Prepaid Service Packs: Cost the Promises Before Discounting
Price a prepaid service pack against the cost of delivering every promised session. Include administration, likely rescheduling effort and the capacity needed later, then test higher future costs. The upfront payment brings cash in sooner, while the work still needs to be delivered. Do not make the pack profitable only by assuming customers will fail to use it.
What you’ll get from this guide: Calculate pack contribution at full redemption and reserve the delivery capacity.
- Cost full redemption before choosing the discount.
- Separate cash received from remaining service commitments.
- Test future delivery costs and have customer terms reviewed.
This worksheet helps a service owner assess a proposed pack before selling it. Use the pricing guide for the broader pricing methods. Define the sessions, duration, inclusions and booking capacity first.
Start with all the work you promise
Count session time, preparation, administration, payment costs and any customer-specific materials. Include support that customers are entitled to receive under the offer. Do not label normal included service as an unexpected extra just because it consumes time.
The fictional offer contains ten sessions that normally sell for $100 each. The pack costs $900. A session takes one delivery hour costed internally at $50 plus $10 materials. Pack administration takes $60 and payment cost $18. These are management-cost assumptions, not wage or provider-fee claims.
Assumptions: Fictional Australian-dollar management example. Revenue and costs exclude any recoverable GST; non-recoverable tax is included in costs. No GST entitlement or income-tax deduction is assumed for your business. Contribution is before unallocated overhead and income tax.
| Item | Base delivery cost | Higher future delivery cost |
|---|---|---|
| Pack payment | $900 | $900 |
| Ten sessions: labour and materials | 10 × $60 = $600 | 10 × $68 = $680 |
| Pack administration | $60 | $60 |
| Payment cost | $18 | $18 |
| Total delivery-related costs | $678 | $758 |
| Contribution before other overhead | $222 | $142 |
| Contribution as share of pack price | 24.67% | 15.78% |
Original ASBG worked example. All businesses, amounts and scenarios are fictional. The table contains the same figures as the visual.
The base pack leaves $222, or $22.20 per promised session, before unallocated overhead and tax. The 10% discount from $1,000 to $900 does not reduce your delivery workload by 10%. If you want to compare ten standalone bookings, cost their administration and payment processing separately; those costs may differ from one pack purchase.
Track what remains after the cash arrives
Suppose 20 packs sell. They bring in $18,000 and commit the business to 200 sessions. If 60 sessions are completed, 140 remain. At the base $60 direct session cost, those remaining sessions represent $8,400 of delivery costs in the model, plus any administration not yet done.
Do not spend the entire bank receipt as though all work were finished. Maintain a pack register with sale date, sessions promised, sessions used, outstanding sessions, expected delivery cost and booking dates. This is an operational commitment register; your accountant should determine the correct accounting, GST and income-tax treatment.
Put the sessions into the diary
If only ten pack-session slots are available each week, 200 sessions require 20 weeks of that capacity. Check whether demand concentrates at popular times and whether those bookings displace full-price work. Use contribution per constrained hour for a genuine capacity limit.
Record rescheduling administration and unusable gaps in the diary. Cost extra staff time where it is actually required. If future session costs rise by $8, the example's contribution falls by $80 per fully used pack. Selling more packs cannot repair a delivery model whose cost assumptions no longer hold.
Review terms before selling
Have inclusions, cancellation, refund, expiry and booking terms checked for the actual offer. Do not insert an expiry date just to make the spreadsheet work. The ACCC explains remedies for services and prepayments; this worksheet does not determine how those rules apply to your pack.
Where to get help
Ask your accountant to connect the commitment register to the books and cash forecast. Compare ongoing recurring-service economics and browse the pricing and profit guide for related delivery-cost worksheets.
Where to go from here
Recurring Revenue Profit: Model Cancellations and Service Costs
Forecast cancellations and service costs across the customer pool.
4 min readContribution per Bottleneck Hour: Choose Work When Capacity Is Full
Compare the contribution from your scarce hours.
3 min readSupplier Early-Payment Discounts: Compare Savings and Cash Cost
Continue the “compare operating choices” reading sequence.
3 min read
General information only. This guide doesn't take your personal or business circumstances into account and isn't financial, legal or tax advice. Rates and thresholds change — check the official sources linked in this guide and get qualified advice where your circumstances require it.