Overview

Each customer account maintains a balance composed of credit and debit adjustments that apply to future invoices. A credit (negative balance) means you owe the customer money, and a debit (positive balance) means the customer owes you money. This page explains how credits and debits are created, how balances are applied to invoices, and how to configure auto-apply rules. For managing invoices directly, see Invoices.

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Credits

Offline Payments

Offline payments made by customers credit the customer balance. As shown in the image below, an offline payment of $100 created a negative customer balance on the account. Offline payments can be used when a customer pays in cash, check, or any other form of payment that will not be recorded via the platform.

Canceling a subscription

When canceling a subscription, you are prompted to refund the remaining subscription amount to either the credit card or the customer balance.

• Credit card: An online refund is issued and the customer receives the refund on their credit card.

• Customer balance: A credit transaction is created on the customer balance and becomes available for the customer to use on any subsequent invoice.

Online Payments - Renewals

You can charge customers in advance before the phase starts by enabling this option from the settings page. Enabling this setting charges the customer for the future invoice and credits the customer balance for that invoice total.

Once the new phase starts, the invoice is created and the customer balance is used to settle it. This behavior only occurs during the renewal process, whether initiated from the platform or the user interface.

Debits

Invoice Payment

When a customer balance is applied to an invoice, a debit is created on the customer balance. If a customer has a credit balance, any subsequent invoice is paid by the customer balance in full or partially.

The customer balance is always prioritized against new invoices. Any remaining amount on the invoice after the customer balance is applied either stays open or is charged to the default payment method on file. As shown below, after creating a subscription with a $10 plan and a quantity of 5, a total of $50 was debited from the customer balance.

Refunds

Refunding an offline payment by clicking Adjust Customer Balance creates a debit as an adjustment. The customer balance adjustment is created automatically and the charge is marked as refunded offline. You are responsible for issuing the offline refund to the customer (for example, by cheque or cash).

Refunding a Balance to a Credit Card

Pelcro supports refunding directly from the customer balance to the original payment method when the payment destination was the customer balance.

To refund a payment that was originally processed from a card with the destination set to the customer balance:

1. Navigating to the Payment record on the platform.
2. Clicking the three-dot menu (⋯) beside the payment.
3. Selecting "Refund from Customer Balance."
4. Confirming the refund amount when prompted.

Pelcro validates the available customer balance before processing the refund. Once confirmed, a debit adjustment is created on the customer balance to reflect the refunded amount.

Refund Logic

• If the customer balance is greater than or equal to the charge amount, the full charge amount is refunded.
• If the customer balance is less than the charge amount, only the available balance is refunded (partial refund).
• Refunds cannot exceed the original charge total.

Refund Examples

This logic ensures accurate reconciliation and prevents over-refunds, maintaining consistency between Pelcro and your payment processor.

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Customer Balance Auto-Apply Rules

The Customer Balance Auto-Apply Rules setting allows administrators to control how available customer balances are applied to invoices within the Pelcro Billing Engine.

This setting provides predictable and auditable control over balance application behavior at the account level. For related billing configuration, see Settings.

Location

Platform Path:
Settings → Billing → Customer Balance Auto-Apply

This setting is configured per account and stored at the account configuration level.

Available Options

Administrators can select one of the following rules. The table below summarizes all options, with detailed descriptions following.

1. Oldest Invoice First

• Available customer balance is automatically applied to the oldest open invoice.
• If the balance exceeds the invoice amount, the remainder is applied to the next oldest invoice.
• Continues until the balance is exhausted.

Use case: Standard accounting practice (FIFO settlement).

2. Exact Amount Match

• Balance is automatically applied only when the balance amount exactly matches an open invoice total.
• No partial applications occur.
• If no matching invoice exists, the balance remains unapplied.

Use case: Strict reconciliation environments.

3. Newest Invoice First

• Available balance is applied to the most recently generated open invoice.
• If the balance exceeds the invoice amount, the remainder is applied to the next newest invoice.

Use case: Businesses prioritizing current billing cycles.

4. Manual Only (No Automatic Application)

• Customer balances are not applied automatically.
• Balances remain available but unapplied.
• An administrator must manually apply the balance to a selected invoice.

Use case: Finance-controlled environments requiring approval before settlement.

How It Works

When:

• A new invoice is generated, or
• A new balance is added to a customer account,

The Billing Engine evaluates the account-level Auto-Apply rule and determines whether and how to apply the balance.

The rule:

• Is evaluated at invoice creation time.
• Applies only to open invoices.
• Does not override manually applied balances.

Important Notes

• Changing the setting does not retroactively reprocess past invoices.
• Only open invoices are eligible.
• Negative balances are not affected.
• Manual applications always override automatic rules.

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Limitations

• You cannot apply a customer balance to a specific invoice — the balance applies only to invoices created after the balance adjustment.
• The customer balance is automatically applied to the next invoice created for the customer (unless the Auto-Apply rule is set to Manual Only).
• The customer balance currency always matches the customer currency.

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Troubleshooting

Refund fails due to insufficient customer balance

If a refund fails, verify the customer balance is sufficient. Pelcro validates the available balance before processing. If the balance is less than the charge amount, only a partial refund is issued. Check the customer balance on the customer profile page before retrying.

Customer balance not applied to a new invoice

Confirm the Auto-Apply Rule is not set to Manual Only. If it is, an administrator must manually apply the balance. Also verify the invoice is in an open state — closed or paid invoices are not eligible for balance application.

Changed the Auto-Apply rule but existing invoices are unaffected

Changing the Auto-Apply setting does not retroactively reprocess past invoices. The new rule applies only to invoices created or balances added after the change. To apply a balance to an existing open invoice, use the Manual Only workflow.

Refund amount exceeds expected value

Refunds cannot exceed the original charge total. If the displayed refund amount seems incorrect, verify the original charge amount and the current customer balance on the payment record. Pelcro caps the refund at the lesser of the charge amount or the available balance.

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Next Steps