Plan change invoice: 3 lines to check before you send

• Confirm the change date and billing period before checking amounts.
• Compare the credit with the old price and unused time.
• Check the new charge against the agreed price and start date.
• Add the lines yourself before sending.

This post is for the office manager or owner who sends that invoice. It covers three lines to check before you send it. The checks come from one public example: Stripe's documentation on prorations , which shows the parts a proration invoice can include when a subscription changes partway through a period. Stripe is one billing system. Its example is not a rule that every provider follows, and your software may label lines differently or put them in another order. Treat the three checks as questions to ask about whatever your invoice shows.

Stripe's example downgrades a subscription to 10 USD per month, with proration_behavior set to always_invoice. The example response then shows the parts of the invoice that result. Three of those parts are the lines this post is about, and they are the ones to read most carefully before you hit send.

It needs three checks because one bill carries two prices: the old price for part of the period and the new price for the rest. An invoice that shows only the new price, or only a total, hides that split. The customer then has to guess how the number was built, and you have to be sure of it yourself before you send.

Stripe's example makes the split visible. It refers to a credit for unused time at the previous price, a cost for time spent at the new price, and a new subtotal and total for the invoice. Read each one on its own first, then read them together, and confirm they add up to the amount you expect.

The checks do not require special knowledge of billing. They require four facts: the change date, the old price, the new price, and the dates of the billing period. If you have those four facts written down, you can run all three checks. Use the maintenance agreement proration inputs to organize that information.

The first line to check is the credit for unused time at the previous price. In Stripe's example, this credit appears on lines 36-38 of the expanded example response . Those line numbers locate the example, not your invoice. Your invoice will have its own layout, so find the credit by what it says, not by where it sits.

Check these things on the credit line:

• The old price. The amount should reflect the price the customer was paying before the change. If you are not sure what that price was, find it in your records before you send anything. Do not work it backward from the new total.
• The unused time. The credit is for unused time at the old price, so the days it covers should be the days left after the change took effect. If the credit covers days before the change, something about the dates is wrong.
• The direction. A credit should reduce what the customer owes. If the credit line adds to the bill, stop and find out why before you send.

A simple way to read the credit is to start from the change date. Ask how many days of the billing period came before the change and how many came after. The after-days are the ones the credit should be about.

Write down the old price and the days left before you open the invoice. Then compare the credit line with your notes rather than with your memory of what the customer paid. Writing the numbers first turns the check into a comparison you can repeat.

If your invoice shows no credit line at all, find out from your billing software or your records how the change was handled before you send. Do not assume the software handled it.

If the credit line looks wrong, do not adjust it by feel. Go back to the change date and the period dates, work the figure out again from them, and only then decide whether the invoice needs to change.

The second line is the cost for time spent at the new price. In Stripe's example, this line appears on lines 107-109 of the same expanded example response . As with the credit, the line numbers only point to the example. They do not say where the line will sit on your document.

Check these things on the new-price line:

• The new price. The amount should match the new plan price for the time it applies to. Confirm it against the price you set and the price you told the customer about.
• The start date. The time at the new price begins on the day the change took effect. A line that starts a day early or a day late will be wrong even if the price is right.
• The period. Make sure the line covers the part of the billing period the customer agreed to pay at the new price. If the line looks like a full period at the new price after a mid-period change, check it against the change date before you accept it.

This is the line to compare with the new agreement, so spend the most time on it. Hold the figure up against the agreement itself, not against your memory of the agreement.

Three mistakes are easy to make on this line. The first is using the new price for the whole period, as if the change had happened on the first day. The second is starting the charge on the date the customer asked for the change rather than the date it took effect. The third is leaving the plan name off or mislabeling it, so the customer cannot tell which plan the charge is for. Each of these is a reason to pause before you send.

The third line to check is the new subtotal and total for the invoice. In Stripe's example, these appear on lines 276-279 of the same expanded example response , after the credit and the charge lines. Read the total as the result of the lines above it.

Add the invoice yourself. Take the credit, the new-price charge, and any other line on the invoice, and confirm the subtotal equals their sum. Then confirm the total equals the subtotal plus any tax or fee that applies to this invoice. Do the sum by hand or with a calculator, rather than trusting the figure the software shows you. A total that looks right on the screen can still be wrong if one of the lines beneath it is wrong.

If you write a short summary for yourself, list each line with its amount, then the subtotal and total. Compare that list with the invoice before you send. For related checks, see invoice total calculation and rounding limits .

Then compare the total with what you told the customer. If they were told one monthly figure and the invoice shows another, resolve that before you send. Sometimes the difference is a line you forgot to explain. Sometimes it is a mistake. You will know which only after you go back through the lines.

If the total is different from what you expected, go to the lines first. Find the one that moved, check it against the dates and prices you wrote down, and fix that line. Then recompute the subtotal and total. Adjusting the total directly, without touching the line that caused the difference, leaves the invoice internally inconsistent.

Suppose an illustrative invoice starts with a charge of 40, then shows an unused-time credit of 10 and a new-price charge of 20. Subtract 10 from 40 and add 20: the subtotal is 50. With no taxes, fees or other lines in this illustration, the total is also 50. This checks the addition; you still need the agreed prices and dates to check whether the credit and charge are correct.

Before you read the three lines, confirm the change date. Write down three dates: the day the price change took effect, the first day of the current billing period, and the last day of that period. Each of the three lines should match those dates.

A change date can be different from the day someone asked for the change. The customer may have called on one day, and the change may have taken effect on another. Use the date the change actually took effect under the terms that apply to the customer. If you are unsure which date that is, check the written agreement or the record of the change before you build the invoice.

A mid-period change is the case where the dates matter most, because the credit and the new-price charge are both measured from the change date. If the dates are off by even a day, both lines can be off, and the total can be off with them.

Keep the dates in one place, such as a note beside the invoice, so you are checking the lines against them rather than against memory.

Xero's pricing page states one provider's timing rule for changing to a less expensive plan.

On its US pricing plans page , Xero says: "If you later decide to change to a less expensive plan you can do so 1 month after upgrading." That sentence describes Xero's plans. It is not a rule for your maintenance plan, and it is not a rule for every provider. Use it as a reminder to look at the timing terms of your own plan.

If your maintenance agreement sets a notice period or a waiting period for downgrades, use the date that agreement gives. Check the agreement before you write the invoice, not after the customer calls about it.

Read the invoice from top to bottom the way the customer will, before you read the total. A customer who does not know the details of the change should still be able to tell what each line is for.

Start with the labels. Each line should say what it is, in words the customer can follow. If a line is labeled only with a code or an internal name, change the label if your software allows it, or explain the line in the note that goes with the invoice.

Next, check the order. The credit and the new-price charge should be easy to tell apart, so the customer can see which is which. If they run together, the reader has to work harder to follow the total.

A short note can tell the customer what the invoice shows and when the change took effect. Keep the note plain, and make sure it matches the lines you have checked. It can also state the new monthly price, so the customer can compare it with what they expected.

A note does not replace the checks. If the note says one thing and the invoice shows another, fix whichever one is wrong before you send. Mention the credit and the new-price charge in the note only if you are sure both will appear on the invoice.

Write the note after you have checked the three lines, not before. That way the note describes the invoice as it is, not as you planned it.

Save a copy of the invoice as sent, along with your notes on the dates and the three lines, so the record of the change is kept. If the customer asks about the invoice later, you will have the same figures you used to check it. If you need to correct the invoice, the record can show what was wrong and what changed.

Keep the record with the customer's other billing records, so it is easy to find if that customer changes plan again.

1. Write down the old price, the new price, and the date the change took effect.
2. Write down the start and end dates of the current billing period.
3. Check the credit line: the old price, the days left after the change, and the direction of the amount.
4. Check the new-price line: the new price, the start date, and the period it covers.
5. Add the lines by hand and confirm the subtotal equals their sum.
6. Confirm the total equals the subtotal plus any tax or fee that applies.
7. Compare the total with what you told the customer.

If any step does not match, do not send the invoice yet. Fix the dates or the price first, then check the three lines again from the top.

Open the next plan change invoice you need to send and work through the checklist beside your agreement and billing records. If you are not sure how a line should be handled, ask whoever keeps your books before you send the invoice.

Does every billing system show the same lines?

Your software may label or arrange the lines differently. Find the credit, new-price charge, and subtotal and total by their descriptions.

Does a matching total prove the invoice is correct?

A matching total does not prove that the dates and prices behind each line are correct. Check those inputs before accepting the arithmetic.

When should a downgrade take effect?

Use the effective date under the customer's agreement. Check any notice or waiting period before building the invoice.