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Prepaid Cash with Drawdown

Zuora

Prepaid Cash with Drawdown

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The Prepaid Cash with Drawdown feature allows you to collect payment from your subscribers and then add the prepaid payment to their customer accounts. Subsequent subscriptions can be configured to consume this “reserved” payment amount upon invoice post or payment run.

This feature helps businesses collect cash in advance and allows customers to identify heavy users of the service. Committed use of the system allows subscribers to purchase products or services at a lower price. 

Availability

The Prepaid Cash with Drawdown feature is in the Early Adopter phase. We are actively soliciting feedback from a small set of early adopters before releasing it as generally available.

Prepaid Cash with Drawdown is part of the Advanced Consumption Billing feature. You need to purchase the feature to use it. Contact your Zuora account team for assistance. After purchase, you need to turn on the Prepaid Cash with Drawdown feature from the self-service interface.

Dependencies

To use this feature, you must have enabled the following features:

How does Prepaid Cash with Drawdown work?

The following briefly describes how Prepaid Cash with Drawdown works:

  1. Use payment schedules or payments to add reserved payments to customer accounts. A new Prepayment field is available on the Payment Schedule and Payment objects to indicate whether the payments created will be counted as the reserved amount of the customer account.
  2. After the reserved payment is added, you can view the reserved payment amount on the customer accounts. The balance is displayed as the Reserved Payment Amount.
  3. Create subscriptions that will consume the prepayment cash balance. A new Prepayment field is available on the Subscription object to indicate whether the subscription will consume the reserved payment amount.
  4. When an invoice is posted, Zuora will first attempt to use the reserved payment amount of the customer account to pay for the due amount. If the reserved amount is less than the invoice balance, a payment will be created to collect the remaining balance.

For example, if you create a 200 USD unapplied payment for a customer account and check the Prepayment field on the payment, you will then see the 200 USD added as the Reserved Payment Amount to the account.

If the subscriber purchases a Prepayment subscription that will cost 20 USD per month, when billing the subscriber for one month's subscription fee, the amount will be paid using the reserved amount. Upon the invoice being posted, the Reserved Payment Amount of the account will become 180 USD.

Tutorial

This section describes how to work with reserved payment and prepayment subscriptions. 

Add reserved payment to customer account

You can use either payments or payment schedules to add reserved payment to customer accounts. Check the Prepayment field when creating the payment or payment schedules.

Note that only the unapplied part of the payment will be added to the reserved payment amount of the customer account.

For detailed instructions on how to create a payment or payment schedule, see Create payments, or Create payment schedules.

After the payment or the payment schedule item is processed, the unapplied amount will be added to the customer account. You can view the total reserved payment amount through the Reserved Payment Amount field on the account. Note that to view the reserved amount on the Customer Account UI, you need to hover over the exclamation icon next to the Unapplied Payment Amount metric field. The reserved payment amount is displayed in the formula that pops up. You can view the detailed composition of the total unapplied payment via the formula.

Create a prepaid cash subscription

You can create a subscription that consumes the reserved amount of an account by selecting the Prepayment field of the subscription. All the charges of the prepayment subscription will consume the reserved amount.

For detailed instructions on how to create subscription, see Create a subscription.

In the example, you can create a prepaid cash subscription that will cost the end user 20 USD per month. 

Bill the prepayment subscription

When running Bill Run against the prepayment subscription, invoices will be generated based on the due amounts for each charge of the subscription.

When you post the invoice, the due amounts will be paid by the Reserved Payment Amount of the customer account.

Refund the reserved payment

To refund the reserved payment, you just need to refund the corresponding unapplied payments following the procedure documented in Refund payments.

Notes and limitations

If the invoice's amount due is greater than the reserved payment amount, the balance will be used to pay first, and the remaining amount will be handled via the common invoice processing procedure.