Subscription Billing | Proration & Plan Changes
Mid-cycle changes, charged to the day.
Upgrade, downgrade or change quantity mid-cycle and the engine prorates the difference to the day, credits the unused portion of the old plan and rolls the net into the next invoice. The proration rule is configurable and applied the same way every time.
What the system does
Capability, input, output.
| Capability | Input | Output |
|---|---|---|
| Plan upgrade | New plan, effective date | Prorated charge for the remainder of the cycle on the next invoice |
| Plan downgrade | New plan, effective date | Prorated credit for the unused portion of the old plan |
| Quantity change | New seat or unit count, effective date | Prorated delta charge or credit rolled into the next invoice |
| Proration behavior | Configurable rule per product or plan | Consistent calculation applied the same way on every change |
| Entitlement update | Plan or add-on change | Access limits flip immediately on the change, not at cycle end |
| Add-on changes | Add or remove an add-on mid-cycle | Prorated charge or credit on the next billing cycle invoice |
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Plan upgrade
- Input
- New plan, effective date
- Output
- Prorated charge for the remainder of the cycle on the next invoice
-
Plan downgrade
- Input
- New plan, effective date
- Output
- Prorated credit for the unused portion of the old plan
-
Quantity change
- Input
- New seat or unit count, effective date
- Output
- Prorated delta charge or credit rolled into the next invoice
-
Proration behavior
- Input
- Configurable rule per product or plan
- Output
- Consistent calculation applied the same way on every change
-
Entitlement update
- Input
- Plan or add-on change
- Output
- Access limits flip immediately on the change, not at cycle end
-
Add-on changes
- Input
- Add or remove an add-on mid-cycle
- Output
- Prorated charge or credit on the next billing cycle invoice
Standards + connections
Proration wired to billing, receivables and the books.
A prorated credit or charge is not a standalone adjustment. It posts to receivables as a real line on a real invoice, tax is computed by the ledger, and any deferred revenue re-spreads on the recognition schedule, so one plan change updates billing, cash and the books at once.
Regulations we work within
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AR is the system of record
Prorated adjustments land on the next billing cycle invoice in receivables. Billing keeps the link, not a separate copy of the amount.
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IFRS 15 / Ind-AS 115
Upgrades and downgrades re-spread the recognition schedule automatically. Deferred and recognised revenue post on the correct period.
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Audit trail
Every plan change is logged with user, time, old plan, new plan and the proration amounts, end to end.
Connects to
- Accounts Receivable Prorated lines on the next cycle invoice
- Subscription Management Entitlements flip on the change event
- Pricing & Plans Proration rules configured in the catalog
- Accounting Recognition re-spread on upgrade or downgrade
Proration FAQ
What buyers ask.
How does the engine calculate a prorated charge?
When a plan changes mid-cycle the engine computes the number of days remaining in the cycle, divides the new plan price by the total days in the cycle, and multiplies by the days remaining. The equivalent credit for the unused portion of the old plan is calculated the same way. Both amounts roll into the next invoice as separate lines.
Can we control how proration behaves for different products?
Yes. ProrationBehavior is configurable at the product or plan level. You can choose immediate proration, proration at the next renewal, or no proration for specific plans. The rule is set once in the catalog and applied consistently on every change, so there are no one-off calculations.
Do entitlements update immediately or at the end of the billing cycle?
Entitlements update immediately when the plan changes. Feature access and usage limits flip in the same step as the plan change event. Customers on an upgraded plan get the new limits at once, and customers who downgrade lose the higher limits at the same moment.
How are add-on and seat changes handled?
Add-on additions, removals and seat count changes follow the same proration logic as plan swaps. The engine prorates the delta to the day, posts a credit or charge on the next invoice, and updates entitlements immediately. A subscription can mix a base plan change and an add-on change in the same operation.
More in Subscription Billing
Related features
Subscription Management
Trials, upgrades, downgrades, pauses, add-ons and cancellations on one timeline, with entitlements that update the moment a plan changes.
See Subscription ManagementPricing & Plans
Product families, plans, add-ons, price tiers and entitlements configured in the catalog, not coded into your application.
See Pricing & PlansRecurring Billing
Monthly, quarterly, annual or custom cycles that renew on schedule and generate the next invoice.
See Recurring Billing
See a mid-cycle change post to the invoice and the books.
Spin up a test subscription, upgrade or downgrade it mid-cycle, and watch the prorated charge, the credit and the updated entitlements land on the next invoice together.