Picture yourself at your favourite coffee shop, Bean & Brew. You come by every morning for your usual cappuccino, and occasionally you get an extra cold brew and a muffin or two in the afternoon. Interestingly, Bean & Brew has a new idea of offering a Coffee Pass. You can pay $50 in advance for 25 drinks. Each time you purchase a coffee, the system automatically deducts one drink from your prepaid balance. The goal is to have no wait time at the counter. 

Prepaid with Drawdown is quietly gaining ground because people need it in today's world. Businesses that offer AI, machine learning, and cloud services have a unique problem as they slowly move into consumption-based billing. They can't predict how their services will be used. A customer might make a few API requests one week, and the next week, they might process millions of data points or hours of video.

Traditional monthly billing is difficult to maintain. Customers often receive bills they weren't expecting, and businesses have to wait longer for money and take on more credit risk.

Zoho Billing has built-in support for Prepaid with Drawdown billing, which makes it easy for businesses to switch to this new model quickly and easily. This prepaid drawdown will change the game for setting up fair and real-time cash flow if you work in AI services, SaaS, cloud computing, or any other business model that relies on consumption.

• Create prepaid plan or add-on: Define prepaid products so that customers pay for usage credits in advance.

• Drawdown Addon: Link usage lets services automatically take credits out of prepaid balances.

• Real-time usage tracking: Track usage through Zoho's API or admin console and see the balance change right away.

• Manage Overage and Rollover: Set up how overage usage is billed and how unused credit can be rolled over.

• Top-Up and Overrides: Let customers add credits in the middle of a billing cycle or change the number of credits when they sign up for a subscription.

• Statement and Invoicing: Statement shows the number of credits/units consumed, and it can be invoiced instantly or with the upcoming cycle along with overage charges.

Scenario:

Let's say a cloud storage service offers a safe place for startups and content creators to store and back up their data.

The service provider offers a Prepaid Storage Plan because file uploads and downloads can vary a lot from month to month. Every customer pays in advance for a certain amount of data credits, like 5TB. Zoho Billing keeps track of how much they use every time they upload or download files and takes the same amount out of their prepaid balance.

The service provider also offers a Compression Service, where each GB of compressed data users receive 0.5 GB worth of credit.

Anna subscribes to the prepaid storage plan.

• She consumes 800 GB of data on the first day.

• Zoho Billing takes 800 GB off their prepaid balance right away, leaving them with 4200 GB.

• Anna consumes 100 GB of compressed data, which Zoho Billing seamlessly handles through a drawdown rate and reduces the credit by 50 GB.

• Again, on day 10, another 1000 GB was used, leaving Anna with a balance of 3150 GB in credit at the end of the month.

When usage tracking is connected to Zoho Billing in real time using APIs, all of this happens in real time.

Suppose, the balance credit reaches zero, Zoho Billing automatically starts tracking any extra usage as overage. This extra usage will be charged at standard rates on the next invoice or right away if the business chooses to "Charge Now." Also, The service provider rolls over the credits to the next billing cycle to make it flexible and fair. 

Note: The prepaid with Drawdown billing model is currently in early access. Reach out to support@zohobilling.com to enable it for your business. Then, go through our Prepaid with Drawdown in Zoho Billing help document to configure it in your organization.  

I am confident that the next time you use your coffee pass at Bean & Brew, or any other prepaid service, you will realize it is more than just a convenience. It's a small, everyday reflection of how many big data-driven companies are changing how we pay for technology.

The Prepaid with Drawdown model has scope in every business we encounter. We will provide additional use cases in the comments to make it easier for companies to adopt this model logically.