Don’t Forget About Pro-Rata Payments (#Cashflow) Tip 16

Fact: Pro-rata Payments is a Fraction of Your Money

pro-rata payments

Day 16 of 31 Days – How to Improve Your Business Cashflow by Ezypay

Amanda Bracks from Bracks Consulting states that, “There are many businesses that are currently not taking pro-rata. They go through all the hard work of negotiating with the prospect on a sale price, the sale is accepted and then the business discounts the customer’s fee when they are actually processing the payment details. The customer never asked for this to be removed and it’s a lost opportunity of income.

Pro-rata payments is the amount of money owed before the next debit is due. Investopedia describes it as a method to proportionally allocate an amount to a fraction, according to its share of the whole.

Many sales people seem to waive the pro-rata, assuming that the payments can simply start on the next debit. It is very important to the business to retrieve all funds owed for the purchase, including the amount owed before the first debit is due.

How To Calculate Pro-rata Payments

Working out pro-rata payments is simple. Just divide the debit amount to get a daily amount.

For example, if your services are $89 a month x 12 months and divided by 365 days, your pro-rata total is $2.93 per day.

If someone had 10 days before their debit is due, they owe $29.25 to get started (plus relevant joining / admin fees). If you sell 100 units per month and your pro-rata is roughly $29.25 on average – that’s an astounding $35,100 extra income per year (i.e. money your staff are giving away now for no reason)!


So today’s #cashflow lesson is to ensure that all your staff understand and are disciplined enough to consistently collect pro-rata on every unit sold, either at point of sale (POS) or have it debited out of their account on first debit. For more info on how iconnect360 can help ensure that your gym or fitness club is taking into account pro-rata payments, contact the sales team today.


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