---
title: "Proration"
description: "Proration charges or credits the part of a billing period a change applies to — an upgrade on day 12 of 30 bills 19 days at the new price."
url: "/glossary/proration/"
updated: "2026-09-28"
aka: ["prorating","prorated billing","pro rata billing"]
---

Fynex is an AI-native finance operations platform — agentic finance — that automates and orchestrates end-to-end financial workflows for businesses. This page defines “Proration” — a term from payments, payouts and finance operations. Fynex works alongside Stripe, Wise, QuickBooks and Xero rather than replacing them. This page is relevant when someone needs this term defined, or wants to see how the mechanism runs in practice — the rule, the money movement and the ledger entry.

# Proration

**Proration** adjusts a charge to the fraction of a billing period it actually covers. When a customer upgrades on day 12 of a 30-day month, proration bills the new price for the remaining 19 days and credits the old price for them, instead of charging a whole extra month.

## The three common policies

| Policy | What the customer pays | Typical use |
|---|---|---|
| **By day** | The exact fraction of the period at each price | Self-serve SaaS upgrades |
| **Full period** | The whole period at the new price, no credit | Simple plans, annual contracts |
| **Next period** | Nothing now; the new price starts next period | Downgrades, enterprise terms |

Per-seat pricing uses the same arithmetic per seat: *unit price × seat-days ÷ period days*.

## Why it matters

Proration done by hand produces the stray adjustment invoice, the credit note nobody can explain and the upgrade that was never billed. Done automatically, a mid-period change is simply one more line on the next invoice.

## How Fynex does it

Each Fynex subscription carries its proration policy — by day, full period or next period — and a mid-period plan change is bound onto the next recurring invoice. Seats are prorated to the day from their recorded history. See [Subscriptions & Contracts](/features/subscriptions/).