Overview

Additional cost

To access theses features or settings, you must have an active subscription to either the Recurly Revenue Recognition Advanced or the Standard edition. For further information on pricing and how to enable this feature on your account, please contact your Recurly account manager directly, or reach out to us at [email protected].

Prerequisites

• Cancellation and refund policy that supports account crediting.

Limitations

• Prepayment credits can only be used for future purchases and cannot be refunded.
• Goodwill credits are non-transferable and must be used within the issuing account.
• Credits may have expiration dates or usage conditions, depending on the business policy.

Key benefits

• Streamlined revenue recognition: Incorporating credits into revenue reports enhances financial accuracy by reflecting real-time customer balances and potential future sales.
• Enhanced financial reporting: Credits contribute to a more comprehensive view of financial health, allowing for precise revenue tracking and forecasting in revenue recognition reports.
• Increased operational efficiency: The management of credits through automated systems simplifies the reconciliation process, ensuring that credits are accurately reported in financial statements, improving overall financial transparency and compliance.

Key details

Goodwill credit

Goodwill credit represents a balance added to a customer's account as an acknowledgment of their importance to the business. Utilized to address service issues, reward loyalty, or compensate for inconveniences, it plays a crucial role in maintaining positive customer relationships. Importantly, goodwill credits are seamlessly integrated into revenue recognition reports, allowing businesses to accurately reflect these balances and their potential impact on future revenue.

To support business growth and enhance customer satisfaction, companies can issue goodwill credits. These credits serve as a balance in the customer's account, applicable towards future purchases.

When goodwill credit is allocated, Recurly generates a credit invoice, reflecting the credit balance which can be adjusted against subsequent payments. This process not only simplifies account management but also ensures transparency in financial transactions.

The allocation and redemption of goodwill credits are accurately documented, facilitating seamless financial reporting. Credits are recorded as a single line in revenue recognition reports, with redemptions detailed separately. This clear delineation helps businesses track credit usage and its impact on financial health.

The following table outlines the identifiers for goodwill credit transactions:

In instances where goodwill credit is issued erroneously or remains unused, it can be voided, removing the balance from the customer's account. This action, along with all other credit transactions, is recorded in Revrec, ensuring comprehensive financial oversight.

On-account credit

On-account credit is issued in lieu of cash refunds when a customer cancels a subscription. This approach not only retains the customer's engagement by encouraging the use of credits for future purchases but also facilitates the financial reporting process. By converting refunds into on-account credits, businesses can more accurately track and report these balances in their revenue recognition reports, enhancing financial transparency and insight.

When a customer's subscription is canceled and a refund is issued, Recurly can credit the customer's account instead of providing a refund. This on account credit can be utilized for any future purchases within Recurly's platform.

Upon issuing on account credit, Recurly generates a credit invoice, reflecting the credited amount and any subsequent redemptions. The invoice is updated to show the remaining balance of the credit, offering transparency and ease of tracking for both the customer and the business.

Credit invoice example

The credits and their redemptions are recorded in Revenue Recognition as distinct entries, allowing for clear financial tracking and reporting. These entries are categorized based on their origin (credit-event) and specified by unique plan codes, enabling easy identification and reconciliation.

Accounting table for on account credits

This feature not only enhances customer satisfaction by providing flexible refund options but also streamlines financial processes, making it a valuable tool for businesses looking to improve their subscription management and accounting practices.

Prepayment credit

Prepayment credit offers customers the option to pay in advance for future services or products, benefiting both the customer for convenience and the business for financial stability. This method is integral to Recurly's revenue recognition strategy, as it ensures that prepaid amounts are accurately recorded and applied to future transactions in financial statements. The systematic tracking and reporting of prepayment credits in revenue recognition reports streamline accounting processes and improve financial forecasting.

Customers are encouraged to make advance payments, known as prepayment credits, which are then applied to future purchases. This process involves the issuance of two invoices in Recurly: one acknowledging the payment and the other representing the credit.

Payment invoice

Credit Invoice

Prepayment credits are integrated into the Revenue Recognition (RevRec) system as a single Sales Order (SO) line, accompanied by two invoices. Adjustments to the credit are recorded as new lines, identifiable by their origin and plan code.

Customers can view their total credit balance in Recurly, which is equal to the total sell price of the credit lines. This balance is visible in the customer information section.

Through prepayment credits, Recurly provides a flexible and efficient way for businesses and customers to recognize and manage advance payments, offering benefits such as improved cash flow, convenience, and simplified billing processes.