Understand Prepaid Subscriptions

Prepaid Subscriptions in Advanced Billing allow you to offer usage-based pricing while collecting payment in advance. With prepaid billing, Customers fund a Subscription before usage occurs, reducing revenue risk and improving cash flow predictability.

Each prepaid Subscription maintains a prepayment balance. Usage is deducted from this balance in real time as it is reported to Advanced Billing. You can configure a prepaid Subscription with:

• An initial balance collected at signup
• Optional auto-refill settings that automatically replenish funds when the balance drops below a defined threshold

Prepaid Subscriptions provide the flexibility of usage-based pricing for Customers while ensuring funds are collected before service delivery.

Prepaid Subscriptions use the prepaid collection method.

Prepaid Subscriptions are available to Merchants using Relationship Invoicing architecture. You select the prepaid collection method during Subscription setup.

Payments for prepaid Subscriptions are collected via credit card. Each prepaid Subscription must have a valid credit card on file.

A prepaid Subscription is created in an active state once the initial prepayment is successfully processed. If the balance reaches $0 or below, the Subscription transitions to a suspended state until additional funds are added.

Suspended Subscriptions can be:

• Reactivated by applying a new prepayment
• Canceled, like other Subscription types

Usage

Unlike other Subscription types in Advanced Billing, where metered components are billed at the end of the billing period, prepaid Subscription usage is deducted from the prepayment balance in real time.

At renewal, an Invoice is generated summarizing all usage recorded during the billing period.

You can view total usage for the current period in the Subscription’s Prepayments tab.

Prepayment Balance

The prepayment balance equals total prepayments collected during the current billing period minus recorded usage.

For example, if a Subscription has a $100 prepayment and $50 in recorded usage, the remaining balance is $50.

Auto-refill is triggered when the balance drops below the configured minimum balance. As usage increases:

• The remaining balance decreases
• Usage for the current period increases

As usage increases, the prepayment balance decreases.

If auto-refill is enabled, the credit card on file is charged to restore the balance to the refill amount. The Usage This Period value continues to increase throughout the billing period.

Both the current balance and usage are displayed at the top of the Prepayments tab and are available via the API.

Funding Options

Prepaid Subscriptions support two funding configurations. These configurations rely on four key settings:

Prepaid configuration settings control when and how prepayments are collected.

You can update funding settings at any time. You may enable or disable auto-refill and modify the refill amount or minimum balance.

Initial Charge

The Initial Charge is the prepayment amount collected at signup from the credit card associated with the Subscription.

This value may be $0 when importing prepaid Subscriptions. In that case, the Subscription is created in a suspended state.

If auto-refill is enabled, the Initial Charge must be greater than or equal to the minimum balance.

Amount charged when the Subscription is created.

Auto-Refill

Auto-refill, also referred to as auto-replenish, automatically collects additional funds when the balance drops below the minimum balance. No manual action is required.

Auto-refill automatically replenishes the prepaid balance.

Minimum Balance

The minimum balance defines the threshold that triggers auto-refill. It must:

• Be greater than $0
• Be less than or equal to the refill amount

Balance threshold that triggers a refill.

Refill Amount

When the balance drops below the minimum balance, the system charges the amount required to restore the balance to the refill amount.

Target balance after auto-refill.

Suspension and End of Life

If the prepayment balance reaches $0 or below, the Subscription automatically transitions to suspended.

A Subscription may become suspended if:

• Auto-refill is disabled and usage exceeds the balance
• Auto-refill is enabled but the replenishment payment fails

Prepaid Subscriptions are not marked as past due. Instead, their dunning status appears in the Subscription’s Dunning tab.

If you cancel a prepaid Subscription immediately, the remaining balance is automatically refunded to the Customer.

Supported Catalog

Prepaid Subscriptions are designed for usage-based billing with metered or events-based components. In practice, the associated product typically has a $0 recurring price.

Prepaid Subscriptions:

• Cannot be attached to products with trials
• Must have net terms set to 0

Renewal Dates and Invoices

On each renewal date, Advanced Billing generates an Invoice summarizing activity for the billing period, including:

• Starting balance
• Total usage
• Prepayments collected
• Ending balance

No payment is due at renewal. However, applicable tax is calculated on the Invoice.

Renewal Invoices summarize usage and prepayments for the period.

Prepaid Subscription Dunning

Prepaid Subscriptions have a configurable dunning process. If an auto-refill payment fails, Advanced Billing retries the charge based on your configured dunning strategy.

Retry attempts occur once per day for the number of days defined in your settings. You may also enable email notifications using customizable templates.

Retries are scheduled once per day according to your dunning configuration.

While dunning is active, the Subscription remains active until the balance is depleted. It will not be marked as past due. Instead, it displays a temporary status of Prepaid Dunning, which you can use as a filter.

Once the balance is depleted, the Subscription moves to suspended. You may reactivate it with a new prepayment or cancel it.