For many finance teams, the only system “flexible enough” to handle each one of these one-offs is the handy dandy Microsoft Excel. However, that means AR data is limited and siloed in multiple sources – it will be almost impossible to scale as a company grows. This feature is only available if you have Invoice Settlement enabled. The Invoice Settlement feature is generally available as of Zuora Billing Release 296 (March 2021). This feature includes Unapplied Payments, Credit and Debit Memos, and Invoice Item Settlement. If you want to have access to the feature, see Invoice Settlement Enablement and Checklist Guide for more information.

This is to ensure that accounting E2E are using the same exchange rate. This course describes the common billing complexities of subscription-based businesses and explains how billing is handled within Zuora. You can send memo PDFs automatically to your customers by configuring the memo notifications. When a certain memo event is triggered, the generated memo PDF is sent to your specified email addresses. After a memo is posted, you can email your customers a specific version of the memo PDF from the Zuora UI and REST API.

In many countries, credit and debit memos are actually required by law for adjusting invoices. Credit and debit memos are a widely adopted and well-understood billing construct that makes it easier to audit a company’s billing and verify the correctness of receivables accounting. Based on this rule, the reversal adjustment starts from the last period backward until the credit memo amount is completely consumed. You want to give your customers a percentage or fixed amount discount on the price of a product or service only for a certain period of time.

You’ll receive a weekly digest of must-read articles and key resources. We’re excited to announce these new capabilities as part of the Spring ‘18 launch. If you’re a customer and want more information, reach out to your Customer Account Manager. That’s why we’re excited to add 3 new features to Zuora Billing’s Invoice Settlement capabilities this Spring. This section shows both the original and resent emailing activities.

1. The following credit memo of $200 is input to Zuora Revenue to adjust the invoice based on the LIFO credit rule.
2. The Invoice Settlement feature is generally available as of Zuora Billing Release 296 (March 2021).
3. The standalone CM line is input to Zuora Revenue without the original SO Line Id or Invoice Line Id specified such as the following.

If the email was sent to your customer, but your customer still has not received it, you can resend it by clicking Email PDF. Then, the following CM-C line is collected to cancel line #1 of the original INV-123 invoice. In this case, Zuora Revenue will reduce the allocatable price and trigger reallocation. In this case, Zuora Revenue will reduce the allocatable price and trigger reallocation.

The amount of $450 can be completely consumed from the Jun-19 period backward until the Apr-19 period. You must configure the following settings to enable emailing credit memo PDFs automatically upon posting bill run. Due to billing mistakes, customers are either undercharged zuora credit memo or overcharged. In a single transaction line, when the order was booked, it was having F.Ex Rate as 1.07 but when the line got invoiced, the invoice was transacted with F.Ex Rate 1.10. In Zuora Revenue, the accounting will absorb the FX gain/loss into revenue.

Video: for anyone interested in learning how to issue a credit or refund to customers using credit and debit memos.

In such cases, you can issue a prorated credit to your customer. Based on company policies, the FX gain loss amount may or may not be appropriate to be absorbed into revenue. With that said, Zuora Revenue’s Unbill FX Report is provided to customers for identifying the FX Gain/Loss amount. Customers can choose to reclass the amount using MJE or their GL Journal Entry. T.Curr, F.Ex.Rate and G.Ex.Rate are sourced from upstream systems upon transactional data (SO/INV/CM) is collected into Zuora Revenue.

Email credit memos automatically upon posting bill run

A credit memo of $150 is input to Zuora Revenue to adjust line #1 of the #100 invoice. The amount of $150 is prorated equally during the six months and Zuora Revenue will do the following catch-up for this credit memo. You can create memos from invoices or charges only if you have the user permission. In the same transaction line in Example 2, a return order (RORD) against the original order in a later date and transacted with F.Ex Rate as 1.07. You can get a copy of the credit memo or debit memo either from the memo menu or the History section of the memo detail page. If the credit memo amount is $450, the reversal adjustment is as follows.

Zuora Revenue will update the BILLED_DEF_AMT and BILLED_REC_AMT values for this SO line to display how much has been billed and released. Invoice based CM-R lines are uploaded to Zuora Revenue with the ORIG_INV_LINE_ID field specified. Zuora Revenue will update the BILLED_DEF_AMT and BILLED_REC_AMT values on the SO line to display how much has been billed and released. SO based CM lines are uploaded to Zuora Revenue with the ORIG_SO_LINE_ID field specified.

Invoiced based CM-R

Then, the following credit memo is collected with the transaction type being CM and linked to line #1 of the original INV-123 invoice. The following table explains whether each type of credit memos has an impact on different values of the SO line https://1investing.in/ and whether reallocation occurs. If credit memos are generated during the bill run, you can set to email the credit memos upon posting. After credit and debit memos have been generated, you can either download or email the memo PDF documents.

To get the latest version of the memo documents, you need to regenerate the memo PDFs. Then, the following credit memo is collected for line #1 of the INV-123 invoice as the CM-R transaction type. Examples are provided below for each type to help you understand the impact of different credit memos. The normal credit that provides a discount to the customer against a sales order or invoice.

You’ll need the Invoice Settlement feature enabled in your Zuora tenant in order to have access to the above-mentioned functionalities. If you don’t have this feature enabled and would like to do so, submit a Zuora Support here. Please keep in mind that if you enable invoice settlement after configuring and using your tenant for a while, support will need to go through a migration process. If the cancelation is not on an overage invoice, this type of transaction line is treated as a future rebill and does not impact any allocation. CM-C lines are uploaded to Zuora Revenue with the ORIG_INV_LINE_ID field specified.

Then, the following credit memo for this SO line is collected in Zuora Revenue. SO based CM-R lines are uploaded to Zuora Revenue with the ORIG_SO_LINE_ID field specified. In this example, the following sales order is input to Zuora Revenue.

Company

In this example, the following sales order line is input to Zuora Revenue. Zuora Revenue will update the BILLED_DEF_AMT and BILLED_REC_AMT values on the SO line to display how much has been billed and released for this line. Invoice based CM lines are uploaded to Zuora Revenue with the ORIG_INV_LINE_ID field specified. To create a memo from an invoice through the Zuora REST API, see POST Credit Memo from Invoice and POST Debit Memo from Invoice. You issue a credit to your customer for an unused portion of the service.

Zuora automatically generates credit memos during the bill runs for negative charges based on your invoice and credit memo generation rule. The number of credit memos that are generated during the bill run is displayed on the bill run detail page. Due to billing mistakes, service interruptions, or confusion about invoices, a customer might contact you to contest a charge on the invoice. In such cases, you might need to issue a credit or debit memo to resolve the dispute. For example, you apply the incorrect price to your customer because the wrong scale prices are used or a discount has not been applied. In such cases, you can issue a credit memo or debit memo to correct the amount on the mistaken invoice items.

Ad hoc charges or credits

For many companies, payment operations and AR management can be a cumbersome, lengthy, and error-prone process. The reason comes down to the manual attention and time it takes to effectively “settle” invoices. The transaction price will be adjusted for the CM-R transactions. The transaction price will not be adjusted for the CM-C transactions if there is no invoice overage. For example, your customer pays $500 in advance for an annual service on January 1.

You can create your custom credit memo and debit memo templates based on your company’s requirements. Zuora supports credit memo merge fields and debit memo merge fields to display certain information you want your customers to see. Occasionally, a vendor might want to issue an ad hoc charge or credit, for example, a customer loyalty credit. They provide another mechanism for organizations to manage their customer relationships and billing operations. For example, give your customer one-month of free service or a discount for a month. Credit and debit memos provide a detailed justification of the amount stated on the memo.