In this article, you will learn how to adjust the pro-rata calculation for rates with the billing type "fixed due date" that are signed at the end of the month. This applies particularly to rates with a due date on the 29th, 30th, or 31st of a month. You will also learn how freeze periods affect the due date in these cases and what validation rules apply.
Topics in this article:
- Enable fixed due date billing for month-end
- Notification when creating a contract at the end of the month
- Freeze periods apply only in full mode
- Impact on the contract's due date
Fast lane:
- Navigate to Settings / Membership Management / Rates and open the desired rate.
- Ensure that the option Allow fixed due date billing at the end of the month is enabled.
- When creating a contract at the end of a month, a notification about the fixed due date appears.
- Freeze periods for such rates are applied exclusively in full pro-rata calculation mode.
- Once a freeze period is added, the contract's due date is adjusted accordingly.
Enable fixed due date billing for month-end
In the rate configuration, you can enable an option that adjusts the due date for contracts starting on the 29th, 30th, or 31st of a month. This ensures the due date remains aligned with the end of the month where applicable.
How to enable this option:
- Open an existing rate or create a new one under Settings / Membership Management / Rates.
- Go to Edit Payment Method / Advanced Settings.
- Ensure that the billing type Fixed due date (absolute) is selected.
- Enable Allow fixed due date billing at the end of the month.
Notification when creating a contract at the end of the month
When a new contract with a start date on the 29th, 30th, or 31st of a month is created, the following message appears in the software's backend:
"The contract is created with a fixed due date at the end of the month (29th, 30th, 31st). Freeze periods for this contract will be applied in full mode and will shift the due date."
This message is a reminder that freeze periods will automatically change the contract’s due date.
Freeze periods apply only in full mode
For contracts with a payment start date at the end of the month, freeze periods can only be applied in full pro-rata calculation mode.
This means:
- Partial calculation of freeze periods is not possible.
- Freeze periods will shift the contract’s due date accordingly.
This rule is enforced automatically when configuring a freeze period. If a different mode is selected, a validation message will display a corresponding notification.
Impact on the contract's due date
Once a freeze period is applied, the contract’s regular due date is postponed by the duration of the freeze period. This means:
- A contract with a due date at the end of the month will remain tied to the end of the month.
- If a freeze period of, for example, one month is applied, the next due date will be postponed by one month.
- This happens automatically, requiring no manual adjustments.
With these adjustments, contracts signed at the end of the month are calculated correctly, ensuring that freeze periods are applied without unexpected effects.