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Billing in arrears and prorated plan changes

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bretwalker

25 Apr, 2011 02:50 PM

I like that CG offers billing in arrears, but I was wondering why it's not possible to continue to use arrears billing when prorating plan changes.

Unless I'm misreading the options, I can either:
1) Charge a customer a new rate at the end of their billing period (staying with arrears)
2) Charge a customer a prorated amount and bill them immediately (advance billing)

It seems like it's not possible to offer "fair" (prorated) billing while using in arrears billing.

I think customers today expect prorated billing since it's the easiest to understand. The math may not be, but the concept is (I'm only charged for services I receive and only for as long as I receive them).

In arrears billing is appealing to me due to the limitation in liability, but I just can't see making my customers risk paying for something they didn't receive (as they would if they switched from a $10 to a $20 plan the day before their billing cycle ended).
And from a financial perspective, I allow some customers to be billed in arrears and others in advance.

I think another option for transitioning customers should be offered:
Customer is billed on the next billing date for a prorated amount of their original plan plus a prorated amount of their new plan.

I understand there are edge cases that complicate this (customer switches plans 10 times in a billing period), but I think it's worth offering. These situations are, after all, why we outsource billing to CG, rather than trying to build an in-house solution.

1. 1 Posted by bretwalker on 25 Apr, 2011 02:59 PM

   

   Another option: using the example from the Pricing Plan Basics KB article, I could even see billing $13.33 at the time of the plan change (for services rendered) and resetting the billing period to start from the time of the change, billing in arrears at the new plan's rate.

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2. Support Staff 2 Posted by Marc Guyer on 25 Apr, 2011 09:56 PM

   

   Hi! -- Thanks very much for the suggestions!

   You can do this fairly easily via the API. Creative use of custom credits and changing the billing date can realize some powerful flexibility in the system.

   To achieve the behavior in your comment #2:

   1. Issue a custom credit in the amount of the "unused" service.
   2. Change the bill date of the current invoice to 'now' -- this settles the current invoice immediately and starts a new period.
   3. Change the pricing plan to the plan chosen by the customer.

   If step (2) fails (declined payment, for example) you'll probably want to remove the custom credit from step (1).

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3. Dean closed this discussion on 16 Jan, 2013 04:49 PM.