Proration Logic

Last verified with: 10.8.6.0

Overview #

Proration explains how LogiSense Billing handles charges when service activity does not line up perfectly with a full billing cycle.

This guide is intended to answer a practical question: when a package or service starts, changes, or ends in the middle of a billing period, what should you expect the system to do?

In LogiSense Billing, proration mainly affects recurring charges, recurring credits, discounts that follow recurring billing, service state-based pricing, and bucket capacity behavior. Non-recurring charges and transition charges follow their own expected patterns, which are also outlined below.

The Core Rule Set #

The most important behaviors to understand are:

• billing logic is based on whole days,
• time-of-day values do not create partial-day charges,
• start dates are inclusive,
• cancel dates are exclusive,
• and recurring proration is measured against the applicable billing period defined by bill day and frequency.

What this means is:

• if a service starts on July 15, July 15 is billable,
• if a service cancels effective July 24, July 24 is not billable,
• and if a date includes a time like July 15 at 11:00 PM, the system still treats that as July 15 for billing purposes.

Start Dates Are Inclusive #

When a package or service becomes effective on a given date, billing begins on that date.

What this means is:

• the start date counts as a billable day,
• the service does not wait until the following day to begin billing,
• and the first recurring period can begin in the middle of a cycle if that is when service starts.

Example:

• Bill Day: the 1st
• Package effective date: October 4
• Optional service effective date: October 15
• Billing run: November 1

Expected behavior:

• the package can bill from October 4 through October 31,
• the optional service can bill from October 15 through October 31,
• and both charges are aligned to the next normal cycle after that.

Cancel Dates Are Exclusive #

When a package or service has an effective cancel date, billing stops before that date begins.

What this means is:

• the cancel date itself is not charged,
• the last billable day is the day before the cancel date,
• and the final billed amount depends on the final-period charge option that has been configured.

Example:

• Bill Day: the 1st
• Package effective cancel date: October 24
• Optional service effective cancel date: October 15
• Billing run: November 1

Expected behavior:

• the package can bill through October 23,
• the optional service can bill through October 14,
• and neither charge includes the cancel date itself.

Recurring Charges (MRC) #

Recurring charges are where proration is most visible.

When a recurring service starts in the middle of a billing period, LogiSense Billing can create an initial partial period from the effective date to the next billing boundary. When a recurring service ends in the middle of a billing period, the final outcome depends on the configured final-period option.

What this means is:

• a mid-cycle start can create a reduced first recurring charge,
• a mid-cycle cancellation can create a reduced final recurring charge,
• a recurring line can be flagged as prorated on the invoice,
• and recurring credits can also be prorated when previously billed time needs to be reversed.

Example:

• Monthly recurring charge: $100
• Bill Day: the 1st
• Service effective date: October 15
• Billing run: November 1

Expected behavior:

• the first recurring charge covers only October 15 through October 31,
• the amount is based on the billable portion of the full recurring period,
• and later cycles return to the full recurring price once the service is aligned to the standard cycle.

Full-Period Billing #

Some offers are designed to charge a full recurring cycle even when activation happens partway through that cycle.

What this means is:

• the first charge does not have to be reduced just because the service started mid-period,
• and the product can behave as a committed full-cycle offer rather than a day-by-day partial cycle.

This is an important commercial distinction. Not every product is meant to charge only for the remaining days in the first cycle.

Final-Period Options For Recurring Charges #

When a recurring service is cancelled during a billing period, LogiSense Billing supports three different expected outcomes.

Full Final Period Charge #

What this means is:

• the customer is charged for the full recurring period even though cancellation happened before the end of that period.

Example:

• Monthly recurring charge: $100
• Bill Day: the 1st
• Cancel effective date: October 24

Expected behavior:

• the October recurring period is charged in full.

Prorate Final Period Charge #

What this means is:

• the customer is charged only for the billable portion of the final period,
• and the charge stops before the effective cancel date.

Example:

• Monthly recurring charge: $100
• Bill Day: the 1st
• Cancel effective date: October 24

Expected behavior:

• the final recurring charge covers October 1 through October 23 only.

No Final Period Charge #

What this means is:

• once the cancellation falls inside a recurring period, that final recurring period is not billed.

Example:

• Monthly recurring charge: $100
• Bill Day: the 1st
• Cancel effective date: October 24

Expected behavior:

• the final recurring period is not charged.

Non-Recurring Charges (NRC) #

Non-recurring charges do not follow day-based recurring proration in the same way as MRC.

They are event-based charges tied to the relevant effective date.

What this means is:

• the system recognizes the effective date of the one-time event,
• time-of-day is ignored for billing purposes,
• and the non-recurring charge is created for that event date rather than for a reduced multi-day period.

Example:

• Non-recurring activation charge
• Service effective date: November 1 at 8:10 PM

Expected behavior:

• the charge uses November 1 as the event date,
• and it is billed as a one-time charge rather than as a day-prorated recurring line.

Service State Changes #

Proration also applies when a service changes between billable states that have different recurring prices.

What this means is:

• the billing period can be split at the state-change boundary,
• each portion of the period can be billed using the price for that state,
• and a single cycle can contain more than one recurring price outcome.

Example:

• Service is Active from October 1 to October 14
• Service becomes Suspended on October 15
• Active and Suspended are both billable, but at different prices

Expected behavior:

• one portion of the recurring period bills at the Active price,
• the remaining portion bills at the Suspended price,
• and the service does not need to be modeled as two separate products to support this behavior.

Transition Charges #

Transition charges are different from recurring proration.

A transition charge is a one-time charge tied to a service status change or activation transition.

What this means is:

• the system can create a transition charge when the configured transition occurs,
• the transition charge is not calculated as a reduced recurring amount,
• and it is billed as a one-time event associated with the transition date.

Example:

• A service transitions from a non-billable setup state to an active billable state on July 15
• A transition charge is configured for that change

Expected behavior:

• the recurring charge can begin from July 15 under the normal recurring proration rules,
• and a separate one-time transition charge can also be created for the July 15 transition event.

Discounts #

Discounts can follow proration, but not all discounts behave the same way.

LogiSense Billing supports both prorated and non-prorated discount behavior.

What this means is:

• a prorated discount can scale with the billed portion of the recurring period,
• a non-prorated discount can still apply based on its normal business timing,
• and discount behavior can differ between an initial partial period and later full periods.

From a business perspective, this is helpful because promotions do not always need to behave identically.

Example:

• Monthly recurring charge: $100
• Service starts mid-cycle
• Discount: 10% recurring discount

Expected behavior:

• if the discount is configured to follow proration, the discount applies to the partial recurring amount,
• and if the discount is configured as non-prorated, it follows its own discount timing rules rather than automatically scaling by day count.

Recurring Credits #

Proration is also relevant when the system needs to reverse previously billed recurring time.

What this means is:

• a backdated cancellation or correction can generate a recurring credit,
• and that credit can reflect only the portion of the billed period that should be reversed.

This is important because it allows the system to correct prior recurring billing without over-crediting the customer.

Usage Buckets #

Usage buckets use proration differently from recurring charges.

For buckets, proration affects the amount of entitlement or effective capacity available in the period rather than simply creating a smaller recurring charge.

What this means is:

• if a bucket becomes effective partway through the period and bucket proration is enabled, the available bucket quantity can be reduced for that period,
• only usage on or after the bucket’s effective date is counted toward that bucketed entitlement,
• and the customer may receive a partial included allowance rather than the full bucket amount for that first period.

Example:

• Monthly bucket: 10 included units
• Bucket effective date: halfway through the billing period
• Bucket proration: enabled

Expected behavior:

• the customer may receive only a prorated portion of the 10 units for that first period,
• usage before the bucket effective date does not count toward that bucket,
• and overage can begin once the prorated entitlement is exhausted.

How Bill Day Affects Proration #

Proration is always tied back to the customer’s actual billing cycle.

What this means is:

• the same effective date can produce different billed outcomes depending on the bill day and billing frequency,
• monthly, quarterly, and annual offers each have their own full-period reference point,
• and proration is not simply a calendar-month rule.

This is one of the reasons proration is important to understand in the context of the overall billing model rather than as a standalone date rule.

What You Should Expect To See On The Invoice #

From a customer or billing-operations perspective, the most visible results are:

• recurring lines may appear as prorated,
• the billed period shown on the invoice reflects the billable start and stop dates,
• transition charges appear as separate one-time charges when configured,
• non-recurring charges appear as event-based charges,
• and discounts or credits can reflect only the portion of the cycle that was actually billable.

Why This Matters #

Proration is important because it makes billing behavior predictable.

It allows businesses to:

• activate customers on any day,
• keep customers aligned to standard billing cycles,
• support different cancellation policies,
• model lifecycle-based pricing,
• preserve the intended behavior of discounts,
• and manage included entitlements more accurately.

The practical benefit is not just billing flexibility. It is billing behavior that customers, finance teams, and implementation teams can understand and explain with confidence.