Configure Quantity Proration for Component Updates

Updating a component quantity in Advanced Billing affects how charges appear on an Invoice. It is important to understand how Update Quantity differs from Record Usage, especially when working with quantity-based and metered components.

This article applies to Advanced Billing’s Component Allocations functionality. To charge a Customer for a component, you must report the component’s quantity or usage to Advanced Billing. For more information, see Related Topic: Component Allocations Overview.

Understand Update Quantity vs Record Usage

• Update Quantity applies to quantity-based components.
• Record Usage applies only to metered components.
• Metered components reset to zero at the beginning of each billing period.

Example of updating a quantity-based component

How to Update Quantity and Proration

When you update the quantity of a quantity-based component using the Update Quantity action, you can choose to charge a prorated amount by selecting the Charge the prorated amount of the difference in quantity option.

The following formula applies when proration is enabled:

Delta Quantity × Price × % of Period

Where:

• Delta Quantity = New Quantity − Old Quantity
• % of Period = (Current Timestamp − Start of Period) ÷ Original Period Length

How Proration Appears on the Invoice

On the Invoice:

• Quantity = Delta Quantity × % of Period
• Unit Price = Price

Proration Example

Given:

• The Update Quantity action changes the quantity from 20 to 25.
• The change occurs 49.9% into the billing period.
• The price per unit is $20.

Result:

The Invoice displays:

• Quantity = 2.495 (5 × 49.9%)
• Unit Price = $20
• Total = $49.90 ($20 × 2.495)

Display Prorated Price Instead of Prorated Quantity

By default, proration adjusts the quantity on the Invoice Line Item. To display a prorated Unit Price instead, complete the following steps:

1. Navigate to Config > Settings > Invoices.
2. Under Invoice Customization > Line Item Elements, select Display of Prorated Price Invoice Lines.

When this setting is enabled, the proration percentage applies to the Unit Price instead of the quantity.

• Quantity = Delta Quantity
• Unit Price = Price × % of Period

Using the same example:

• Quantity = 5 (25 − 20)
• Unit Price = $9.98 ($20 × 49.9%)
• Total = $49.90 (5 × $9.98)

In both scenarios, the total charge on the Invoice is $49.90. Only the presentation of the Invoice Line Item differs.