Prepaid with Drawdown Feature in NetSuite 2024.2

TL;DR Opening

Starting in NetSuite 2024.2, the Prepaid with Drawdown feature provides customers the ability to make advance payments for services, streamlining invoicing and cash flow management. Businesses can efficiently manage usage billing and refunds associated with these prepaid amounts.

What's New

The Prepaid with Drawdown feature enables customers to pay a specified amount in advance, which serves as a credit towards their service usage under a contract. Here are some key aspects of this feature:

• Upfront Payment: The total amount paid upfront is the sales amount associated with the prepay element, fully billed at the start of the subscription period.
• Usage Calculation: Once services are utilized, the billing amount is adjusted based on the rate of the services consumed, allowing for accurate invoicing and deductions from the prepaid balance.
• Invoice Management: Invoices are generated to reflect the transfer of funds from the prepay element to usage elements, ensuring that records of sales and bill amounts are accurately maintained.
• End-of-Contract Handling: At the contract's conclusion, a service provider can either refund any remaining prepaid balance or recognize it as revenue without issuing a refund.

Enabling the Feature

To use the Prepaid with Drawdown feature, you'll need to enable it within your NetSuite account:

1. Navigate to Setup > Company > Setup Tasks > Enable Features.
2. On the Transactions subtab, locate the Billing section.
3. Check the box labeled Prepay with Drawdown.

• Prerequisites: This feature requires the Advanced Subscription Billing feature to be enabled, and the Create Revenue Elements for Subscription Revisions accounting preference must be disabled.

Best Practices

• Ensure proper training for your billing and accounting teams to maximize the efficiency of managing prepaid usage.
• Monitor usage regularly to prevent any discrepancies between prepaid amounts and actual service consumption.
• Consider customer feedback regarding the billing process to optimize user experience.

Who This Affects

• Administrators: Responsible for enabling and configuring billing features.
• Billing Specialists: Manage customer accounts and invoice generation.
• Service Providers: May need to interact with this feature for customer support and dispute resolution.

Key Takeaways

• The Prepaid with Drawdown feature simplifies the prepaid billing process.
• It supports better cash flow management for service providers.
• Accurate invoicing practices are essential to maintain financial integrity.
• The feature requires Advanced Subscription Billing to be enabled.