· Daniel Tan
What actually happens when a subscriber changes plan mid-term
Proration rules are buried in product settings. Finance teams often learn the rule from a disputed invoice rather than from the accounting policy.
A plan change is a contract modification. MFRS 15 then asks whether the remaining goods or services are distinct, and whether the price change should be treated prospectively. The billing application asks a simpler question: what do we put on the next invoice.
Those two questions diverge. Credit-then-rebill can create a negative invoice in a period when revenue should simply be re-measured. Net-delta billing can hide a discount that should have been spread. A “charge from next anniversary” setting can leave a week of service unbilled that the contract said was billable.
Before testing a sample, we write down the rule the entity believes it follows — from terms of service, order forms, and the product catalogue. Then we rebuild the invoice from the event log. The finding is rarely that the application is “wrong”. It is that three teams each thought a different default was in force.
If you only have time for one control around plan changes, make it this: no modification above a stated value goes live without a finance user seeing the prospective invoice. That is cheaper than reconstructing proration after year-end.
If this is the problem on your close, request a scoping note