What does “Credit Floor” mean?

The Accounting system will send you warning when your balance reaches certain percentages of your credit limit. When your balance reaches 10%, 25%, 50%, 75% and 90% you will get a warning email. When you balance reaches 100% you will get an email saying that you have used all your quota.

In 2000, some users who paid for extra quota as it was required, found that their balance was regularly between 90 and 100 percent of their credit limit. This meant that no warning email’s would be sent and the user would not get any warning that their credit limit was close the being reached. To combat this problem a new method of deciding when to send warning emails for people who pay for extra quota has been introduced.

The new method
When you make a payment for your Internet Accounting use, apart from adding the payment to your credit limit, we now also set another field in the system, called the credit floor. It is set to the value of your balance (truncated to whole dollars) at the time of payment.

This means that automatic emailer can calculate a ‘pseudo-usage’ which is now based on what you have left, rather than how much of the your total balance is used.

An example
Student N has $5.00 of quota (and a default credit floor of $0.00).

They use some amount of quota (eg: 2.00)

They would have got emails at $0.50 and $1.25 as the usual 10 and 25 percent usage calculations.

Now they pay an extra $5.00 into their account.

Their credit limit is $10.00 but their credit floor is now $2.00, which changes the emailers’ behaviour to the new method.

If they now use $0.80 they will get an email for 10% usage,
calculated as ($2.80 – $2 ) / ($10 – $2) = ($0.80) / ($8) = 10%

A futher example
Much later down the track their usage is now $30.00 and their credit limit is now $50.00

Assume they pay another $10.00, then their credit limit will be $60.00 and their credit floor is $30.00

If they use $3.00, they will get an email for 10% usage,
calculated as ($33 – $30 ) / ($60 – $30) = ($3) / ($30) = 10%

In simple terms, you have reached the bottom of you credit limit!

Courtesy: http://www.jcu.edu.au/internetaccounting/about/credit_floor.shtml