Pro Rata Billing

Most people during their adult lives would have heard the term Pro rata billing - especially those of us who have been into a shop to buy or upgrade to a new phone.  But if we are totally honest with ourselves, how many of us really know what it means? Our blog’s aim is to help you understand where you're likely to come across this as a business or consumer.

What Is Pro Rata Billing? 

Pro rata billing is most commonly recognisable when you first take a phone contract or upgrade your current contract. At the time, you will usually be given a brief description of how the billing process works, but it can be easy to overlook this when you have a brand new device in your hand.  When you eventually read the small print you see the pro rate charge. Well, in fact, it is not an extra charge but is the payment for the time you use the service until the next bill cycle of that provider or company. 

For example, let's say you take out a new phone contract on the 25th of the month and the provider's billing cycle is the 30th. The pro rata charge would be the 5 days of usage before the bill cycle renews. 

For more information about pro rata billing on your business mobile contracts use the following link to contact one of our experts! 

Here are some other examples where you may come across Pro Rata Billing:

Changes Or Add Ons To Your Ongoing Service:

A pro rata plan charge is another phrase or term you may hear and wonder what it is. A common example would be a change to an ongoing service. Most Wifi contracts are now 12, 18, 24 month periods which at times can seem like a huge commitment - You may ask yourself about the problems that may arise if you want to relocate or want to change the account owner's name to your business partner etc. The good news is, both the above examples are normally easy changes to be made with your WIFI provider. These are normally the type of changes to the ongoing service that would activate pro rata charges on your next bill. Adding an add-on or bolt-on to your current package also would activate this. 

Final Payment:

Pro rata charges are again normally involved when it comes to the termination of an ongoing service. How many of us have thought this is a great sales technique to get a few extra pounds out of us before we part ways from their services? But in fact, it actually is covering you as the consumer! Normally we are asked to give 30 days' notice, and when we do this we expect to be charged double for the final payment. With pro rata charges though, this is not the case - and just like when you start a contract, you only pay for what you have used up to the billing cycle. This is the same as the final payment. I am sure you will see that pro rata billing is not as complicated or scary as it may seem and actually protects you as the consumer.

Pro Rata Recap:

Here is a list of the scenarios where you are likely to come across pro rata charges.

1. Taking a new service/agreement normally within the telecommunication sector e.g. phone contracts, wifi services.
   
   
2. Changes to your ongoing plan, Change of Ownership or location.
   
   
3. Your final Bill.
   
   
4. When you, the consumer, request a change to the billing cycle date.

We hope this blog has helped you understand what pro rata charges are. If you have any questions or would like more information as a consumer or as a business owner, our team of friendly experts at Your Comms are always on hand.