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Proration Types for Partial Billing Periods
Salesforce Billing uses proration to calculate balances for invoice lines that cover partial billing periods. While the invoice line doesn’t have a prorate multiplier field, Salesforce Billing still calculates one behind the scenes and multiplies it by the order product’s billable unit price to determine the invoice line’s balance. The Salesforce Billing invoice package setting Proration Type offers several options for the method used to calculate the prorate multiplier. (Salesforce Billing Managed Package)
Based on your billing period date ranges, different Proration Type values cause different invoice line balances for the same billing period. Let’s look at a few examples. Your order product has the following values:
- Billable Unit Price: $1000
- Billing Type: Arrears
- Billing Frequency: Monthly
- Start Date: 05/23/2019
- End Date: 09/30/2019
- Next Billing Date: 06/01/2019
The resulting invoice line has a 9-day period that starts on 05/23/19 and ends on 05/31/19. Its subtotal will vary based on the package’s Proration Type value.
| Proration Type | Description | Invoice Line Balance Calculation |
|---|---|---|
| Calendar Days | Divide the number of invoiced days in the month by the total number of days in the month. | The invoice line falls in May, which has 31 days. We use (9 ÷ 31) and multiply that by the order product’s billable unit price of $1000 to get $290.32. |
| 30 Days | Divide the number of invoiced days in the month by 30. | (9 ÷ 30) * $1000 = $300 |
| Monthly (CPQ Formula) | Divide the number of invoiced days in the month by (365/12). | (9 ÷ (365 ÷ 12)) * $1000 = $295.89 |
Salesforce Billing recommends choosing a proration type based on your organization’s billing and invoicing needs.
