When the first and final periods of a contract line item are partial periods, Billing Central can adjust the final period value to be the residual amount from the first period so that they equal one whole billing period.
To adjust final period values this way, select the Set Final Period to Remainder from First checkbox on the proration policy that you intend to assign to the contract.
This example uses a six month contract to illustrate final period adjustment when using a proration policy with the Actual Days calculation method.
|
Line Start Date |
Line End Date |
Billing Term |
Line Sales Price |
First Billing Period |
Final Billing Period without Adjustment |
Final Billing Period with Adjustment |
|---|---|---|---|---|---|---|
| Mon, Feb 19, 2018 | Sat, Aug 18, 2018 | MB | $100 |
Feb 19 to Feb 28 = 10 days Feb 28 - billing term (MB) = Feb 1 Feb 1 to Feb 28 = 28 days $100 * (10/28) = $35.71 |
Aug 1 to Aug 18 = 18 days Aug 1 + billing term (MB) = Aug 31 Aug 1 to Aug 31 = 31 days $100 * (18/31) = $58.06 |
Sales Price - First Billing Period value $100 - 35.71 = $64.29 |
In this example, the Total Contract Line Value (TCLV) is the sum of:
charge for partial start period + charges for five whole periods (March to July) + charge for partial end period
Therefore:
- Without the final period adjustment, the TCLV is 35.71 + 500 + 58.06 = 593.77
- With the final period adjustment, the TCLV is 35.71 + 500 + 64.29 = 600.00
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