Understanding Account Balance, Prepaid Credit Balance, and Credit Notes

When managing your billing in Orb, it’s important to understand the differences between account balance, prepaid credit balance, and credit notes. Each serves a specific purpose in tracking credits, payments, and customer obligations.

💳 What is an Account Balance?

The account balance (also called the customer balance) is the net amount owed to or by a customer. You can think of it like a running “tab.”

• If the balance is positive, the customer has money to use towards a future issued invoice (e.g. from an overpayment or credit).

• If the balance is negative, the customer owes money and the applicable amount will be added to the next issued invoice.

💡 Example: A customer pays $100 upfront, then downgrades their plan to $50. The unused $50 will be added to the customer balance through a refund credit note. This amount remains in the account balance and can be applied to future charges or refunded.

🔒 What is a Prepaid Credit Balance?

A prepaid credit balance represents an amount that a customer has as part of a prepaid credit block in a particular currency. These credits are applied in real time as usage occurs or for in-arrear fixed fees. Credits can also be specified in different currencies: real (e.g. USD) or virtual (e.g. "credits"). Credits can also have specific recognized and deferred revenue behavior depending on the cost basis of the credits.

Each prepaid credit block has:

• An effective date (when credits become available)

• An optional expiry date

• An original balance and a current remaining balance

📌 Example: A customer purchases 1,000 prepaid credits in USD. As they use 200 USD worth of services, their remaining prepaid balance becomes 800 USD.

🧾 What are Credit Notes?

Credit notes are issued to reduce the amount of an invoice. They can be applied before or after an invoice is paid:

• Before payment: The credit note reduces the total due on the invoice. These are "adjustment" credit notes.

• After payment: The credit is returned to the account balance as an amount owed to the customer. These are "refund" credit notes.

Credit notes are commonly used for corrections, adjustments, or refunds.

🧮 Do All These Add Up to the Account Balance?

Not exactly. A common question is:

Is account balance = prepaid credit balance + allocations + credit notes?

No — the account balance is not a direct sum of these components.

Instead:

• Prepaid credits are used first, based on usage or plan commitments.

• Credit notes adjust invoices.

• The account balance reflects any remaining funds or amount owed after all credits and adjustments have been applied.

📬 Still Have Questions?

We’re here to help! If you have any questions about your account balance, prepaid credits, or credit notes, reach out to support and we’ll be happy to assist.