If your company uses ServiceCore to manage inventory, rentals, and rental jobs, there are two company settings that will make it easier to ensure that you're invoicing for all rental activities when using recurring invoices:

1. Automated Rental Rate Proration for Recurring Invoices and Batch Billing
2. Early Pick-Up Proration

In this article you'll learn about rental proration settings and the effect these settings have on invoice totals.

Before You Start

Here are a few things to keep in mind before you change rental proration settings:

• You must have Admin or Owner level permission to change company settings
• The automated proration setting mainly applies to rental invoices created from a recurring invoice template, but there are some changes to be aware of with one-time rental billing as well
• These settings only apply to invoices associated with a rental (invoices not associated with a rental are not affected)
• If you change the settings described below, the changes take effect at the time they are changed. This means that previously-created invoices will not be affected. Only invoices created after the settings are changed will adopt the new proration rules.

Show Me the Money!

To make the best decision about what settings are right for you and your organization, below is a fictional rental scenario to show you how changing your settings can raise or lower invoice totals when you use recurring invoices.

Scenario

Below is an example timeline of activities for a rental spanning June 1 to July 31:

How Proration Settings Affect Revenue

Given the scenario above, here are three examples of how changing proration settings affects the revenue of this rental:

Try It Out For Yourself

Here is the spreadsheet we've developed to simulate how these settings can impact rental revenue. It’s a Google sheet with instructions and you can make a copy and use it as you please: Advanced Proration and Early Pick-Up Examples Google Sheet.

Automated Rental Rate Proration for Recurring Invoices and Batch Billing

When you bill rentals in advance or in arrears using recurring invoices, you never want to miss out on extra service jobs, one-time charges, or mid-billing cycle deliveries or pick-ups. Before now, in order to bill for these kinds of activities, you had to make one-time invoices manually. This caused you extra time and effort to create invoices for mid-billing cycle activities.

The improved rental rate proration and recurring invoice billing will now handle collecting together any mid-billing cycle activities on rentals, and automatically adding them to invoices created from recurring templates. This includes when you create the invoice from the recurring template manually and when you use batch billing.

Here is an overview of the advanced proration changes:

Turn On Automated Rental Rate Proration When You're Ready

When you're ready to turn on this feature, it's as simple as changing one setting in your account. To turn on this feature, follow these steps:

1. Navigate to Settings > Company
2. Click the Preferences tab
3. Go to the Rentals > Proration section
4. For the question, "Enable automated rental rate proration for recurring invoices and batch billing?" select Yes
   
   
5. Click Save

Rental Rate Line Items

Rental rate line items will be generated based on the rental rate period. This means that instead of one line item for the entire billing period, a separate line will be generated for each subdivision of the rental period.

Before

After

As a quick refresher, remember that the quantity is calculated by Units on Site x Number of Days in the Period. In the first row of the example above we have:

• 1 item on site for a fraction of days in multiple months:
  
  • 20/30 days in April
  • 8/31 days in May
• (1 x 20/30) + (1 x 8/31) = 0.925

The changed behavior can be seen with the weekly rental, where each week now has its own line item for the number of units on site during the week. If the billing period results in a partial week being billed, the line item quantity will be calculated in the same way as in the example above.

We hope that this change makes rental rate billing much more clear for you and your customers.

Batch Billing

If you use recurring invoices for rentals and you use batch billing, when you're on the “Preview and Send” Invoices page, you will now see a flag on invoices when the total for the next upcoming billing cycle is different than the previous billing cycle total. 

• This flag will appear for rental and non-rental recurring invoices
• The flag will look like this:
  
• When you hover over the orange warning icon, you'll see this help text: "The invoice total for this billing period does not match the invoice total of the previous billing period. This is likely caused by additional delivery, pick-up, exchange or service jobs.”
  

Service Line Items Added to Jobs

Service line items added to jobs when creating a new rental or when creating rental jobs will now be pulled into recurring rental invoices automatically. Here are a few things to keep in mind when you add services to rental jobs:

• Services added to jobs will appear on the mobile app
• The rate and price of each service will appear in the mobile app
• Services added to jobs will automatically be added as billable line items to any invoices linked to this job

Best Practices for Service Line Items on Rental Jobs

Use service line items on jobs to bill for one-time charges such as:

• Delivery fees
• Extra one-time service charges
• Early pick-up charges

How to Avoid Double Billing for Rental Jobs

If you have a service on a rental job for $100.00, and a rental rate for weekly cleaning also for $100.00, this will create two line items and result in a double charge of this service ($200.00 total) on invoices created using the new advanced proration feature.

To avoid double charging customers, if rental rates already include the price your customers pay to have inventory cleaned, serviced, or winterized on a recurring basis you may want to:

• Change the rate of each service on the job to $0.00
  • For example, in the case where you use services on jobs as a technician or driver checklist and not as a list of billable services
    • The service line items will appear on invoices, but those line items won't add anything to the invoice total
    • This technique can provide transparency to your customers about what services are performed each job (and to show more details about what's being included in the rental rate price)
• Remove services from jobs
• Adjust the rental rate amount on the rental to exclude the price of the services added to jobs

Don't Miss Out on Past Money!

When you use batch billing to create invoices, or when you create the next invoice from a recurring invoice manually, all jobs that were scheduled, completed or cancelled during the previous billing cycle, and the next upcoming billing cycle, will be automatically added to the invoice.

It is important to maintain the links between rental invoices and any jobs that occurred during the recurring invoice billing period. This association between jobs and invoices is what makes automated proration possible.

If you don't want to charge for a job, you can remove any line items associated with that job. Please leave the job itself associated with the invoice so proration works as expected.

In the example below you can see the delivery job and its one-time delivery fee associated with that job have been added to the invoice:

Delivery Jobs

Rental rates for the inventory associated to the rental will be prorated for the additional time the additional units were on the job site. Plus, any additional service line items added to mid-billing cycle delivery jobs will be added as a one-time service line items to the invoice.

For example:

• If you already created an invoice on Jan 1 for the billing period Jan 1-28 from a recurring invoice billing in Advance every 28 days
• If there is an extra delivery job on Jan 15 to delivery additional units to the job site
• When you create the Feb 1 invoice...
  • The rental rates will be prorated automatically to include the 14 days those additional units were on site (so you don't have to remember to add these extra two weeks of rental rates yourself)
  • The Jan 15 delivery job and the one-time delivery fee associated to the mid-cycle delivery job will be added one-time to the Feb 1 invoice (and it will drop off the Mar 1, Apr 1, and future invoices)

In the screenshot below you can see how the line items will appear (invoice date is March 10, billing 28 days in Advance)...

1. This line shows the prorated amount from the 3/1 delivery through the invoice date (Quantity is 1 additional unit for 9 days out of a 28 day billing period, or 1 x 9/28 = 0.321)
2. This line shows the advanced billing amount for all units on site from 3/10 to 4/6 (28 days)
3. This line shows the one-time delivery charge associated with the 3/1 delivery job

Service Jobs

If there are extra service jobs performed for a rental during an already-billed cycle, and these service jobs have non-zero "billable" line items, these jobs will be automatically added to the next invoice when this setting is set to "Yes".

For example:

• If you already created an invoice on Jan 1 for the billing period Jan 1-28 from a recurring invoice billing in Advance every 28 days
• If there is an extra service job on Jan 15 to clean the units on-site
• When you create the Feb 1 invoice...
  • The Jan 15 service job and the extra cleaning fee associated to the mid-cycle service job will be added one-time to the Feb 1 invoice (and it will drop off the Mar 1, Apr 1, and future invoices)

In the example below, you can see the extra cleaning was automatically pulled in during batch billing, even when the cleaning happened in the previous billing cycle (and when it hadn't been invoiced yet):

Pick-Up Jobs

Rental rates for inventory removed from a rental will be prorated based on the early pickup setting described in the next section: Early Pick-Up Proration.

Early Pick-Up Proration

We are excited to provide you with more controls over rental rates and proration. Part of this work includes the ability for you to decide, at a company level, whether or not you want to prorate rental rates when there are early pick-ups (in the middle of a billing cycle).

In the company settings you will find a new "Proration" setting. This setting will be pre-selected to "Yes" because today rental rates always prorate for early pickup. When you use Automated Rental Billing, you can change it if you decide you don't want to prorate for early pick-ups. Based on your selection, ServiceCore will handle the calculation of rental rates accordingly based on mid-billing cycle pick-up jobs.

If this setting is set to "No"

If the proration setting for pick-up jobs is set to "No", here's an example of what will appear on the invoice:

• If you already created an invoice on Jan 1 for the billing period Jan 1-28 from a recurring invoice billing in Advance every 28 days
• If there is an early pick-up of units on Jan 15 to remove units from the job site
• When you create the Feb 1 invoice...
  • The rental rates will not be adjusted or pro-rated to provide a credit back on the Feb 1 invoice (the invoice bills for the items on-site as of the invoice date)

In the example below, the line items on the invoice details page show...

1. There were 8 units on-site at the time of the invoice (billing period is 3/10-4/6)
2. Because the automated proration setting is set to "Yes", a second line item appears to show the service line item from the early pickup job on 3/15
3. The "28 Day Stick Rental" is not prorated based on the early pickup on 3/15, so the customer is billed for the full 28 day rental period

Additional Resources

For additional information and further reading about the topics above, please check out these help articles:

1. About Proration
2. Create a Rental Invoice with Recurring Billing
3. Use Batch Billing for Recurring Invoices
4. Add Rental Rates
5. Assign a Service to an Inventory Product to Show as a Rental Rate Option