Understanding Proration
When you make changes to your subscription during a billing cycle, Notehouse uses prorated billing to ensure you’re only charged for the time those changes are active.
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How does proration work?
When a change is made mid-cycle, we calculate the cost for the remaining days in the current billing period. You may see a prorated charge and, in some cases, a credit for unused time on your previous plan. Your regular full monthly charge for the updated number of users will then begin on your next billing date.
Example
In this example, the user had a monthly subscription and went from 1 user to 2.
- 1 user = $14/month
- 2 users = $28/month
If your billing cycle runs from February 4 to March 4 and a change is made on January 22:
- The remaining time in the current billing cycle is January 22 – February 4.
- The prorated cost for that remaining time is $6.17 per user.
Your invoice would then show:
Charge for the updated plan (2 users)
- 2 users × $6.17 = $12.34
Credit for unused time on the previous plan (1 user)
- 1 user × $6.17 = $6.17 credit
In this example, the net prorated difference is $6.17 for the remainder of the billing cycle, thus the final invoice would be $28 + $6.17 = $34.17.
Why does Notehouse do this?
Previously, changes made mid-cycle would not be reflected until the following month. Prorated billing ensures charges are accurate and aligned with actual usage, down to the exact day for full transparency.
For any questions, reach out to us at support@getnotehouse.com.