Prepaid with Drawdown

The Prepaid with Drawdown feature in Zoho Billing lets you collect payments from customers in advance and deduct charges from their prepaid balance as they use your products or services.

This model is ideal for businesses that offer usage-based services such as cloud storage, communication credits, utilities, or APIs where consumption varies each cycle. By using Prepaid with Drawdown you can secure revenue upfront, and reduce the effort of frequent invoicing.

How it Works

1. Create Prepaid Plan and Drawdown

You create prepaid plans which your customers can purchase according to their needs. You also create drawdown to define how purchased credits are deducted.

2. Customer Purchases Prepaid Credits

When a customer subscribes to a prepaid plan, the purchased credits become available as their prepaid balance.

3. Usage Is Tracked

As the customer consumes services, you can record the usage in Zoho Billing. The recorded usages are deducted from the customer’s prepaid balance.

Enable Prepaid with Drawdown

Here’s how to enable Prepaid with Drawdown:

• Go to Settings.
• Select Billing Preferences under Subscriptions in the Module Settings pane.
• Slide the toggle next to Usage Billing to Enabled.
• Mark the Prepaid Billing with Drawdown Model option.

Prepaid with Drawdown will be enabled in your organization.

Create a Prepaid Plan

Prepaid plans allow customers to pay upfront and use them for your services as needed.

Here’s how to create prepaid plans:

• Go to Plans under Product Catalog.
• Navigate to the All Plans tab and click + New to create a new plan.
• Select the product for which the plan is created.
• Mark This is a prepaid plan under Plan Name.
• Enter all the necessary details.

Rollover Preferences

You can choose to allow customers to use the unused units from the previous billing cycle in the next billing cycle or let them expire.

• Navigate to the Pricing tab.

• If you don’t want the units to be rolled over, select Don’t Allow Rollover in the Rollover Preference dropdown and click Save. The units will be expired if they remain unused at the end of the cycle.

• If you want the units to be rolled over, select Allow Rollover in the Rollover Preference dropdown.

  • Set the period for which unused units from a billing cycle remain valid in the Rollover Period field.
  • Select if the rolled-over units should be used before or after the current billing cycle’s units in the Rollover Usage field.

    Option	Description
    Apply Unused Units First	The unused units from the previous billing cycle will be exhausted before applying the new cycle’s units.
    Apply Unused Units Last	The current billing cycle’s units will be used first. Rolled-over units will only be applied after the current cycle’s units are exhausted.

• Click Save.

Prepaid Recurring Addons

You can also create a prepaid recurring addon and associate it with a plan.

• Go to Addons under Product Catalog.
• Click + New to create a new addon.
• Select the product for which the addon is created.
• Choose Prepaid in the Usage Billing Type dropdown.
• Configure the rollover preferences in the Pricing tab.
• Enter the necessary details.
• Click Save.

You can associate the addon to a plan if the customers require extra credits in addition to the credits available in their plan on a regular basis.

Create Drawdown Credits

Drawdown credits refers to a prepaid balance that is gradually reduced as a service or products are used.

Here’s how to create a drawdown credit:

• Go to Addons under Product Catalog.
• Click + New to create a new drawdown.
• Select the product for which the drawdown is created.
• Choose Drawdown in the Usage Billing Type dropdown.
• Enter all the required fields.

Configure Conversion Rates in Drawdown

If the unit of the prepaid credit is different from the drawdown credit. You can adjust the drawdown by setting up a conversion rate between the two units.

Here’s how to setup a conversion rate between two units:

• Navigate to the Pricing tab.
• Select or add the unit of the drawdown in the Unit Name field.
• Select or add the unit of the prepaid plan in the Drawdown Unit Name field. This unit will be used to record the drawdown.
• Enter how many units of the prepaid credit is equivalent to one unit of drawdown credit in the Drawdown Rate field.
• Click Save.

Create a Prepaid Subscription

Here’s how to create a subscription with a prepaid plan:

• Go to Subscriptions under Sales.

• Click + New.

• After selecting the product, select a prepaid plan under Plan.

• Select a drawdown credit under Addons.

  Note: When you create a prepaid subscription, it is mandatory to associate a drawdown credit along with a prepaid plan.

• Enter the other necessary details.

• Click Continue to create the subscription.

Now the customer’s prepaid credits are available for usage and can be managed through drawdown credits.

Record Usage

Usage records allow you to manually deduct service consumption from a customer’s prepaid balance to keep it accurate.

Here’s how to deduct usage from a prepaid balance:

• Go to Subscriptions.

• Select the subscription in which you want to record usage.

• Navigate to the Usage Records tab and click + Add Usage.

• Select a drawdown, enter quantity and choose start and end date.

  Note: You can choose the start and end dates for the drawdown only within the subscription period.

• Click Save to record usage.

Now, the corresponding number of units is reduced from the customer’s prepaid balance.

Status of Recorded Usage

These statuses show whether usage has been applied to a customer’s prepaid credits.

Various Scenarios Where You Can Use Prepaid with Drawdown

The Prepaid with Drawdown feature can be used across multiple industries and service models. Below are some common scenarios and how each can be implemented using prepaid credits, drawdowns, and subscriptions.

Scenario 1: AI(Artificial Intelligence) Platforms Using Prepaid Models

Brandon runs Zylker AI, an AI-powered conversational platform that allows users to interact with chatbots, generate text, or create images. Zylker AI often operates with variable consumption-based pricing, which is complex to track and bill after usage. So Zylker AI uses Prepaid with Drawdown in Zoho Billing to bill their customers.

How Zylker AI Uses Prepaid with Drawdown:

1. Brandon creates a prepaid plan where customers can purchase a set number of chat credits upfront. Each credit represents a specific unit of AI service usage such as sending messages or generating images. Customers can buy credits in different bundles depending on their expected usage.
2. He then creates drawdown credits to deduct credits for each action performed on the platform. As customers use the platform, credits can be deducted based on their activity.
3. Next, he configures conversion rates in the drawdown to define how many credits are used for a type of request (e.g., 1 credits = 1 image generation). Likewise, he creates various drawdowns to define each type of request. For example,

4. Finally, Brandon creates a prepaid subscription for the customers and records usage as the customers use the platform.

Scenario 2: Telecommunications and Internet Service Providers Using Prepaid Models

Larissa runs Zylker Telecomm, a telecommunication and internet service provider (ISP) that charges for call minutes, messages, and data. Instead of billing customers at the end of each cycle, Zylker Telecomm wants to collect payment upfront, allowing customers to control spending while securing revenue in advance. So Zylker Telecomm uses Prepaid with Drawdown in Zoho Billing to offer their prepaid consumption-based services.

How Zylker Telecomm Uses Prepaid with Drawdown:

1. Larissa creates prepaid plans for Voice, SMS, and Data Bundles (e.g., 500 minutes for $10 and 10 GB for $15) to offer customers a variety of prepaid options based on their usage needs. Customers can choose plans that match their budget and consumption, with options to purchase addons or upgrade anytime.
2. Since some customers might need extra data regularly in addition to what is provided in the plan. She creates a prepaid recurring addon that offers extra data (e.g., 5GB for $7).
3. She creates drawdown credits to deduct usage from prepaid balances. As customers use various services, credits can be deducted.
4. Then, she creates a prepaid subscription for the customers and records usage as the customers use the service.

Scenario 3: IoT (Internet of Things) Services Using Prepaid Models

Eduardo runs Zylker IoT, an IoT service provider that charges customers for connected devices, transmitted data packets, or sensor readings. Eduardo uses prepaid billing in Zoho Billing to simplify the complex, variable consumption patterns. Since IoT devices often operate intermittently or transmit data at irregular intervals, prepaid balances allow Eduardo to efficiently manage billing while giving customers predictable, flexible pricing.

How Zylker IoT Uses Prepaid with Drawdown:

1. Eduardo creates prepaid plans for data packets and device hours (e.g., 100,000 data packets for $50 and 1,000 device operating hours for $100). Customers can choose a prepaid plan that matches their deployment size and expected data frequency.
2. Since many IoT devices like environmental sensors, smart meters transmit data only periodically Eduardo decides to allow unused prepaid units to rollover to the next billing cycle.
3. He creates drawdown to deduct credits as customers’ devices transmit data or connect to the network.
4. Then, he creates a prepaid subscription for the customers and records usage as the customers use the service.

Was this document helpful?

Yes

No

Was this document helpful?

Enter your comments or feedback on this page

Enter your email address

By clicking Submit, you agree to our Privacy Policy .

Submit Cancel

Submit

Submit

Thank you for your feedback!