Defining prorating rules

Prorating means allocating or assigning an amount to an activity or product that is proportional to some base (determined by a formula or procedure). Prorating is only applied to organizations that bill on an annual or fixed-term basis, as opposed to an anniversary or rotating term basis.

Note: The number of months used by the prorate rule for an individual is Thru Date to Join Date. Prorate only applies if the Join Date is populated before running the billing.

The three options available to define prorating rules include the following:

  • Do Not Prorate – Same dues regardless of when customer joins.
  • Standard Prorating – Prorating for the current year (depends on the billing interval). For example, if a customer joins in month 7 and annual dues are $200, the calculated dues would be 6/12 of the total dues, or $100.
  • Special Prorating – User-defined prorating rules, depending upon the needs of the organization. If the Special Prorating is enabled, proration rules are created on the Prorating window. Prorating rules can be used for unique situations that require more than simple monthly prorating within the first year, such as:
    • Quarterly or semi-annual prorating
    • Second-year prorating (receive x% off of next year's dues)
    • Advancing the membership term to the end of the next year
    • Multiple prorating rules for your organization.
  • Note: When using a prorate rule, don’t forget to select the prorate rule for the product in the Prorate drop-down.

If a former member rejoins your organization (that is, they already have an existing join date in the system that is earlier than the beginning of the current fixed-term) through the online join page, one of two scenarios can occur:

  • If the contact is an active member, the rejoin is processed as a renewal and prorating does not apply. The contact pays the full membership fee for the fixed-term.
  • If the contact is not an active member, the join date resets to the current system date and prorating is applied. If your organization needs to maintain a record of the original join date, you can create a user-defined field where a staff members can enter the date before processing the rejoin.

If you use Start Date Control (go to Settings > Billing > Configure billing options) and enable Apply to New Members and Advance Start Month as of, these values affect the month that is used as the first prorate month. For example, if the Advance Start Month as of field is set to 15, new customers with a Join Date of August 15 will have their billing Begin Date set to 09/01. For more information, see Configuring billing options.