Credits and Commits

credits and commits is nue’s approach to managing credits and commits in recurring billing it enables flexible commercial models — including prepaid, postpaid, and hybrid structures — while maintaining accurate revenue recognition, credit tracking, and integration with third party usage data through credits and commits, nue ensures that billing, accounting, and usage consumption are aligned across a wide variety of business scenarios — from prepaid credit packages to committed spend agreements and one time credit adjustments credit related revenue models nue supports three primary credit related revenue models credit burndown customers purchase credits in advance, and usage consumes those credits over time revenue is deferred until credits are used this model supports predictable billing with consumption flexibility — commonly used for api access, cloud services, or prepaid saas usage commits customers agree to a minimum spend commitment over a specific period (e g , monthly, quarterly, or annually) revenue is recognized over time or based on usage, and if actual usage is below the committed amount, the customer is billed for the shortfall this model suits enterprise saas or ai infrastructure contracts with predictable recurring revenue targets one time credits one time credits are issued for temporary adjustments , promotions , or service compensations they can apply on top of both credit burndown and commit models, allowing flexible crediting and balance management comparison of revenue models the following table shows a comparison of these credit related revenue models aspect credit burndown (prepaid) commits (postpaid for underspend) one time credits nature prepaid consumption model postpaid commitment model ad hoc / promotional revenue recognition deferred until credits are consumed recognized ratably or based on usage and commitments upon redemption or usage customer billing timing (typically) prepaid periodic (e g , monthly/annual) on issuance or application credit pool access can apply to both both credit and cash pools can apply to only cash credit pool can apply to both pools multi currency support supported via cash credit pool supported via cash credit pool supported if tied to cash pool credit expiration defined by subscription term defined by committed periods monthly, quarterly, semi annual and annual typically short term within the lifecycle start date and lifecycle end date usage impact offsets prepaid balance credit pool offsets rated usage only; cash pool offsets all types of charges (subscriptions, services and usage) offsets all types of charges against remaining commits offsets recurring services (subscriptions) or usage accounting treatment deferred revenue until consumed accrued or recognized over time immediate or upon redemption ideal use case prepaid credits for recurring usage committed spend agreements adjustments, rebates, promotion the credit burndown model is typically billed in advance; however, nue offers flexibility — if a contract requires billing and payment in arrears, nue’s billing engine can fully support that configuration example scenarios the following table contains example scenarios for 3 different revenue models scenario model used example prepaid usage across multiple service dimensions credit burndown a snowflake style model where a customer prepays for a credit balance (e g , $10,000 worth of credits) as usage occurs across multiple services — such as api calls, compute (cpu) time, cloud storage, and query executions — each service type consumes credits at its own conversion rate, all drawing down from the same unified credit pool nue tracks these different usage metrics and applies the corresponding credit conversions automatically unified recurring and usage billing under a commitment commits an ai company offers a contract where customers commit to $50,000 per quarter subscription fees (for platform access) are billed as recurring revenue, while api token usage is billed based on consumption both types of charges burn against the same commit cash pool , ensuring that prepaid or committed funds are applied holistically across both recurring and usage based items nue automatically reconciles these charges to track commit utilization and underspend customer receives service credit one time credit a $1,000 promotional credit is issued following a service issue or as part of a marketing incentive the credit can be applied to either prepaid or committed spend, depending on contract configuration credit pools credit pools are the foundation of nue’s credit management system they track available balances and govern how usage is applied across prepaid and postpaid models there are two types credit type credit pool non monetary credits (e g , promotional or granted credits) cash type credit pool monetary credits purchased or committed in actual currency please note that credit burndown and one time credits can draw from both the credit and cash credit pools commits can draw only from the cash credit pool the cash credit pool supports multi currency balances , enabling global and regional account management nue supports multiple credit type or cash type credit pools check out multiple credit pools docid\ xvnmn apkl0hmhplaiqhr for more details nue’s cash credit pool supports multi currency transactions, allowing credits to be denominated and consumed in different currencies integration with third party usage systems credits and commits integrate seamlessly with external usage systems such as apis, analytics platforms, or third party billing systems usage data can be ingested into nue and automatically applied to relevant credit balances or committed spend contracts this allows real time consumption tracking automatic credit balance updates commit fulfillment and underspend reporting accurate and auditable revenue allocation credit rollover credit rollover allows unspent credits from one billing period or committed credit period to carry over into the next period this is particularly useful for multi period contracts or customers with variable consumption patterns nue supports configurable rollover policies, including full rollover 100% of unused credits carry forward partial rollover a capped or percentage based amount rolls over time limited rollover rolled credits expire after a defined duration rollover policies can differ by customer, product, or revenue model, and are tracked automatically in nue’s credit ledger credit cash out credit cash out occurs when a customer’s contract is paid in full and unused cash credits are converted into a credit memo or equivalent financial instrument accounting and compliance all credits and commits models are designed to comply with asc 606 standards for revenue recognition via our integration with revenue recognition vendors prepaid credits (credit burndown) are recognized as deferred revenue until consumed commits are recognized ratably over the term or based on actual usage one time credits are recognized at issuance or redemption, depending on configuration nue maintains a complete audit trail for all credit and commit transactions, ensuring transparency for finance and compliance teams