Introduction
This article describes how Prorata works and how it is calculated.
- This article will be helpful to PG Champion, Administrator, Finance & Accounting, Club Manager and Club Owner.
This article is for advanced system users only!
What is Prorata?
Prorata is a payment issued by a club member for the period of time other than the first or the last full Payment Interval. The club member can pay the Prorata at the beginning, or at the end of their Commitment Period.
I.e. assuming that the Contract is paid monthly and the first full Payment Interval starts on April 1st., when a club member signs up to the club and starts the Contract on March 12, their Prorata period will last from March 12 till March 31.
It can also be set up when the Contract is frozen.
Prorata applies to fixed interval billing where all members are charged on the same date it is not compatible with daily billing.
How is Prorata calcutaled?
The Prorata amount is calculated by dividing the Membership Fee by the number of days in a month. The result is multiplied by the number of days:
- remaining from the Contract start date till the beginning of the first full Payment Interval - in case of Contract Start Prorata.
- remaining from the end of the last full Payment Interval till the Contract End Date - in case of Contract End Prorata.
Before you start
Make sure you have the right employee permissions set for your role.
Instruction
How to set up Contract Start Prorata?
- Go to the PGM -> Sale -> Memberships -> Payment Plans.
- Select the existing Payment Plan or create a new one.
- In the Settings field, pay attention to the following options:
- First payment on sign up date - tick this checkbox if you want to charge your member with Prorata on the sign up date.
- Payment interval occurs on contract start day (no prorata) - keep this checkbox unticked if you want to allow for any kind of Prorata on the Contract. Otherwise, the Payment Interval will start on the Contract Start Date.
By default, the system counts the Prorata, which means that the first Payment Interval starts on the first day of the next month.
- Payment interval occurs on contract selected day - here, you can choose the day of the month when the Payment Interval starts when you create a Contract for a given member.
-
Prorata type - select one of the following options:
- Default value - it means daily
- 100% Membership Fee - it means that the amount a member has to pay between the Contract Start Date and the start of the first full Payment Interval will always be the same, irrespective of the number of days in the Prorata period.
- Daily - it means that the system divides the Membership Fee into days and counts the amount a member has to pay between the Contract Start Date and the start of the first full Payment Interval.
In this option, the start of the Commitment Period is the same as the date of the first full Payment Interval charge.
Example
Assuming a Contract starts on March 12th, and the Payment Interval starts on April 1st., the Prorata for the month of March is counted according to the following rule:
1. Divide the Membership Fee by the number of days in March. This way, you will receive a Daily Membership Fee value.
100 PLN / 31 = 3,23 PLN
2. Calculate how many days remain from the Contract Start Date to the beginning of the first full Interval Period.
31 - 12 = 19
3. Multiply this number by the Daily Membership Fee from point 1 above.
19 x 3,23 PLN = 61,37 PLN
The Prorata amount equals 61,37 PLN.
How to set up Contract End Prorata?
- Go to the PGM -> Sale -> Memberships -> Payment Plans.
- Select the existing Payment Plan or create a new one.
- In the Settings field, pay attention to the following options:
- Payment interval occurs on contract start day (no prorata) - keep this checkbox unticked if you want to allow for any kind of Prorata on the Contract. Otherwise, the Payment Interval will start on the Contract Start Date.
By default, the system counts the Prorata, which means that the first Payment Interval starts on the first day of the next month.
- Payment interval occurs on contract selected day - here, you can choose the day of the month when the Payment Interval starts.
- Contract end prorata - in case of ending the Contract before the Payment Interval, the system counts the remaining period till the Contract End Date and reduces the value of the Contract.
-
Prorata type - select one of the following options:
- Default value - it means daily.
- 100% Membership Fee - it means that the amount a member has to pay between the Contract Start Date and the start of the first full Payment Interval will always be the same, irrespective of the number of days in the Prorata period.
- Daily - it means that the system divides the Membership Fee into days and counts the amount a member has to pay between the Contract Start Date and the start of the first full Payment Interval.
-
In this option, the start of the Commitment Period is the same as the date of the first full Payment Interval charge.
Example
Assuming a Contract ends on April 12th, and the last full Payment Interval ends on March 31st., the Prorata for the 12 remaining days between these dates is counted according to the following rule:
1. Divide the Membership Fee by the number of days in April. This way, you will receive a Daily Membership Fee value.
100 PLN / 30 = 3,33 PLN
2. Calculate how many days remain from the last full Payment Interval to the Contract End Date.
30 - 19 = 11
3. Multiply this number by the Daily Membership Fee from point 1 above.
11 x 3,33 PLN = 36,63 PLN
The Prorata amount equals 36,63 PLN.
Hints
- The Prorata amount will vary depending on the number of days in the month it is calculated for.
- Prorata that lasts for at least two months is calculated by adding up the Prorata from these months.