> ## Documentation Index
> Fetch the complete documentation index at: https://alguna.com/docs/llms.txt
> Use this file to discover all available pages before exploring further.
# Proration
> Understand how mid-cycle subscription changes are prorated
# Proration
Proration ensures customers are charged fairly when subscriptions change mid-billing cycle. This guide explains how Alguna calculates prorated amounts for upgrades, downgrades, and other mid-cycle changes.
***
## What Is Proration?
When a subscription changes before the end of a billing period, proration calculates:
* **Credits** for unused time on the old plan
* **Charges** for remaining time on the new plan
**Example:**
```
Billing Period: Jan 1 - Jan 31 (31 days)
Change Date: Jan 16
Old Plan: $100/month
- Days Used: 15
- Credit: $100 × (15/31) = $48.39
New Plan: $200/month
- Days Remaining: 16
- Charge: $200 × (16/31) = $103.23
Net Charge: $103.23 - $48.39 = $54.84
```
***
## Proration Behaviors
| Behavior | Description | Use Case |
| ------------------ | --------------------------------------------- | ---------------------------- |
| **Full Proration** | Credit unused time, charge for remaining time | Standard upgrades/downgrades |
| **No Proration** | No credits or charges until next period | Enterprise contracts |
| **Credit Only** | Credit unused time, no immediate charge | Downgrades |
| **Charge Only** | Charge for new plan, no credit | Promotions |
***
## How It Works in the Dashboard
### When Creating a Subscription Change
1. Navigate to **Subscriptions → \[Subscription]**
2. Click **Edit Subscription** or **Create New Version**
3. Make your changes (upgrade, add product, etc.)
4. Choose the **Effective Date**:
* **Immediate**: Proration calculated for current period
* **End of Period**: No proration (change starts with new period)
5. Review the **Proration Preview** showing:
* Credit amount for unused time
* Charge amount for new items
* Net amount due
6. Publish the change
### Viewing Proration on Invoices
1. Navigate to **Invoices → \[Invoice]**
2. Prorated line items show:
* Original item with credit
* New item with prorated charge
* Date range for each
***
## Proration Examples
### Upgrade Mid-Cycle
Customer upgrades from $100/month to $200/month on day 15 of 30:
| Item | Calculation | Amount |
| ------------------ | --------------- | ----------- |
| Credit for Starter | \$100 × (15/30) | -\$50.00 |
| Charge for Pro | \$200 × (15/30) | +\$100.00 |
| **Net Due** | | **\$50.00** |
### Downgrade Mid-Cycle
Customer downgrades from $200/month to $100/month on day 20 of 30:
| Item | Calculation | Amount |
| ------------------ | --------------- | ------------ |
| Credit for Pro | \$200 × (10/30) | -\$66.67 |
| Charge for Starter | \$100 × (10/30) | +\$33.33 |
| **Net Credit** | | **-\$33.34** |
The credit is applied to the next invoice.
### Add Product Mid-Cycle
Customer adds a \$50/month add-on on day 10 of 30:
| Item | Calculation | Amount |
| --------------- | -------------- | -------- |
| Prorated Add-on | \$50 × (20/30) | +\$33.33 |
***
## Disabling Proration
For specific scenarios, you can disable proration:
1. Navigate to **Subscriptions → \[Subscription]**
2. Click **Edit Subscription**
3. In the proration section, select **No Proration**
4. The change will take effect without any mid-cycle credits or charges
Disabling proration is useful for enterprise contracts or when you want changes to take effect without financial adjustment.
***
## Best Practices
Always review the proration preview before publishing changes.
Let customers know about prorated charges before making changes.
When possible, schedule changes for period end to avoid proration.
Record why proration was disabled for specific customers.
***
## Next Steps
Learn about subscription amendments.
Understand subscription versioning.