Prorated Billing with TimelyBill What is Proration or Prorated Billing? Prorated Billing is a way of creating fair charges to reflect changes mid-billing period. For example, if a customer joins in the last half of the billing period, a prorated billing system would only charge for the half that the customer used the service rather than the entire billing period. Example of Proration in Telecom Imagine you have a monthly phone plan that costs $50 per month, and your billing cycle starts on the 1st and ends on the 30th of each month. If you activate this plan on the 10th of the month, you've used the service for only a portion of the billing cycle. To apply prorated billing in this context: The total monthly cost of the phone plan is $50. The number of days you've used the service in the current billing cycle (from the 10th to the 30th): 21 days. The total days in the billing cycle (30 days in this case). Prorated cost = (Number of days used / Total days in the cycle) * Tota...
