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Tutorial/Usage Accelerator

One-time Credits

Introducing the "One-time Credits" revenue model: a practical solution for businesses needing prepaid services. With this model, businesses can sell prepaid credits as deposits, which customers can later use towards future invoices. These credits may have expiration dates or remain valid as long as the customer continues their relationship with the company. Additionally, credits can be restricted to specific products or services, offering businesses greater control over resource allocation.

One-time Credits vs. Credit Burn-down

Similar to the Credit Burn-down usage model, when customers purchase One-time Credit products or services, the corresponding credits are deposited into a designated credit or cash-type credit pool. However, the Credit and Credit Burn-down represent two very different approaches to managing prepaid services.

The "Credit" model operates on a singular, upfront basis, where customers purchase credits as deposits to be used towards future invoices. These credits may or may not expire, depending on the terms of the arrangement.
The "Credit Burndown" model follows a recurring revenue structure, where a set number of credits are periodically added to a pool—monthly, quarterly, or annually. These credits have a predefined, recuring lifecycle. Customers then use these credits within the specified timeframe, ensuring a continuous flow of revenue for the business.

Ultimately, while both models offer prepaid flexibility, the distinction lies in their timing and recurrence, catering to different business needs and customer preferences.

How One-time Credit Works

Similar to the Credit Burndown model, products with Credit revenue model are designed for customers to add credits to a Credit Pool. Credits in a credit pool can be later consumed by usage, or be converted to credit memos and applied to invoices.

Upon activation of an ordered product containing a Credit-type item, an Asset or Entitlement is generated for the customer, signifying the one-time credit. This asset or entitlement includes a Lifecycle Start Date and a Lifecycle End Date inherited from the ordered product, delineating the period during which the credit is accessible for use.

At the same time, the credit amounts, whether in Cash or Credit, are deposited into the associated Credit Pool linked to the Credit-type product. A Credit Inflow record is then created to track this deposit. Starting from the Lifecycle Start Date, the credits can either be automatically used for rated usage or converted into credit memos, subsequently applied to invoices.

Notably, credits within a credit pool are only consumable by usage or invoice items associated with the same credit pool.

The following diagram illustrates this flow.

NOTE

In a system, there can be more than one Credit or Credit Burndown products that accumulate credits, and more than one products that consume credits. All transactions are being processed through the Credit Pool and are recorded as Credit Inflow and Credit Outflow.

Enable Credit

PERMISSIONS REQUIRED

The following permissions are required in the user role:

Billing Schedule
- Manage Credits

Credit Type and Credit Pool

Admin users can enable the Credit feature by configuring the following settings:

Login to Nue App and navigate to Settings → Credits
Set the Default Credit Type.
- Credit Type indicates the type of credit your organization issues to your customers.
- There are 2 supported credit types: Credit and Cash. The Credit Type determines whether the credit pool stores credits, or cash.
Set the Default Credit Pool.
- Credit Pool contains credits issued to the customer. Each customer may have one or more credit pool.
- The default credit pool is used to store credits if no specific pool is specified.

Credit Options

Admin users can also configure additional Credit options:

Credit Name

Admin users can rename the credits, for example, Deposits, Points, etc.

Click on the Edit icon next to the Credit Type setting, and update the name in the popup.

Please note that option "Rollover unused credits" and "Enable credit proration for partial periods" do not apply to one-time credits.

Enable Credit Tab in the Lifecycle Manager

To enable credit table in the Lifecycle Manager, navigate to Settings → Customer Lifecycle Tabs, and enable Credits.

One-time Credit Scenarios

The example scenario is fictitious and does not represent the actual pricing of any company.

SCENARIO

The company provides a Cloud Infrastructure subscription service. Customers who subscribe to this service are obliged to make a deposit equivalent to one month's subscription fee in advance. This deposit can then be used towards the final month's invoice.

Create Products

First, we navigate to Settings → Credits, and rename the Default Cash Pool to "Cloud Deposits'.

Second, we create the following products:

Product Name	Bundle or Product	Product Category	Revenue Model	List Price	Credit Pool
Cloud Infrastructure	Bundle	Recurring Services	Recurring	$1000 / Month	Cloud Deposits
Deposit	Product	Professional Services	Credit	$1000	Cloud Deposits

For example, the Deposit product looks like the following:

In the Cloud Infrastructure bundle, the Deposit product option has the following properties:

Product Option Type: Add-on Product
Connected to the Bundle Quantity

Our Cloud Infrastructure product looks like the following:

Create and Finalize a Quote

We are now ready to generate a quote for our fictional client, Smart Revenue Inc. Following our usual steps, we navigate through the quote creation process, and add the Cloud Infrastructure bundle into the quote.

Select an opportunity, and click New Quote;
Fill up the Quote Name, and other detials, and click "Save and Next";
In the Line Editor, search for Cloud Infrastructure, and drag the bundle into the line editor;
In the Product Configurator, click 'Confirm'. Now the Cloud Infrastructure as well as the Deposit are both added to the Line Editor.
Change the Start Date to 05/01/2024.
In the Line Editor grid, click the Configure icon on top of the grid to add the following 2 fields into the grid: Lifecycle Start Date and Lifecycle End Date. The Lifecycle Start Date and Lifecycle End Date define the period during which the credit is applicable for usage or invoicing.
Because the deposit will be used towards the last invoice only, we will set the Lifecycle Start Date and Lifecycle End Date to be 04/01/2025 and 04/30/2025 respectively, as shown in the following screenshot.

Click 'Save and Exit'.
On quote details page, click 'Finalize Order', and follow the process to finalize into an order.
On the order details page, click 'Activate' to activate the order.

We can navigate to the Lifecycle Manager of Smart Revenue Inc., and view the newly created Entitlement, as well as the credits provisioned.

Accounts → Select "Entitlements" tab, and you should see Deposit available as a Deposit, with Lifecycle Start Date and Lifecycle End Date.

CONFIGURATION

To configure Lifecycle Start Date and Lifecycle End Date to the Entitlement card, please follow the steps below:

In Salesforce, navigate to Setup
Click 'Object Manager', and select 'Entitlement' object with API Name Ruby__Entitlement__c
Click 'Field Sets', and select to edit field set "Entitlement Fields"
Add Lifecycle Start Date and Lifecycle End Date to the field set.

We can navigate to the Credits tab, and see that $1000 credits have been provisioned with a Credit Inflow record. The Credit Start Date and Credit End Date are provisioned as the Lifecycle Start Date and Lifecycle End Date of the entitlement record. In addition, since the Credit Start Date is set in the future, the credit is currently in Pending status.

Cash Out Credits to Credit Memos

In the customer lifecycle manager, users have the ability to convert unused credits into credit memos. These credit memos can be used for applying to future invoices or for refunding the customer if necessary. To perform this action, it is necessary to switch to a cash-type credit pool and click the 'Cash Out' button. On the confirmation page, users will be able to see the available balance that can be cashed out, and they will have the option to cash out the expired credits as well.

However, there are some restrictions when converting credits to credit memos:

Only cash-type credits can be converted to credit memos. If you switch to a credit-type credit pool, the 'Cash Out' button won't be displayed.
Only paid credits can be cashed out. This means that the invoices containing the items for the credits must be paid before cashing them out. However, unpaid credits can still be used when you upload usage for usage-type subscriptions.

NOTE

Please be aware that the cash-out function is only available when 'Credit Memo' is enabled in your organization.

When converting credits to credit memos, there will be corresponding 'Cash Out' outflows generated in the credit pool. If users choose to include expired credits, the most recent expired credits will be cashed out first. Before cashing out, they will be reissued to the customer, resulting in additional 'Reissue' inflows being generated.

Now, when users navigate to the Credit Memo list in Nue, they will see the converted credit memos.

If users cancel the converted credit memos, the corresponding credits will be returned to the credit pool, and the 'Credit Back' type inflows will be generated accordingly.

Apply Credits to Invoices

When creating a product, users have the option to designate a cash-type credit pool for the product. Then the product can be paid by the credits from that pool directly when activing the product's invoice.

On the invoice activation page, users will have the option to apply any available paid credits to the balance of the invoice for that product. If this option is selected, the credits will be converted to a credit memo and applied to the invoice item accordingly.

NOTE

If a product is not associated with a credit pool, or if the product is of type 'Credit' and 'Credit Burndown', it cannot be paid by the credits when activating any invoices for this product.
Additionally, only active, paid credits are eligible for use on an invoice.

Please note that this feature is only available when 'Credit Memo' is enabled in your organization.

After the invoice gets activated, users should be able to see a credit memo generated with the payment status as 'Applied'.

Now, in the customer lifecycle manager, under the 'Credits' tab, there will be an outflow with a 'Cash Out' type generated accordingly, as the credits are cashed out and paid for the invoice.

Additionally, users can enable the below setting to automatically apply credits to active invoices upon activation:

Login to Nue App
Navigate to System Settings -> Revenue Manager -> Invoices
Enable the setting 'Apply credits to active invoices automatically'

NOTE

Only 'Cash' type credits can be converted and applied to active invoices. If the 'Cash' type credit is not enabled, the setting 'Apply credits to active invoices automatically' will be ignored, and users won't have the option to apply credits on the invoice activation page.