In this article, you will learn about the different calculation methods for your members' contributions when an idle period is applied.
Overview
Quick Guide to Using the Functionality:
- Settings / Member Management / Idle period Configuration
- Then click on any configuration.
- Open the configuration for idle periods
- Select a calculation method for idle period contributions.
Contribution Calculation Methods
We introduce different modes of contribution calculation for idle periods, so you can decide how idle periods will affect your members' contributions.
Previously, the dynamic contribution calculation mode was implicitly used.
Based on your members’ payment frequency, either a full or a partial calculation was applied. The following examples explain how these calculations work.
Full Contribution Calculation
In this calculation method, the idle period affects the standard due date but does not impact the contributions that your members need to pay.
When an idle period is applied, any previously due contributions remain on the member’s account. If you apply an idle period retroactively to cover the penultimate payment, the last due payment will be canceled and replaced by the free amount.
At the start of the next service period, a free contribution will be created, and the member’s standard due date will be set to the first day after the idle period.
From then on, the standard due date will shift from February 1 to February 8, with service periods spanning February 8 to March 7, and this change will persist for the duration of the contract.
The idle period will only apply to future service periods and will not create any (cancellation) invoices or credits.
Partial Contribution Calculation
With partial contribution calculation, the membership fee is divided based on the idle period, calculating a prorated contribution precisely before and after the idle period. This division is necessary to preserve the member’s standard due date and ensure that service periods remain consistent after the idle period.
When an idle period is applied retroactively, any already due or settled contributions are canceled or refunded. Subsequently, prorated contributions are recalculated precisely according to the idle period duration and recorded as receivables in the member account. This cancellation and recalculation will generate invoices and credits.
Service periods remain unchanged, and the member’s standard due date is preserved.
Dynamic Contribution Calculation
The dynamic contribution calculation selects a mode between full and partial contribution calculation.
This considers the payment frequency and contract term. Specifically,
-
a full calculation is applied for payment frequencies > 1 month
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a partial calculation is applied for payment frequencies <= 1 month
will be performed accordingly.