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Retroactive vs Prospective Calculator
See the dollar difference between a retroactive and a prospective price adjustment across a publication-lag gap, side by side.
Under a prospective clause, the 2-month lag gap is never recovered. The new price only applies from the adjustment date forward.
Under a retroactive clause, the new price reaches back across the lag, correcting 2 month(s) of invoices already sent.
Illustrates the choice once. The product books the true-up entries and logs the approval either way.
Retroactive vs Prospective Calculator, explained
What is the difference between a retroactive and a prospective price adjustment?
A prospective adjustment applies the new price only to work done after the adjustment date. A retroactive adjustment reaches back and reprices work already invoiced during the publication-lag gap. Retroactive is fairer when the lag is long, but harder to administer, since it means correcting invoices already sent.