as a whole. After that invoice is generated, later invoices return to creating prorations unless you change the setting again.

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Reset billing cycle

Reset billing cycle changes the dates of the next invoice. It does not turn prorations on or off — use Prorate changes for that.

• Off: only the end of the next period moves to the billing anchor. The next invoice is shorter, so Prorate changes will usually reduce the amount.
• On: the next invoice starts on the billing anchor and covers a full interval. A full period is not prorated.

For example, a £1,000 monthly subscription that bills on the 1st. You set the billing anchor to the 15th:

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How the amount is calculated

Yorlet works out a daily rate from the full interval, then charges for the days in the actual period.

1. Count the days in a full interval from the period start (for example, 1 June to 1 July is 30 days).
2. Divide the item amount by those days to get a daily rate.
3. Charge the daily rate for each day in the actual period.

The unused days are taken off the line item. The reduction cannot be more than the original amount.

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Example

A £1,000 monthly item bills from 15 January to 15 February 2024 — 31 days. The daily rate is £1,000 ÷ 31 = £32.26. If that invoice is shortened to end on 30 January (15 days):

• Unused days: 31 − 15 = 16
• Amount taken off: £32.26 × 16 = £516.16
• Amount charged: £483.84

If it instead ends on 5 February (21 days):

• Unused days: 10
• Amount taken off: £322.60
• Amount charged: £677.40

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Cancellation

When you cancel a subscription, you can issue a credit note for unused time on the latest invoice. That credit uses the same daily-rate calculation as invoice prorations. Choose No credit note if you do not want to credit the unused portion.