Create a Sales Invoice or Sales Order (hereafter sales document) containing a Prepaid Service item to charge a Prepaid Service with. This sales document represents the contractual agreement with the customer. Prepaid Service items can also be used in advance in Sales Quotes and thus initially offered to the Customer. They are printed and can be shipped from the Sales Order. Whether or not the sales document is also used for billing purposes depends on whether the prepaid service is of the one-time or recurring type. Both variants are available. They are explained in more detail in this section.
One-Time Prepaid Services
A Prepaid Service can be topped up once to store an amount as credit for a customer. If an item identified as a Prepaid Service is used in a sales document, the Prepaid Service No. to be increased must be selected in the sales line prior to posting. In this case, the Quantity for this sales line is always predefined as 1 and cannot be changed. The increase is then done by the subsequent invoicing.
Posting of One-Time Prepaid Services to deferral accounts
When posting an invoice for a one-time Prepaid Service, the system automatically defers the revenues, i.e. the amount of the sales line is not posted to a revenue account, but to an deferral account. The deferred amounts are later transferred - when the consumption invoice is posted - to the revenue account that belongs to the Gen. Prod. Posting Group of the item used for the receipt (Entry Type=Positive Adjmt. in the Ledger Entry).
General Ledger accounts are controlled through the General Posting Setup. Different G/L accounts can be selected for each combination of Gen. Bus. Posting Group and Gen. Prod. Posting Group.
When an item marked as Prepaid Service is used in a sales document, the Gen. Prod. Posting Group in the sales line is replaced during posting based on the default in the Gen. Prod. Posting Group Deferrals field from the Prepaid Services Setup. The customer's Gen. Bus. Posting Group (depending on Bill-to/Sell-to VAT Calc. in the General Ledger Setup, fast tab General) serves as another criterion.
After posting the invoice, the amount of the sales line is posted to the determined (deferrals) account and a Ledger Entry (Entry Type=Positive Adjmt.) is created for the Prepaid Services, charging it accordingly.
Once the Prepaid Service is topped up, it can be used or consumed. Further details on consumption of Prepaid Services are explained in more detail here.
Recurring Prepaid Services
A Prepaid Service can be charged recurrently, e.g. to provide a certain amount of services per period (support hours per month, for example). In this case, an item marked as Prepaid Service can also be used in a sales document, from which a Service Object is created in the further process. Again, the Prepaid Service No. must be specified in the sales line prior to posting. This Prepaid Service No. is transferred to the Service Commitment (in the Service Object).
Alternatively, the Service Object can be created manually and the Prepaid Service No. set in the Service Commitment directly. By creating and posting the Customer Contract Invoice, the Prepaid Service is topped up or recharged. This requires that the app DYCE Subscription & Recurring Billing is installed.
Service Commitment Option and Service Commitments
In contrast to items for charging one-time Prepaid Services, items for charging recurring or periodic Prepaid Services must be set to create a Service Object including Service Commitments. Therefore, Service Commitment Item must be selected in the Service Commitment Option field and a suitable Service Commitment Package must be assigned.
The Service Commitment Package must
- have a line with Partner=Customer, which
- is invoiced via contract (Invoicing via=Contract),
- the Invoicing Item No. field is left empty (so that the item itself is used for invoicing) and
- the Calculation Base % should be 100.
In addition, it should be sensibly marked as Standard for the item. For more information on Items and Service Commitment Packages please refer to the relevant parts of the documentation for DYCE Subscription & Recurring Billing.
Posting Recurring Prepaid Services to deferral accounts
Deferrals of revenue for Recurring Prepaid Services are made using the mechanisms of Contract Deferrals.