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Preparing for Year-End Close in Zuora Billing

By Lana Lee posted 10-13-2023 13:02

  

The year-end close process is a critical part of every organization and it’s important that it’s done correctly to ensure accurate financial reporting and strategic planning. At our October Finance workshop, Enterprise Services Manager Monique Romero walked us through preparing our books for year-end close.

Best Practice: Align Your Accounting Periods (Video)

To create and export your journal entries out of the correct period, accounting periods should be 

  • Created in Zuora
  • Aligned to your GL accounting periods before transacting

LEARN MORE

Watch Video | View Presentation

Aligning Accounting Periods

Year End Close- Accounting Code Restatement

Are you going into your audits and needing to restate your accounting codes in Zuora to match up with what you have in your GL? If so during audit, you’ll be asked to restate accounting codes to align to your GL Chart of accounts.

If you’ve already closed your accounting periods, Zuora support can help. Simply ask “I have to restate the entire year of accounting codes - How do we update since we’ve closed our books?” 

Overview: Year-End Close (Video)

The goal for closing your books at the end of the year is so that all transactions for the affected term are updated to reflect the desired accounting codes. This can be accomplished with the following steps:

  1. Create a chart of accounts
  2. Associate product catalog rate plan charges with new accounting codes
  3. Cancel all posted journal runs for the affected term
  4. Re-open accounting periods for the affected term
  5. Use Finance Mass Updater tool to update accounting codes and transactions
  6. Close the accounting periods one at a time

LEARN MORE (VIDEO)

Overview of Year-End Close

Step 1 - Create New Chart of Accounts in Zuora

Create New Chart of Accounts in Zuora
  1. Go to Finance Settings: Manage Chart of Accounts
  2. Click on New Accounting code button, Add the Name of the accounting code and Type. The Name will show up on the Journal Run and Entries. 
  3. You can add the GL Account Name and Number, but they will not show up on the Journal entries.

Step 2 - Associate Product Catalog Rate Plan Charges with New Accounting Codes

Associate Product Catalog Rate Plan Charges with New Accounting Codes
  • In your Product Catalog, associate the relevant rate plan charges for deferred and recognized revenue, with the new accounting codes created in Step 1.
  • No amendment is needed for new and existing subscriptions for this update.

Step 3 - Cancel All Posted Journal Runs for Affected Term

Cancel All Posted Journal Runs for Affected Term

Click into Journal Runs, locate your specific Journal runs with the accounting period you are going to update and cancel the journal run.

  • Note: Once the Journal run is cancelled in Zuora, be sure to make the same changes in your GL.

Step 4 - Re-open Accounting Periods for Affected Term

Re-open Accounting Periods for Affected Term

  • Click into Accounting periods, locate the accounting period you are going to reopen, starting from the newest period > Click into the period > Click on the more button > Click on Re-Open this Accounting Period.
  • Once the period is open, click into the next period to re-open until you are done reopening all periods you are updating.


Step 5 - Use Finance Mass Updater Tool to Update Accounting Codes and Transactions

Use Finance Mass Updater Tool to Update Accounting Codes and Transactions
  • Under the Finance section, select Mass Updater > Under the Mass Action to perform dropdown menu, select: Update Accounting Codes
  • Once Accounting Codes is selected, click on the Download Update Accounting Codes Template (Blue Link)

Mass Updater Template

Mass Updater Template

What it does

  • Update Accounting Codes: Deferred and/or Recognized Revenue Codes


Instructions

  1. After opening the template, locate the invoice item, which is highlighted in Green, delete the remaining rows below
  2. You will need the Invoice Item: Object Key, Currency, Amount, which you can get in the Accounting period, which the invoice was posted (ex. Invoice Date= Accounting Period Date) and type in the new Deferred Revenue Code and Recognized Revenue Code Names 

Limit of 2,000 items to update at a time - more than this can cause timeouts, limits, failures and more

Using AR Forward Detail Report for Mass Updater Details

Step 1 

  • Click into Accounting Period
  • Select Accounting period, Click on Balances Tab, Click on Download Detail Report
Using AR Forward Detail Report for Mass Updater Details



Step 2

  • Once the Report opens, highlight the invoice items you want to update.

(Transaction # = Invoice #)

  • Copy over the following items into the Mass Updater Template for Invoice Item: Transaction ID into the Object Key, Currency, and Amount, save as CSV file.

Using AR Forward Detail Report for Mass Updater Details - 2

Example Account Billing Preview

Example Account Billing Preview

Mass Updater Upload

  • Step 1: Choose your saved CSV mass updater template and click on upload
  • Step 2 & 3: The status bar will come up, click on the Refresh button until this is completed
  • Step 4: The response file will give you a CSV results page with failures and reasons and successful updates.

Step 6 - Close the Accounting Periods One At a Time

Close the Accounting Periods One At a Time

Instructions

  1. Run your trial balance to verify the accounting code updates.
  2. Close your accounting periods.
  3. Create Journal runs

Verify Accounting Code Update and Close Accounting Period

Verify Accounting Code Update and Close Accounting Period



Verify Accounting Code Update and Close Accounting Period

  • Step 1: After the mass update has completed, click into the oldest accounting period, run the trial balance, click on the summary tab, click on the download detail report and verify the invoice items you made the updates to. 
  • Step 2 : If it looks correct, you can close the accounting period and each period after, then create the journal run.
    NOTE: Do NOT run all accounting period trial balances at once, you will lock your periods and will need to submit a Support ticket to have Engineering fix this.
  • Step 3: Export Journal Entries from Zuora and Import into your ERP.

How to Create a Journal Run

How to Create a Journal Run

Steps

  1. Under Finance Settings, Click on Journal Run, Click on New Journal Run
  2. Leave all boxes checked, Select the accounting period, enter the last date for the accounting period and click on create journal run.
  3. Export Journal Entries from Zuora and Import into your ERP.

Finance Best Practice Checklists in the Zuora Community Resource Library

The Zuora Community Resource Library is a ongoing list of resources exclusively found in the community such as our Best Practice Checklists created to strengthen your Zuora foundation with best practices from the Community, Knowledge Center, and Self Service Solutions so that you can confidently use Zuora.

New content will be added monthly and all you need to do is join the group to stay informed of the latest library additions! Learn more about the Community resource library here.

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