A typical usage of pro rata charges is during the on-boarding process of a new customer, where you are looking to get the first month's fees charged, as well as synchronising their charges to your monthly billing cycle. In typical cases, any charges created mid-month would start from the beginning of the following month, but in a pro rata charge you would also want to include the additional extra days from the current month so any recurring fees can include additional billing time.
There are two possible scenarios which are covered by pro rata charges:
Charging at the beginning of the next billing cycle
In this example, a customer started their service on the 15th of October, but you don't want to invoice them until the 1st of November as part of your normal monthly billing cycle. You create a Recurring Monthly charge, and set the charge to start on the 1st of November. You set your "First charge amount starts from" to the 15th October.
On the 1st of November, Billingbooth will create the charge for the first time, and the charge period will be 15th October through to the 30th November. The additional days on the charge period will be charged on a daily rate basis, meaning that for example a £10.00 monthly fee will actually cost £15.33 to cover the additional 16 days in our example.
Charging straight away so customer can be invoiced immediately
In this scenario, a customer has started service on the 15th October, and you are looking to get them synchronised with the monthly billing cycle, but want to invoice their initial service charge straight away. In this instance, you create a new Recurring Monthly charge, and set it to start on the 1st October, but set the "First charge amount starts from" field to the 15th October.
Straight away this charge is created, ready to be invoiced, but the charge period is reduced from the 15th October until the end of the month. The charge amount will also be reduced to the contracted period, so for example a charge of £10.00 will be reduced to £5.33 for the first charge. Come the 1st of November, the next month's charges will get added in as per regular billing, and the amount charge returns to it's usual amount (£10.00 in our example).