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Overview

For customers that incorporate prepaid credits in their billing, Orb’s NetSuite integration provides a turnkey solution for recognizing per-item drawdown of prepaid credits – no manual workarounds, no custom iPaaS connectors, or external consulting services needed. Get out-of-the-box accounting for:
  • Deferred revenue from generic credits
  • Item-specific recognized revenue from drawdown
  • Revenue recognition in the period of consumption
  • Recognition of breakage revenue from credit expiration
Prepaid credit blocks are represented in NetSuite using NetSuite’s native Customer Deposits record type. A Customer Deposit stores a prepaid amount on a customer’s account that can be applied to future usage invoices. Each unique credit block in Orb corresponds to a unique customer deposit in NetSuite. Using a native NetSuite record type allows teams to use NetSuite’s built-in transaction relationships, application behavior, ARM workflows, reporting, and audit trail for easier reconciliation and audit-defensibility.

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How it works: transaction lifecycle and integration mechanics

Orb’s NetSuite integration syncs three parts of the credit lifecycle:
  1. Initial credit purchase
  2. Application to usage invoices
  3. Credit expiration (if applicable)\

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1. Initial credit purchase

For each credit block created in Orb – whether through a recurring subscription allocation or a manual prepaid credit purchase – Orb’s NetSuite integration creates a corresponding Customer Deposit in NetSuite when the related purchase invoice is synced. The integration also creates and stages two journal entries at this phase to support the downstream accounting treatment:
  1. Prepayment clearing: holds the Customer Deposit balance from undeposited funds to apply to a future invoice when credits are drawn down
  2. Transfer: holds deferred revenue from the billing of a general prepaid credit item for future reclassification to item-specific revenue upon drawdown
Drawdown1 1

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2. Application to usage invoices

When prepaid credits are applied to eligible prices on a subscription invoice in Orb, the resulting drawdown is synced to NetSuite as a separate standalone sales invoice used to support item-specific revenue recognition. This invoice is distinct from the subscription invoice that Orb also syncs to NetSuite, and has no net AR impact. When the drawdown is received in NetSuite, the integration applies the corresponding Customer Deposit to mirror the credit application that occurred in Orb, marking the invoice as paid and decreasing the Customer Deposit balance. Deferred revenue is reclassified to the appropriate revenue account via journal entries generated on the next run of Update Revenue Arrangements.
Drawdown2 1

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3. Credit expiration (if applicable)

If a credit block in Orb has a defined expiration date, the integration sends a corresponding expiration event to NetSuite. This allows any remaining unapplied Customer Deposit balance associated with that credit block to be recognized as breakage revenue.
Drawdown3 1

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Accounting impact (T-accounts)

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1. Initial credit purchase

Tacct1 1

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2. Application to usage invoices

Netsuite 112

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FAQs

There is no separate cash event associated with the integration’s use of customer deposits. Although Customer Deposits in NetSuite are commonly associated with cash transactions, in this integration they are used strictly as an accounting mechanism to hold and apply prepaid credit balances. Applying prepaid credits to usage does not create a new cash event. Instead, the Customer Deposit is used to store the prepaid balance for application against eligible invoices in NetSuite, so the credit application can be reflected using standard NetSuite transaction record types and behavior while revenue recognition continues to be handled separately through NetSuite ARM.\ Each credit block in Orb maps 1:1 to a corresponding Customer Deposit in NetSuite. If multiple credit blocks are applied to a single invoice line in Orb, the integration reflects that usage in NetSuite as multiple Customer Deposit applications applied against the same transaction line. This is common and expected, and is governed by Orb’s credit deduction logic. Voiding credit purchases that have already been applied to invoices cannot sync to NetSuite. Orb disallows syncing this event to preserve the integrity of your financial data between your billing and ERP platform. See more in the core NetSuite integration mechanics guide.