Diary of a Salesforce Consultant - Salesforce CPQ Prorating

Product proration in Salesforce CPQ refers to the calculation of the cost of a product or any recurring goods that is used only partially during a billing period.

For example, if a customer subscribes to a monthly service that costs £100, but cancels the service after 15 days, the prorated cost for that billing period would be £50 (i.e., half of the monthly fee). Or another example, if a customer purchases a SaaS product for a 12 month contract in January for 100 licences but in July realises they require an additional 50 licences, proration works out what the cost of the additional 50 licences would be for the remainder of the 6 months from July to December.

In other words, proration allows you to charge a customer a portion of the full price for a product or service based on the length of time that it was used during a specific billing period. This takes out the complexity for your billing process and co-terms additional purchases mid-contract.

However, there are instances when businesses do not want to see prorated amounts and may want to report on annual prices for reporting or to show customers on product templates. This is where something custom would be built and is a user case I have across and we will tackle in another blog post. What's important before building out un-prorated fields is to ensure you understand the requirements before proceeding further.

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