Prorate Credits

credit proration for subscriptions involves issuing prorated credits for partial terms, adjusting charges, or providing credits to subscribers based on the remaining time in a billing cycle when changes are made to their subscription plan this process ensures subscribers are billed accurately for the portion of the subscription they have used or are entitled to it is common for subscription based businesses to prorate credits for subscriptions with nue, you can easily prorate credits issued to a customer if they subscribe to partial terms of your services, or make changes to their credit burndown or commit burndown subscriptions before the billing cycle ends how credit proration works system setting required you must enable the following system setting at the organization level settings > credits > enable credit proration for partial periods if credit proration is not enabled, when you create a credit burndown or commit burndown subscription, credits will be issued for each term, and you can only modify your subscription for the entire term for instance, if you have a 12 month credit burndown subscription and wish to reduce the term, you can only do so by ending it at the end of any month with credit proration enabled, you are allowed to create a credit burndown or commit burndown subscription with partial terms (e g , 1 5 years or 11 5 months) you can also make mid term changes to a credit burndown subscription, and the unused credits will be prorated and refunded in the next billing cycle the prorated amount of credits will be calculated based on the date that the subscription's term ended and the usage of those credits issued within the term scenario 1 prorate credits for partial terms issue new credits for a partial term a customer has purchased a quarterly based credit burndown subscription from 02/15/2026 to 12/31/2026 when the order is activated, the credits issued for the last term will be prorated automatically update or renew credits for a partial term later, if the customer wishes to extend the subscription to a full year, they can adjust the subscription end date to 02/14/2027, and additional prorated credits will be generated accordingly scenario 2 mid term change now let's take a look at another scenario a customer has bought a yearly based credit burndown subscription for $2,400 this subscription includes 240 credits at a unit price of $10, with an average of 20 credits per month the subscription starts on 01/01/2023 and ends on 12/31/2023 however, on 10/01/2023, the customer decides to co term (cancel or reduce the term) the subscription and receive a refund for any unused credits within the canceled 3 months prorated credits refer to the portion of credits that remain unused in the canceled subscription period in this case, it will be the amount of unused credits between 10/01/2023 and 12/31/2023 there are various scenarios where the use of credits may differ based on consumption scenario 1 150 credits have been consumed out of the total of 240, 90 credit balance left prorated term prorated credits refund / charge 3 months / 12 months = 0 25 year 0 25 x 240 = 60 credits $10 x 60 = $600 scenario 2 200 credits have been consumed out of the total of 240, 40 credit balance left prorated term prorated credits refund / charge 3 months / 12 months = 0 25 year 40 credits (the credit balance is smaller than 60) $10 x 40 = $400 scenario 3 250 credits have been consumed, 10 overage out of the total of 240, 0 credit balance left prorated term prorated credits refund / charge 3 months / 12 months = 0 25 year 0 credits (no credit balance left) $10 x 10 = $ 100 (additional charge for overage) let's go through the scenarios mentioned above in nue create annual credit burndown subscription set up a credit burndown product 'credit annual package' with the standard price of $10 / credit create an order in nue on salesforce for the customer and activate it new order jpg the customer now has 240 credits in their balance initial credit balance jpg prorate credits for mid term changes in the customer lifecycle manager, when you reduce the term of a credit burndown subscription by making a term reduce, co term, or subscription cancellation change, the unused credits issued will be prorated and canceled for partial terms accordingly, if the ' enable credit proration for partial periods ' setting is turned on reduce the term of subscription 'credit annual package' for 3 months after checking out the changes to a change order, the prorated credits will be calculated in the change line and the total amount of the change order will be determined by the prorated credits change order jpg now if you go to the customer lifecycle manager, you can see the prorated credits are deducted from the customer's credit balance credit balance changed jpg refund for the prorated credits since the customer has already paid for all the issued credits, the prorated credits will be refunded in the next billing cycle a negative invoice will be generated in the next billing cycle after the billing schedule job is executed, then the customer will get the refund accordingly rufund invoice jpg if the customer has overage usage of the credits, the prorated credits will be zero, and they won't receive a negative invoice instead, they will be charged for the additional amount in a new invoice that reflects the overage usage additional charge invoice jpg for more information about how credit burndown works, please refer to docid 5wcdjhqecjb81 gcfeld