To be fair and fully transparent with our clients Insightful is using the prorated billing system and our invoices reflect it line by line. Thats why these can come across a little bit complex.
Once you understand how our prorated billing works, the invoices will make complete sense.
There are three events that trigger prorated changes visible on your invoice:
Increasing your number of licenses during a billing cycle,
Reducing your number of licenses during a billing cycle,
Changing your price plan during a billing cycle.
In this article we will explain how each of these events affects your billing and how they are presented on your invoice.
We present here each of the three events and their representation on your invoice individually for easier understanding. Keep in mind that you might also come across various combinations of these on your invoice if multiple of these events happened in the same billing cycle.
Let’s go through a practical and simple example:
Insightful's customer Acme company has a monthly subscription, and their billing cycle starts on the 2nd of each month.
On that day Insightful issues an invoice for the number of active licenses for the subscription plan Acme is using on that very day but, depending on the events that happened in the previous billing cycle, Acme might have a credit or a debit from the previous cycle that will be applied on their invoice. This might increase or decrease their total due amount.
Let's analyze examples of invoices that are issued on April the 2nd, covering subscription until May the 2nd, with all the possible events from the previous billing cycle that could have made an impact on the invoice:
Increased number of licenses in the previous billing cycle
This invoice was issued on April the 2nd for 2 licenses at the price of $8 but the total due amount is $16.56.
This is down to the fact that Acme added one additional license in their previous billing cycle for which they initially purchased 1 license. The event generated a debit on their account and that reflected on the prorated invoice items as a pair of lines (Remaining time and Unused time).
We can see in this example that on March 31, 2024 Acme went from 1 license to 2 licenses. The amounts shown on these pairs of lines are representing proportional debit (Remaining time) and proportional credit (Unused time) from the date of the event until end of previous billing cycle.
By subtracting the Unused time amount from the Remaining time amount you can calculate the amount that will be added to the invoice for the new billing cycle.
Remaining time amount ($1.13) - Unused time amount (-$0.57) = $0.56
This amount will be added to the invoice for 2 monthly licenses ($8 per license) and the total due amount will therefore be $16.56.
Reduced number of licenses in the previous billing cycle
The very same logic will be applied if Acme reduced the number of licenses in their previous billing cycle. In this example Acme is using Time Tracking plan and the invoice for the period of April 2 - May 2 is issued for 1 license at the price of $10 per month but the total amount due is $8.87
This is due to the fact that in the previous billing cycle Acme made a payment for 2 licenses and on March 30 they have deactivated one license. The event has generated a credit on their account. This is again presented with a pair of lines on their invoice, and the impact is calculated with the same formula:
Remaining time amount ($1.12) - Unused time amount (-$2.25) = -$1.13
This amount will be subtracted from their invoice for 1 monthly license ($10 per license) and the total due amount will be $8.87.
Price plan change in the previous billing cycle
Another event that causes a prorated invoice is changing a price plan during a billing cycle. Switching from lower to higher priced plan or vice versa will generate debit (from lower to higher) or credit (from higher to lower) that will impact your invoice for the next billing cycle.
In this example, an invoice is issued for 1 license at a price of $10 on the Time Tracking plan for the April 2 - May 2 billing period, but the total amount due is $11.87.
This is due to the fact that Acme was using Productivity Management plan during the previous billing cycle (lower plan in comparison to Time Tracking and priced at $8 per license) and on March 4 they upgraded their plan to Time Tracking. This event is presented with a pair of lines on the invoice too, and we will calculate the impact with same formula once again:
Remaining time amount ($9.36) - Unused time amount (-$7.49) = $1.87
This amount will be added to the invoice for 1 Time Tracking monthly license ($10 per license) and the total due amount will be $11.87.
The same logic would have been applied if Acme had decided to downgrade their plan and such an event would have generated a credit on their account that would reduce their next invoice.
Invoices are sent automatically to your email address after every charge. Admins, but also Managers with Billing permissions, can review them within the Insightful app in Settings → Billing → Invoices.