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

Navigate to Products > Product Catalog, and then select the desired product.
Click Add rate plan to create a new rate plan.
Enter the Name, Effective Start Date, and Effective End Date of the rate plan.
Add a new one-time charge to the product rate plan.
Complete the charge configuration using the following values:

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
Charge Amount	List Price	600.00
Extension	Extension Link	Prepaid Drawdown
Timing and Frequency of Charge	Trigger Condition	Select a trigger condition that aligns with your business requirements.
Timing and Frequency of Charge	Revenue Recognition Rule	Select a rule that aligns with your accounting requirements.
Finance	Revenue Recognition Rule	Select a rule that aligns with your accounting requirements.
Finance	Revenue Recognized	Select the accounting code for the recognized revenue based on your accounting requirements.

Set up the Drawdown

For the same product, add or edit a recurring charge of the product rate plan.
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	Extension Link	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

Navigate to Products > Product Catalog, and then select the desired product.
Click Add rate plan to create a new rate plan.
Enter the Name, Effective Start Date, and Effective End Date of the rate plan.
Add a new recurring charge to the created product rate plan.
Complete the charge configuration using the following values:

Section	Field	Value
Name	Charge Name	Prepayment
	PPDD Type	Prepayment
	PPDD Balance Location	Account
Charge Amount	Charge Model	Flat Fee Pricing
Charge Amount	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.
	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 Invoicin
Finance	Revenue Recognized	Select the accounting code for the recognized revenue based on your accounting requirements.

Set up the Drawdown

For the same product, add or edit a recurring charge of the product rate plan.
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