Sales process
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.
Topping up 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.
Topping up Recurring Prepaid Services
A Prepaid Service can also be topped up on a recurring basis, for example, to provide a specific amount of services per period (e.g., support hours per month). In this case, an item marked as a Prepaid Service can also be used in a sales document, from which a subscription is created later in the process. Here, too, the Prepaid Service No. must be specified in the sales line before the transaction is posted. This Prepaid Service No. is transferred to the subscription line (in the subscription).
Alternatively, the subscription can also be created manually, and the Prepaid Service No. can be selected directly in the subscription line. Creating and posting the contract invoice for the customer subscription contract triggers the posting or crediting of the Prepaid Service.
Deferrals for Prepaid Services
When posting an invoice for a Prepaid Service, the system always automatically performs deferrals; that is, the amount is posted not to a revenue account but to an deferral account. This applies to both one-time and recurring Prepaid Services. The deferred amounts are later transferred to a revenue account when the consumption is posted. General ledger accounts are controlled using the General Posting Setup; see the next section for more information.
Posting and Account Determination for Deferrals and Releases
If an item marked as Prepaid Service is used in a document, the Gen. Prod. Posting Group in the sales line is replaced based on the setting in the Gen. Prod. Posting Group Deferrals field from the Prepaid Services Setup is used. The customer’s Gen. Bus. Posting Group (depending on Invoiced to/Sold to VAT Calculation in the General Ledger Setup, fast tab General) serves as an additional criterion. The deferral account is determined based on these two criteria. When the invoice is posted, the amount of the sales line is posted to the determined deferral account, and a Ledger Entry (Posting Type=Positive Adjmt.) is created for the Prepaid Service, thereby crediting it accordingly. Once the Prepaid Service has been topped up, it can be used or consumed. Further details on the consumption of Prepaid Services are explained in more detail here.
For contract lines with a Prepaid Service No., no contract deferrals are created based on the Customer’s subscription contract; this is always done exclusively through the Prepaid Services Setup. When assigning a Prepaid Service No. in a contract or subscription line, the Create Contract Deferrals field is always automatically set to No and cannot be changed manually. This prevents duplicate deferral entries and revenue recognition. The general ledger account for posting the contract invoice is determined based on the Gen. Prod. Posting Group for deferrals from the Prepaid Services Setup, not based on the default customer contract account.
The transfer from the deferral account to the revenue account occurs exclusively through the consumption of the Prepaid Service - either by posting consumption invoices or by running the Release Remaining Balances/Quantities report.
Subscription Option and Subscriptions
In contrast to items for charging one-time Prepaid Services, items for charging recurring or periodic Prepaid Services must be set to create a subscription including lines. Therefore, Subscription Item must be selected in the Subscription Option field for the item and a suitable subscription package must be assigned.
The subscription 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 subscription packages, please refer to the relevant parts of the documentation for Microsoft Subscription Billing.
Manual creation of Ledger Entries
Prepaid Services can also be manually topped up using the Create Ledger Entry action (action group Process on the Prepaid Service Card). For more details, see this part of the DYCE documentation.