Overview
When a customer expands — more seats, higher tier, additional modules — Fincelo never auto-pro-rates. It always presents 3 options to the CFO, each with full ASC 606 treatment shown. The CFO chooses. The choice is logged with name + timestamp.The 3 Expansion Options
Option 1 — Pro-Rated Co-Terminus
- New seats billed pro-rata from expansion date to original contract end date
- All seats renew together on the original anniversary
- ASC 606: recognise pro-rated amount over remaining term
Option 2 — Fresh 12-Month Independent Cycle
- New seats start a fresh 12-month contract from expansion date
- Original seats and new seats renew on different dates
- ASC 606: full 12-month recognition on new seats
Option 3 — Extended Co-Terminus
- Contract end date extended to accommodate new seats at full price
- One unified renewal date maintained
- ASC 606: blended recognition over extended term
All 3 options recognise the same total monthly amount — the difference is timing and renewal structure, not total revenue.
Ratchet Clauses
If the contract has a ratchet clause (minimum revenue guarantee), Fincelo flags it during expansion billing:- Contraction below the ratchet floor is blocked
- Expansion above the ratchet is calculated correctly
- AI detects ratchet language automatically during contract extraction
Effective Date Options
For mid-contract changes, Fincelo offers 3 effective date choices:- Immediate — change takes effect today
- Next billing date — change takes effect on next invoice
- At renewal — change takes effect when contract renews
Audit Trail
Every expansion decision is logged:- Option chosen (1, 2, or 3)
- CFO name
- Timestamp
- ASC 606 treatment applied
- Previous contract value vs new contract value