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Re: How to Give a Credit to a Future Dated Invoice

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Zuora Alumni

How to Give a Credit to a Future Dated Invoice

QUESTION OR PROBLEM STATMENT

How do I give credit to a future dated invoice?

1 ACCEPTED SOLUTION

Accepted Solutions
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Zuora Alumni

Re: How to Give a Credit to a Future Dated Invoice

SOLUTION

Many times a business needs to be able to give a credit to one of their customers on a future dated invoice. This is commonly referred to giving a customer a “credit memo” in many accounting systems. However, at this time, Zuora does not have what is considered to be a standard credit memo that applies to the next invoice generated. Zuora does have a feature called the “credit balance”, and at this time it can be used to process a credit for a customer to be applied to a future dated invoice. The steps on how to process this type of credit are listed below:

 

  • First, create a product in your company’s product catalog called “Credit Balance, Service Credit, or another applicable term.” This product should have a one-time charge associated with it as a flat-fee and no dollar value entered in at the time of creation.
  • Once the product is created, an amendment can be process against the customer’s subscription as a “New Product” amendment.
  • Select the product that was just created referred to a s “Credit Balance”. After selecting the product, drill down into the one-time charge and enter the amount of the credit to be given to the customer. A NEGATIVE SIGN MUST BE PLACED IN FRONT OF THE AMOUNT FOR A CREDIT TO BE GENERATED.
  • Save the amendment with a contract effective date of the date you are processing the amendment.
  • Process a bill run for the customer with the target date being the date the amendment was made effective. For example, if the contract effective date on the amendment was 4/15/16, the target date of the invoice should be 4/15/16.
  • An invoice should generate reflecting the credit amount. Post the invoice.
  • Once the invoice is posted, open the invoice in Zuora and then click on the More---Transfer to Credit Balance. Click “Yes” when prompted under the are you sure question.
  • In the Key Metrics section of the customer account page, you should now see an amount under the credit balance field. The invoice that was negative, should now have a $0 balance as the amount was posted to the credit balance.

 

There are now two ways the credit balance can be applied to a future dated invoice.

 

  • If your customer is set-up with auto-pay, click the processing rules in your payment run “To apply credit balance before payment” is turned on. This is the ideal way to take advantage of the feature.
  • If the customer is not set to auto-pay, you will need to open the new invoice once created. Once open, click on More---Apply Credit Balance. You can then manually apply the credit balance to the invoice.

 

This is the recommended approach on how process a credit on a future dated invoice at this time. It is not recommended that you process an overpayment on the account that will automatically post money in the credit balance as well. This will overstate your payments for the month, and that could cause issues when trying to reconcile your payments to your bank account.

 

For any further questions on this topic, please comment below.

 

View solution in original post

1 REPLY 1
Highlighted
Zuora Alumni

Re: How to Give a Credit to a Future Dated Invoice

SOLUTION

Many times a business needs to be able to give a credit to one of their customers on a future dated invoice. This is commonly referred to giving a customer a “credit memo” in many accounting systems. However, at this time, Zuora does not have what is considered to be a standard credit memo that applies to the next invoice generated. Zuora does have a feature called the “credit balance”, and at this time it can be used to process a credit for a customer to be applied to a future dated invoice. The steps on how to process this type of credit are listed below:

 

  • First, create a product in your company’s product catalog called “Credit Balance, Service Credit, or another applicable term.” This product should have a one-time charge associated with it as a flat-fee and no dollar value entered in at the time of creation.
  • Once the product is created, an amendment can be process against the customer’s subscription as a “New Product” amendment.
  • Select the product that was just created referred to a s “Credit Balance”. After selecting the product, drill down into the one-time charge and enter the amount of the credit to be given to the customer. A NEGATIVE SIGN MUST BE PLACED IN FRONT OF THE AMOUNT FOR A CREDIT TO BE GENERATED.
  • Save the amendment with a contract effective date of the date you are processing the amendment.
  • Process a bill run for the customer with the target date being the date the amendment was made effective. For example, if the contract effective date on the amendment was 4/15/16, the target date of the invoice should be 4/15/16.
  • An invoice should generate reflecting the credit amount. Post the invoice.
  • Once the invoice is posted, open the invoice in Zuora and then click on the More---Transfer to Credit Balance. Click “Yes” when prompted under the are you sure question.
  • In the Key Metrics section of the customer account page, you should now see an amount under the credit balance field. The invoice that was negative, should now have a $0 balance as the amount was posted to the credit balance.

 

There are now two ways the credit balance can be applied to a future dated invoice.

 

  • If your customer is set-up with auto-pay, click the processing rules in your payment run “To apply credit balance before payment” is turned on. This is the ideal way to take advantage of the feature.
  • If the customer is not set to auto-pay, you will need to open the new invoice once created. Once open, click on More---Apply Credit Balance. You can then manually apply the credit balance to the invoice.

 

This is the recommended approach on how process a credit on a future dated invoice at this time. It is not recommended that you process an overpayment on the account that will automatically post money in the credit balance as well. This will overstate your payments for the month, and that could cause issues when trying to reconcile your payments to your bank account.

 

For any further questions on this topic, please comment below.

 

View solution in original post