Examples of Prepaid and Drawdown Configuration

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Examples of Prepaid and Drawdown Configuration

To facilitate your understanding of how to set up the prepayment and drawdown charges for different use cases, the examples of the Prepaid Drawdown configurations are provided.

Example 1: One-time Prepayment Charge and Recurring Drawdown Charge

Company Z offers a service with a recurring charge of $100/month and will allow customers to apply a prepayment of $600 to their account with a negative prepaid balance.  

Set up the Prepayment

  1. Navigate to Products > Product Catalog and click the desired product from the product catalog.
  2. Click add rate plan to add a new rate plan.
  3. Enter the Name, Effective Start Date, and Effective End Date of the rate plan.
  4. Add a new one-time charge to the created product rate plan.
  5. Complete the charge configuration.
    Section Field Value
    Name Charge Name
     
    Prepayment
    PPDD Type Prepayment
    PPDD Balance Location Account 
    PPDD Ignore Negative Invoice Items No
    Charge Amount Charge Model Flat Fee Pricing
    List Price 600.00
    Extension Link with Prepaid Drawdown
    Timing and Frequency of Charge Trigger Condition Select a trigger condition that aligns with your business requirements.
    Finance Revenue Recognition Rule Select a rule that aligns with your accounting requirements.
    Revenue Recognized Select the accounting code for the recognized revenue based on your accounting requirements.

Set up Drawdown

  1. For the same product, add or edit a recurring charge of the product rate plan.
  2. Complete the charge configuration. 
    Section Field Value
    Name PPDD Reason Code Drawdown
    PPDD Allow Negative Prepaid Balance Yes
    PPDD Ignore Discounts For Balance Calculations No
    PPDD Use Prepayment on Discounts Yes
    PPDD Use Prepayment on Taxes Yes
    PPDD Balance Location Account 
    PPDD Type Drawdown
    PPDD Ignore Negative Invoice Items No
    Extension Link with Prepaid Drawdown

Example 2: Recurring Semi-Annual Prepayment Charge and Recurring Semi-Annual Drawdown Charge

Company Z offers a service with a recurring charge of $600 semi-annually and will allow customers to apply a prepayment of $600 semi-annually to their account with a negative prepaid balance.  

Set up the Prepayment:

  1. Navigate to Products > Product Catalog and click the desired product from the product catalog.
  2. Click add rate plan to add a new rate plan.
  3. Enter the Name, Effective Start Date, and Effective End Date of the rate plan.
  4. Add a new recurring charge to the created product rate plan.
  5. Complete the charge configuration.
    Section Field Value
    Name Charge Name
     
    Prepayment
    PPDD Type Prepayment
    PPDD Balance Location Account 
    Charge Amount Charge Model Flat Fee Pricing
    List Price 600.00
    Extension Link with Prepaid Drawdown
    Timing and Frequency of Charge Trigger Condition Select a trigger condition based on your business requirements.
    End Date Select an end date based on your business requirements.
    Billing Period Semi-Annual
    Billing Timing In Advance 
    Billing Day Select a billing day based on your business requirements.
    Billing Period Alignment: Default to "Align to Charge".
    Finance Revenue Recognition Rule Recognize Upon Invoicing
    Revenue Recognized Select the accounting code for the recognized revenue based on your accounting requirements.

Set up the Drawdown:

  1. For the same product, add or edit a recurring charge of the product rate plan.
  2. Complete the charge configuration. 
    Section Field Value
    Name PPDD Reason Code Drawdown
    PPDD Allow Negative Prepaid Balance Yes
    PPDD Ignore Discounts For Balance Calculations No
    PPDD Use Prepayment on Discounts Yes
    PPDD Use Prepayment on Taxes Yes
    PPDD Balance Location Select either Account or Subscription based on your business requirements
    PPDD Type Drawdown
    Extension Link with Prepaid Drawdown
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