Proration is used to ensure that customers are only billed or granted resources for the
fraction of a billing period that a product was active. Consumption Management uses a proration
engine that performs the calculation and provides accurate billing.
Consumption is prorated when either grants are added or rates are updated between the billing
cycles.
Example
Mid-Cycle Grant Amendments
Scenario
Proration calculation
Result
A customer purchases an anchor plan starting July 20 that grants them 4,000 text
messages per month. The initial child bucket is created with a validity of July 20 to August
19, containing 4,000 texts. On August 3, the customer decided to amend the quote to purchase
an additional quantity of the product.
Instead of granting the complete 4,000 texts for the new purchase, the proration
engine cuts the original transaction's validity and creates a child bucket effective from
August 3 to August 20. The new bucket is only active for 16 days of the billing cycle and
therefore, the system's proration engine calculates a prorated balance of 2,193 text
messages.
When the customer consumes texts between August 3 and August 20, Consumption
Management draws down from a pooled total balance that includes the prorated 2,193
messages.
Mid-Cycle Rate Amendments
Scenario
Proration calculation
Result
A customer is consuming an active plan that’s valid from Jan 1 to Jan 31. In the
middle of a customer’s billing period, a sales rep overrides and amends the negotiated rate
of a resource from $10 to $9.
The proration engine splits the consumption for the different rate durations. Consumed
units logged before Jan 15 are aggregated and rated at the $10 rate, while usage logged
after the amendment date is aggregated separately and rated at the new $9 rate.
Consumption Management generates two separate Liability Summary rows for the split
periods, ensuring the total invoice accurately reflects the prorated mid-cycle rate
change.
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