Proration

Proration spreads a recurring cost across the days it actually covers instead of booking it on the day it was invoiced. Rent, salaries, software and insurance are consumed daily, so a statement that drops them on one date makes that day look catastrophic and every other day look free.

The rule nouz uses is arithmetic rather than accounting judgement: a monthly cost is charged at twelve times the monthly amount divided by 365 per day, a yearly cost at the yearly amount divided by 365, and a one-off lands on the day it was booked because that is the day it belongs to.

It is what makes daily reading possible at all. Without proration a per-day profit figure is dominated by whichever invoices happened to arrive, and the whole point of a daily statement is that a Tuesday can be compared with a Wednesday.

It also makes month comparisons honest. Two months with different invoice timing carry the same daily burden under proration, so a month is expensive because it spent more rather than because a bill arrived early.