How to enable Proration in Subcription?

Proration in Zoho Billing makes sure customers are only charged for the time they’ve actually used a plan when they upgrade, downgrade or change plans partway through a billing cycle.

Why use prorated billing

• Fair charges: customers pay only for what they’ve used.
• Flexible plans: customers can change plans at any time without losing money on the switch.
• Revenue protection: you don’t lose revenue when customers upgrade, add extras, or move between pricing tiers.

How proration works

On an upgrade, Zoho Billing calculates a prorated charge for the remaining days on the new plan and credits the unused days on the old plan, then invoices the difference. On a downgrade, it generates a credit note for the unused portion of the higher-priced plan, which can be applied to a future invoice or refunded.

How to enable proration for a subscription

1. Go to Sales > Subscriptions and click + New, or open an existing subscription.
2. Fill in the subscription details.
3. Click Other Preferences.
4. Enable or disable Generate invoices and credit notes based on prorated usage.