Prepaid with Drawdown is part of the Advanced Consumption Billing feature. You need to purchase the feature to use it. Contact your Zuora Customer Success Manager for assistance.
The Prepaid with Drawdown feature is a pricing model for consumption-based services, such as data storage.
Under this model, customers can either purchase a prepayment balance in currency or a number of units, usually for a period of time like a month or a year. Then they consume against that prepayment balance in a use-it-or-lose-it fashion, with a possibility of topping up more units or being charged for any overage. This model strikes a balance between upfront commitment and the pure pay-as-you-go pricing models.
Prepayment charges will not be prorated regardless of the proration billing rules for recurring charges.
To create a prepaid type of subscription service, in your Product Catalog, you need to create product rate plans that contain a prepayment charge and a corresponding drawdown charge. The prepayment and drawdown charges do not need to be in the same product rate plan.
- One-time and recurring charges can be used as prepayment charges to create the prepaid balance.
- Prepaid charges can be either currency or unit based.
- For unit based, each UOM under a subscription will create an independent prepaid balance.
- For currency based, only one prepaid balance will be created, with the same currency as the subscription.
- Each charge will create at least one fund under the prepaid balance.
- Usage charges must be used to draw down the prepaid balance.
- For currency based prepaid charge, the corresponding drawdown charges must also be currency based and Usages will be rated prior to draw down.
- For unit based prepaid charges, drawdown charges should be unit based and will draw down units directly. Draw down will occur if the drawdown UOM is the same as the prepayment UOM.
- For unit based, usage charges’ UOM can be different from the drawdown UOM. In this case, you should set the drawdown exchange rate so that the proper quantity of the drawdown UOM is drawn down. For example, various services might draw down “Credits”, and there will be a drawdown rate between “Reports” consumed and equivalent “Credits” to be drawn down.
- Multiple usage charges can draw down the same prepaid balance; the drawdown happens from one fund to another, one by one. And only when one fund is consumed, draw down will continue from another fund, if available. The drawdown sequence is determined by the business start date and the fund creation date.
The following requirements needs to be met before you can use this feature:
- Orders or Orders Harmonization should be enabled.
- If you are using Orders Harmonization,
- you must turn on the "Auto-renew by Order" Billing setting.
- you must use order to create prepaid with drawdown subscriptions.
- If you are using Zuora CPQ, you must turn on the “Enable Order for CPQ” Billing setting.
- To use currency based Prepaid with Drawdown, you must first enable Unbilled Usage. If Unbilled Usage is enabled, the isPrepaid field is replaced by Charge Function. You will also see the Commitment Type.
Use cases supported by Prepaid with Drawdown
With this feature enabled, you have access to the following capabilities:
Notes and limitations
The Prepaid with Drawdown feature currently has the following general known facts and limitations:
- This feature deals with non-cash units (for example, GB, Seats, Minutes, or Virtual Currency). Prepaying and holding cash on account uses the dedicated Prepaid Cash with Drawdown feature.
- Suspend a subscription, Resume a subscription and Change the owner of a subscription order actions are not yet supported. Note that invoice ownership transfer is supported.
- Order Line Item is not yet supported.
- Prepayment charges are not supported with an evergreen subscription.
- Drawdown charges are not supported by subscription preview for now.
- The Delivery Pricing charge model is not supported.
- Prepaid Validity Period Summary Data Source supports configuring one or more percentage values or fixed numbers of quantity at the validity period level as thresholds and sending notifications when the remaining balance reaches the thresholds.
- Prepaid with drawdown prepayment charges are incompatible with subscription pending, as the effective date for prepaid with drawdown funds is required. Also, you cannot change the term start date when a subscription is created with a prepayment charge.
- You can perform the following operations anytime in a validity period:
- Cancel a prepayment subscription
- Remove a prepayment charge from a prepayment subscription
- Charge the term of a prepayment subscription
However, the following limitations will be applied:
- Before performing the above operations, ensure all the billing periods within the validity period are billed.
- If a validity period of the prepayment subscription contains multiple billing periods and the credit option of the recurring prepayment charge is set to “Consumption Based”, when no drawdown usage is uploaded to the validity period, you cannot perform the above operations.
- Currency based PPDD requires unbilled usage, so the supported usage charge models are the same as unbilled usage. Check the supported charge models.
- Prepaid with Drawdown FAQs
- Prepaid with Drawdown Troubleshooting
- Product Rate Plan Charge Data Source
- Product Rate Plan Charge Object Reference
- Rate Plan Charge Data Source
- Usage Data Source
- Usage Object Reference
- Import Usage Data
- Prepaid Balance Fund Data Source
- Prepaid Validity Period Summary Data Source