Prepaid Credits
Sell customers a block of usage credit up front. MonetizeNow uses it to pay their usage charges automatically until the balance runs out or the contract ends.
Explanation
How prepaid credits work
A prepaid credit lets a customer pay for usage in advance. The customer pays a fixed amount at the start of the contract. MonetizeNow turns that amount into a credit, which pays down the customer's usage charges automatically until it runs out or the contract ends.
When to use a prepaid credit
Use a prepaid credit when a customer wants to commit money up front, for example $50,000 of usage, instead of paying for usage as it happens. Customers often want this to lock in a budget or to spend money they've already set aside.
How it compares to other ways of billing usage
| Prepaid credit | Minimum commitment | Pay as you go | |
|---|---|---|---|
| What the customer pays | The full credit amount once, at the start | A committed amount every billing period | Only what they used |
| When they pay | Up front | Each period, either in advance or after the period | After the usage happens |
| What happens to usage | Usage is paid from the credit balance | Usage counts toward the commitment. Usage above it is billed. | Usage is billed directly |
| Best for | Customers who want to prepay and budget | Customers who want a guaranteed floor with room to grow | Customers who want to pay only for what they use |
See Minimum Commitment Products and Billing for Usage for the other two options.
The life of a prepaid credit
- A rep sells it on a quote. The rep enters the credit amount as the quantity.
- The quote is processed.
- MonetizeNow creates one credit for each prepaid credit line on the quote, right away. It doesn't wait for the invoice to be paid.
- The credit belongs to the bill group on the quote.
- The credit expires on the contract end date.
- The prepaid amount is invoiced up front, like any one-time charge.
- Each new invoice for that bill group draws on the credit automatically. The credit pays usage and minimum commitment charges until the balance reaches zero. Subscription and one-time charges on the same invoice are billed as normal.
- The credit expires at the end of the contract end date. After that it no longer applies to new invoices.
How prepaid credits fit with other credits
A bill group can hold three types of credit. When an invoice is finalized, MonetizeNow applies them in this order:
| Credit type | How it's created | What it can pay |
|---|---|---|
| Credit Note | Issuing a credit note against an invoice | Any invoice in the bill group |
| Service Credit | A user adds it with New Credit | Any invoice in the bill group |
| Prepaid Credit | Processing a quote that includes a prepaid credit product | Usage and minimum commitment charges in the bill group |
You can't create a prepaid credit by hand. It's always created by processing a quote.
Revenue recognition
MonetizeNow recognizes the full prepaid amount on the date it's invoiced, the same way it treats one-time charges. It doesn't spread the amount over the contract term, and it doesn't recognize revenue as the customer uses the credit. Any recognition method set on the product is ignored for prepaid credits.
How-to guide
Set up a prepaid credit product
Who this is for: admins who manage the product catalog.
Create the product
- Go to Product Catalog › Products and select New Product.
- For Product Type, choose Onetime Pre-Paid Credit.
- IIn the prepaid credit configuration section, MonetizeNow will automatically choose usage products only for you.
- Save the product.
Result: the product is ready to add to an offering. Once it's used in an offering, Product Type and Credit Application can no longer be changed.
Add it to an offering
- Open or create the offering. It must be one of these:
- A One-time offering.
- A Subscription offering that also contains at least one subscription or usage product.
- Add the prepaid credit product.
- Add a rate for the product. MonetizeNow fills in and locks the pricing for you:
- Pricing Model: Volume
- From: 0
- Up to: blank (no limit)
- Amount: 1
- If the offering is a one-time offering, set the rate's billing frequency to one-time.
- Save the offering.
Result: reps can now add this offering to quotes and sell prepaid credit. Because the price is 1, reps enter the credit amount as the quantity.
Sell prepaid credit on a quote
Who this is for: reps who build quotes.
Sell prepaid credit on a new deal
- Add the offering that contains the prepaid credit product to the quote.
- On the prepaid credit line, enter the credit amount in Total Quantity. For $50,000 of credit, enter 50000. Price Per Unit is always 1.
- Send and process the quote as usual.
Result:
- The customer's first invoice includes the prepaid amount.
- A Prepaid Credit appears on the Credits tab of the account and the bill group.
- The credit amount excludes tax.
Add more credit during the contract
On an amendment, existing prepaid credit lines are read-only. To sell more credit:
- Create an amendment quote for the contract.
- Add a new offering that contains the prepaid credit product.
- Enter the additional credit amount in Total Quantity.
- Process the amendment.
Result: MonetizeNow creates a second, separate credit for the new amount. The new credit expires on the contract's end date as it stands after the amendment.
Note: Changing the contract end date doesn't change the expiration date of credits that already exist. If you extend a contract, the original credit still expires on the original end date.
Renew a contract that has prepaid credit
Prepaid credit isn't carried over to renewal quotes. If the customer is prepaying again, add the prepaid credit offering to the renewal quote yourself.
Check the customer's Amount Remaining before you send the renewal. Credit left over from the current contract expires on the contract end date.
Check how much prepaid credit is left
Who this is for: billing teams and account managers.
- Open the account, or one of its bill groups.
- Select the Credits tab.
- Find the row whose Type is Prepaid Credit. Amount Remaining shows the balance that's still available.
- To see which invoices the credit has paid, select the row. The credit page shows the amount Applied and the Application History.
Apply a credit to an open invoice
Credits are applied automatically only when an invoice is finalized. If an invoice was already open when the credit was created, apply the credit manually:
- On the Credits tab, open the actions menu for the credit and select Apply Credit.
- In Apply Credit to Invoice, enter the amount to apply to each invoice.
- Select Save.
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Prepaid credit rules and limits
Product settings
| Setting | Value |
|---|---|
| Product Type | Onetime Pre-Paid Credit |
| Credit Application | Usage Products Only. The credit pays usage and minimum commitment charges. Other options are shown as "Coming Soon". |
| Proration | Not available. The full amount is always billed. |
| Recognition method | Ignored. Revenue is recognized in full on the invoice date. |
| Editing | Product Type and Credit Application are locked once the product is used in an offering. |
Rate settings (set and locked automatically)
| Setting | Value |
|---|---|
| Pricing Model | Volume |
| Tiers | 1 |
| From / Up to | 0 / no limit |
| Amount | 1 |
Offering compatibility
| Offering type | Can include prepaid credit? |
|---|---|
| One-time | Yes |
| Subscription | Yes, if it also contains at least one subscription or usage product |
| Minimum commit | No |
| Percent of total | No |
| Token | No |
Quote behavior
| Action | Supported? |
|---|---|
| Set the credit amount | Yes, in Total Quantity (price is 1) |
| Discounts | No |
| Price uplift | No |
| Ramp a one-time offering | No |
| Ramp a subscription offering that contains prepaid credit | Yes. The credit applies to the first period only and isn't included in later periods. |
| Change an existing prepaid line on an amendment | No. Add a new offering with the prepaid credit product instead. |
| Carried into renewals | No |
| Included in renewal estimates | No |
The credit
| Detail | Value |
|---|---|
| Where to find it | Credits tab on the account or the bill group |
| Type | Prepaid Credit |
| Reason | "Prepaid Credit for [product description]" |
| Amount | The quote line amount, excluding tax |
| Amount Remaining | The balance still available |
| Expiration | The contract end date when the credit was created. It doesn't change if the contract changes later. |
| Statuses | Active, Applied, Expired, Inactive, Voided |
| Created by | Processing a quote. New Credit creates service credits only. |
How credits are applied
- MonetizeNow applies credits automatically when an invoice is finalized. Credit notes go first, then service credits, then prepaid credits.
- Draft invoices and invoice previews don't show credits.
- A new credit isn't applied to invoices that are already open. Use Apply Credit to apply it manually.
- A prepaid credit doesn't apply to invoices finalized after its expiration date. That includes the usage invoice for the contract's last billing period.
- A deactivated credit doesn't apply to future invoices.
Accounting integrations
Prepaid credits sync to your accounting system as a credit memo or credit note with one line item for the credit amount. The invoice that bills the prepaid amount syncs like any other invoice.
| System | How the credit appears | Setup you need |
|---|---|---|
| QuickBooks Online | A credit memo using the item Monetize Now Service Credit Item. When the credit is applied, MonetizeNow creates a $0 payment that links the credit memo to the invoice. | The item is created for you. Your chart of accounts must include an income account named exactly Sales of Product Income. |
| NetSuite | A credit memo using the item Monetize Now Service Credit Item, allocated to invoices as the credit is applied | Create an item whose Item Name/Number is exactly Monetize Now Service Credit Item. If you match products by SKU, use that value as the SKU instead. |
| Xero | A credit note using the item Monetize Now Service Credit Item (code CRDT), allocated to invoices as the credit is applied | None. The item is created for you. |
| Rillet | A credit memo, created once the credit has been applied to an invoice | Set a default product on the Rillet connection. |
Service credits sync the same way.
Two limits apply to all systems:
- An invoice must sync before a credit applied to it can sync.
- Voiding a credit in MonetizeNow doesn't update the accounting system. Update or remove the credit memo there yourself.
Common questions
The customer has prepaid credit, but their invoice still shows a balance.
Prepaid credit only pays usage and minimum commitment charges. Subscription and one-time charges are billed as normal.
The last usage invoice of the contract wasn't paid from the credit.
That's expected. The last period's usage is invoiced the day after the contract ends, after the credit has expired.
Can I give the customer more credit partway through the contract?
Yes. Add a new prepaid credit offering on an amendment. See [Sell prepaid credit on a quote].
What happens to unused credit at the end of the contract?
It expires on the contract end date and no longer applies to new invoices. Review large balances before the renewal goes out.
Can I create a prepaid credit by hand?
No. New Credit creates a service credit. Prepaid credits are created only by processing a quote.
Why can't I discount the prepaid credit line?
Prepaid credit products can't be discounted. Lower the quantity instead.
Why didn't a new credit pay an invoice that was already open?
Credits are applied automatically only when an invoice is finalized. Use Apply Credit to apply it to an open invoice.
My credit isn't syncing to NetSuite.
Check that NetSuite has an item named exactly Monetize Now Service Credit Item, and that the invoice the credit was applied to has already synced.
Updated about 3 hours ago