Prepayment credit is an advance payment made by a customer for future purchases or subscriptions. The credit is stored in the customer's account and automatically applied to invoices as they're generated — simplifying payment and flowing accurately into RevRec for revenue tracking and forecasting.

Available as part of Recurly RevRec

1Definition 2Key benefits 3Key details 4FAQ

Additional costTo access this feature, you must have an active subscription to either Recurly RevRec or the Standard edition. Contact your Recurly account manager or [email protected] for pricing details.

Prerequisites

A cancellation and refund policy that supports prepayment crediting.

Limitations

Prepayment credits can only be used for purchases and can't be refunded.
Specific configurations may restrict the use of prepayment credits for certain plans or products.

Definition

Prepayment credit refers to an advance payment made by a customer for purchases or subscriptions. This credit is stored in the customer's account and automatically applied to invoices as they're generated, simplifying the payment process.

Key benefits

Streamlined revenue recognition Incorporating prepayment credits into revenue reports enhances financial accuracy by reflecting real-time customer balances and potential sales.

Enhanced financial reporting Prepayment credits contribute to a more comprehensive view of financial health, enabling precise revenue tracking and forecasting.

Increased operational efficiency Automated management of prepayment credits simplifies reconciliation and ensures credits are accurately reflected in financial statements.

Key details

When a customer makes a prepayment, Recurly issues two invoices: one acknowledging the payment and one representing the credit balance.

Payment invoice

Credit invoice

Prepayment credits appear in RevRec as a single Sales Order (SO) line with two invoices. Adjustments to the credit are recorded as new lines, identifiable by their origin and plan code.

Origin	Activity	Plan code
credit-event	Prepayment credit issued	`credit-prepayment`
credit-event	Prepayment credit redeemed	`credit-prepayment-redeemed`
credit-event	Prepayment credit voided	`credit-prepayment-voided`

Customers can view their total credit balance in Recurly — equal to the total sell price of the credit lines — in the customer information section.

FAQ

What makes a prepayment credit different from the other two credit types?

A prepayment credit is funded by the customer. They pay in advance, and that amount is held as a credit balance to use on future subscriptions or purchases.

Why do I see two credit-event invoices in Recurly when a prepayment credit is issued?

Two invoices are created to make the accounting clear:

Payment invoice: Acknowledges receipt of the customer's advance payment.
Credit invoice: Converts that payment into a usable credit balance on the customer's account.

How are prepayment credits and their adjustments tracked in RevRec?

Filter for origin = credit-event and use these plan codes:

Credit issued: credit-prepayment
Credit used/redeemed: credit-prepayment-redeemed
Credit canceled/voided: credit-prepayment-voided