I am curious what do you all think of making payments prorated? I am currently in dilemma if this is a positive thing to do for the client or a negative thing for a client.

Prorated payments can be good. This is especially good if you depend on money to be X place on X date (ie: on the first of the month).

I think having prorated payments is good. It makes it more convenient for your client as they will only have to remember that date. It will also be more convenient for you as well because you can expect to receive all of your money on that date.

I don't see how it would affect any clients at all, outside of the first payment (to get to prorated payment time).
They still have to remember a date, whether it's prorated or not. If you give them ample time (7 days) to cover the invoice, that's all good then.

We used to bill clients on prorated basis (and still do for a few) but thats one of the worst things you would have ever done to your business.
If you want a steady flow of payments, go with anniversary billing. Prorated would make you struggle until the 1st of every month (suppose you need to buy new hardware urgently). Plus, it will make your billing department extremely busy for the last 5 days of the previous month and 5 first days of the next month.
Its bitter disappointment for everyone. Please don't even try it.

I suppose it depends on when your bills are due. We don't pro-rate any of our products.

Pro-rated payments = headache when your payments come through, if you have many clients - Refunds, double payment, auditing etc.

We used to bill clients on prorated basis (and still do for a few) but thats one of the worst things you would have ever done to your business.
If you want a steady flow of payments, go with anniversary billing. Prorated would make you struggle until the 1st of every month (suppose you need to buy new hardware urgently). Plus, it will make your billing department extremely busy for the last 5 days of the previous month and 5 first days of the next month.
Its bitter disappointment for everyone. Please don't even try it.
Interesting points that you stated and to be honest I do not see it being a major issue for us at the moment. We currently rent all our hardware, licenses, and etc from SoftLayer. The billing department could be busy for during those 10 days, but shouldn't be to much of an issue with automated payments and etc. The other 20 days to me seem like it would be more devoted to other issues besides billing related stuff.

We also don't do prorated payments. It kind of doesn't make sense for us to do this because it creates issue for our billing team.
All the best,

It can be both good and bad.
Good for the fact that you get all your money on X day. Which can be great for bills purposes.
Bad for the fact that someone might pay today (pro-rated) then pay tomorrow again. Bad for all the phone calls, email sending, etc that goes along with billing.

When we launched 2 months ago, We didn't do pro-rated - I decided we'd give it a shot for this month to see if it proves to be a put off for sign-up's or customers. No complaint's so far from sign-up's :)

Depends on the business model, as an end user I like to be prorated, it means I know exactly when I'm paying. If the business model depends upon clients paying up and then renting server for an extra month, or paying bandwidth bills, then it's probably a good idea. It's nice to know you've got guaranteed funds.

If you want a steady flow of payments, go with anniversary billing. Prorated would make you struggle until the 1st of every month (suppose you need to buy new hardware urgently).
If any company is struggling that bad and can't control spending and cash flow to do prorate billing then they need to rethink there business plan.
Prorate should not cause any problems if you buy new gear as most big companies / real companies have credit with there supply companies with net 30, ect.
Now if your renting / reselling a server, then it's even easier as the DC supplies the stuff.
Plus, it will make your billing department extremely busy for the last 5 days of the previous month and 5 first days of the next month.
Most host use some type of automated billing scripts which handles 99.9% of the billing and should not cause any BIG problems to a normal billing department.

I think the biggest con of prorating is that the first month people get a smaller bill. The next month they get the "normal" bill, BUT subconsciously believe that their rates just went up. It's like a disappointment. I don't believe in disappointing my clients :D