Understanding Proration

Seeing proration on your bill can be confusing and frustrating to decipher. 

Here is a breakdown of what those proration charges and credits mean:

When you switch plans in the middle of a billing cycle, you will be credited back a prorated amount of the previous plan for the remaining days of your cycle. At the same time, you will be billed a prorated amount of the new plan for the remaining days of your cycle. This is because you pay for the base plan at the beginning of the cycle before using it.

Your first bill after making this change in the middle of the cycle will show the prorated credit, the prorated charge, and a charge for the base plan you’ve changed to. 

For example, a customer is billed on the 1st of the month for a given base plan. Then, on the 15th of that month, the customer switches to a different base plan, which has its own usage rates for tracking numbers and minutes. 

On the 1st of the next month, their invoice would contain the following:

- A proration credit for a portion of the plan they were initially on.

- A prorated charge for a portion of the plan they changed to.

- A full charge for the base price of the plan they changed to.

Again, we understand proration can be confusing, so if you have any questions, please don’t hesitate to let us know in the comments below!

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