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What are Credit-Based Billing Plans?
What are Credit-Based Billing Plans?
Learn the ins and outs of Credit-Based Billing Plans so you can offer a simple billing plan to your clients.
Gnomes avatar
Written by Gnomes
Updated over a week ago

How it Works

Credit-Based Billing Plans include the following details:

  • Name: Select a plan name that is descriptive enough for you to distinguish between them. This plan title will be shown to your clients.

  • Description: This is an internal field and not shown to clients.

  • Monthly Credit: The amount of spendable money the client has each month for space calendar bookings. Any overage hours will be billed the following month, at the hourly rate set by the calendar(s).

  • Bookings Charges are based on: Choose how to apply charges by selecting either:

    • Calendar Rates - Bookings are based on rates set by the calendars.

    • % of Calendar Rates - Bookings are charged based on a percent of the rates set by the calendars. You can provide a percentage discount or upcharge with this option. For example, if you provide a client with a 10% discount, their bookings will be charged at 90% across all calendar rates, including your off-peak rates.

Credit-Based Billing Plans allow clients to purchase a fixed amount of credit (spendable money) to be used on space bookings throughout the month. As they book hours within different spaces, credit is deducted according to the hourly rate of that calendar or percent of that rate. 

Clients on a Credit-Based Billing Plan prepay for their plan at the beginning of the month. If a client uses more credit than their plan provides, then they will be charged an overage fee for those hours according to the space’s hourly rate. They will see the overage fee for these hours on the following month’s bill.

Note:

  • Credit-based plans do not roll over month to month. Clients will lose anything unused at the end of the month.

Real World Examples

Dan's Donuts

Dan's Donuts is a client of The Rusty Knife, a new kitchen in town. The Rusty Knife has a Credit-Based Plan of $1,000.00. They have two kitchen spaces, one which is $25/hr (Kitchen A) and the other is $10/hr (Packing Room B). They also have a meeting room for which there is no charge ($0/hr) but for which they require scheduling to avoid double booking.

In February, Dan's Donuts pays $1,000.00 for his Credit-Based Plan. He uses the following spaces:

  • Kitchen A: He uses for 30 hrs which at $25/hr costs him a total of $750.00.

  • Packing Room B: He uses for 10hrs which at $10/hr costs him a total of $100.00. 

This equals $850.00 for Dan and because he has $1,000.00 in his Credit-Based Plan, he owes $0 additional money.

In March, Dan is still on the $1,000.00 Credit-Based Plan but has the following usage:

  • Kitchen A: He uses for 40 hrs which at $25/hr costs him a total of $1,000.00.

  • Packing Room B: He uses for 10 hrs which at $10/hr cost him a total of $100.00.

This totals $1,100.00, which means Dan will be charged a $100.00 overage charge on his April Invoice.

Orville's Oranges

Orville's Oranges is another client of the Rusty Knife. They are a non-profit, so The Rusty Knife gives them a 15% discount off the calendar rates on the credit-based monthly plan. This means they pay $1,000.00 in booking credit, but when they book a space in the calendar, the 15% discount is applied to the calendar's peak and off-peat (if set) rates.


In February, Orville's Oranges pays $1,000.00 for their Credit-Based Plan. They then use the following kitchen time:

  • Kitchen A: They use 40 hrs which at $20/hr costs $800.00 BUT with the 15% discount, they book the space at $17/hr which costs them a total of $680.00.

  • Prep Room B: They use 20 hrs which at $15/hr costs $300.00 BUT with the 15% discount, they book the space at $12.75/hr which costs them a total of $255.00.

This totals $935.00 for Orville, and because they have the $1,000.00 in the Credit-Based Plan, they have $65.00 additional credit remaining. If they do not use the $65.00 by the end of the month, the credit will not roll over to the next month.

Looking for other plan types? You can also offer your clients a certain number of hours per month with Time-Based Billing Plans.

Still have questions about Credit-Based Billing Plans? Let's chat!

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