When a Membership comes out of a freeze, a prorated bill may be generated to bridge the gap between the unfreeze date and the day of the month (or week) that the Membership normally bills on. The point of this bill is to get the Membership back on track so future billing happens on the same day as before the freeze.
The amount of this bill varies between $0 and the normal recurring bill amount depending on how the system calculates what the Client owes or is owed before their next normal billing date.
If the Client owes money, that amount is charged in the prorated bill.
If the Client is owed money (this can happen if the Membership was frozen right after paying for a full billing period), the prorated bill is $0 and the Client receives a credit or discount on their next normal bill.
How the calculation works
Determining what a Client owes or is owed at the end of a freeze is complex, and several factors are considered. In most cases the following calculation is used.
Note: this calculation is not always used. A more complex algorithm runs in certain scenarios involving multiple back-to-back freezes (generally not recommended) or older bills that don't align correctly.
The variables used in the calculation:
Billing period length (in days)
Billing period cost (the actual recurring bill amount, not including discounts)
Number of active days (the total active days in the bill before and the bill after the freeze)
The formula:
Cost per day = Billing period cost ÷ Billing period length
Days owed = Number of active days − Billing period length
Amount owed = Days owed × Cost per day
Note: for monthly billing, the system always uses 30 days as the length of the month. Billing every 1 month uses 30 days; billing every 2 months uses 60 days, and so on. This keeps proration consistent across months that have different numbers of days.
Example 1: Client owes money
Membership bills $150 every month on the 1st. Freeze occurs from March 10 to April 3.
Bill before freeze: service dates March 1 – March 9 = 9 active days
Bill after freeze: service dates April 3 – April 30 = 28 active days
Calculation:
Billing period length: 30 days
Billing period cost: $150
Number of active days: 9 + 28 = 37
Cost per day = $150 ÷ 30 = $5 per day
Days owed = 37 − 30 = 7 days
Amount owed = 7 × $5 = $35
The prorated bill (service dates April 3 – April 30) is $35.
Example 2: Client is owed money
Membership bills $150 every month on the 1st. Freeze occurs from March 10 to March 25.
Bill before freeze: service dates March 1 – March 9 = 9 active days
Bill after freeze: service dates March 25 – March 31 = 7 active days
Calculation:
Billing period length: 30 days
Billing period cost: $150
Number of active days: 9 + 7 = 16
Cost per day = $150 ÷ 30 = $5 per day
Days owed = 16 − 30 = −14 days
Amount owed = −14 × $5 = −$70
The prorated bill (service dates March 25 – March 31) is $0, and the April 1 bill receives a $70 credit/discount.
Things to know
Bill proration only applies when your company uses the Proration strategy. If you're on the Date Shift strategy, bills move forward by the number of frozen days instead.
You can change between strategies at any time from Company > Settings > Freeze Settings.
Perk regeneration follows its own logic per strategy. See Membership Freeze Perk Regeneration for that side of the calculation.
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