Prorated billing | Zoho Billing

Expertly handle proration and bill fairly

Managing mid-cycle subscription changes can be a real hassle, and error-prone when done manually. With Zoho Billing's proration mechanism, you can rest assured that your customers are fairly billed for exactly the number of days they have used your product.

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How proration works in
Zoho Billing

When a subscription plan is upgraded or downgraded, or quantities are added or removed, proration kicks in to ensure proper billing.

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Basic to Premium plan upgrade | Zoho Billing

Premium to Basic plan downgrade | Zoho Billing

Customer upgrading from Basic plan ($50/month) to Premium plan ($100/month).

Purchase Date:

Upgrade Date:

Prorated calculation: Invoice and Credit note:

Zoho Billing calculates Premium plan cost from switch date to next billing date
([ $100/31 ] * 16 = $51.61).

Invoice generated for Premium plan upgrade amount ($51.61).

Simultaneously, unused Basic plan amount is calculated
([ $50/31 ] * 16 = $25.81).

Credit note issued for unused Basic plan portion ($25.81).

Invoice and Credit note:

Invoice generated for Premium plan upgrade amount ($51.61).

Credit note issued for unused Basic plan portion ($25.81).

Final balance:

Credit note offsets the invoice, resulting in a balance of $25.80 ($51.61 - $25.81).

Amount charged:

In this case, the customer incurs a charge of $25.80 for the plan upgrade.

Customer downgrades from Premium plan ($100/month) to Basic plan ($50/month).

Purchase Date:

Downgrade date:

Prorated calculation: Invoice and Credit note:

Basic plan amount is prorated from switch date to next billing date
([ $50/31 ] * 16 = $25.81).

Credit note is applied to invoice, balancing it to 0.

Unused Premium plan amount is calculated ([ $100/31 ] * 16 = $51.61), resulting in a credit note.

Credit note is raised for the remaining balance for $25.80 ( $51.61 - $25.81 ).

Invoice and Credit note:

Invoice generated for Premium plan upgrade amount ($51.61).

Credit note is raised for the remaining balance for $25.80 ( $51.61 - $25.81 ).

No charge to customer:

In this case, no amount is charged to the customer.
Credit note with a $25.80 balance applied to the next invoice on Dec 1, 2023.

ORRefund Option:

Excess credits of $25.80 can be refunded immediately using the Refund option.

Customizable proration options

Aside from mid-cycle plan changes, Zoho Billing goes a step further to accommodate usage-based, decimal measurements, and specific rounding preferences. Automatically generate invoices and credit notes for upgrades and downgrades. You can even toggle proration at the subscription level when setting up new subscriptions.

See what customers have to say about Zoho Billing

I was looking for a no-brainer service to handle recurring billing for Artsper Zoho Billing was the perfect fit—it was easy to configure without any technical skills. We now have hundreds of customers whom we charge on a monthly subscription basis.

Hugo Mulliez

Founder, Artsper

We operate in 10+ countries spread across four continents. Zoho Billing takes care of our recurring billing so seamlessly that we no longer consider billing a challenge while expanding to new markets!

Gilles Groven

Product Manager, UENI

Expertly handle proration and bill fairly

How proration works in
Zoho Billing

Customizable proration options

Prorate flat discount coupons

See what customers have to say about Zoho Billing

a seamless subscription experience

What's next

Billing Management

Advanced Subscription Management

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Expertly handle proration and bill fairly

How proration works in Zoho Billing

Customizable proration options

Prorate flat discount coupons

See what customers have to say about Zoho Billing

a seamless subscription experience

What's next

Sridhar Vembu

CEO, Zoho Corporation

Schedule a demo and get your questions answered by our product experts

How proration works in
Zoho Billing